Disaster Recovery and HR Shared Services

With multiple hurricanes, typhoons, fires and other natural disasters, it is an excellent time to discuss disaster recovery (DR).  Events like what has happened over the last few weeks make shared service managers and organisations that do outsourcing assess their current recovery plans and determine what updates are required. 

When I was a leader of several organisations that focused on HR Outsourcing the discussion on disaster plans and recovery was one packed with emotion and at times an unrealistic desire to have fast, full recovery without really understanding the business needs or the subsequent cost or benefit.   HR is different than other business processes and therefore has its unique requirements when it comes to disaster recovery as compared to the supply chain or a customer facing call centre.  I am going to use HR for the examples, but the principles behind how to assess what is required for disaster recovery are similar.  And these principles are true whether you are leading a captive shared service centre (SSC) or have outsourced to a third party.

Principle 1 – Disaster Recovery Plans Cost Money

I know this sounds like the bloody obvious, but I have been in meetings where discussions around recovery take on such an emotional tone and all financial acumen go out the window.  HR leaders will argue that they need to have the HR Call Centre back up in < 4 hours, all HR systems with hot backup and immediately fall over to new servers and hosting centres and other aspirations that have no business benefit.  And if you are asking your outsourcing provider to meet these types of targets it will cost as they have to have the infrastructure, people and processes that would achieve these objectives. 

HR leaders need to assess what is business critical and what must be up back online within a very short period.  Those things that need to have fast recovery are ones that will impact customer service, financial performance or workplace safety.  I would argue that as much as I am passionate about HR and Talent, there is no much in HR that meets these criteria.  While it would be great to have the recruitment system back up in < 4 hours and to ensure that all timesheets are entered for the day irrespective of what happens it is not a crisis if these systems or processes were down for several days.  Yes, it creates work, but the cost of additional labour to catch up transactions versus the cost of maintaining a high functioning DR plan might be the right trade-off.  Most organisations don’t need that level of investment in HR for disaster recovery.

Principle 2 – How long could you live without HR Systems?

Modern HR runs on technology, and therefore a significant portion of any DR plan will be focused on getting the systems back up as soon as possible.  What do you need the recovery time to be for your core HRIS?  It will vary depending on whether you have cloud or on-premise systems.  With cloud the DR comes with the provider, and most likely they will have a massive plan with hosting rollovers and all the things a CIO wants to see in a good recovery plan.  If you are still running on-premise and then HR systems hosting DR plan most likely will be tied up with the rest of the companies plan and the CIO will be responsible.  If your hosting is outsourced to someone else, then you need to review what you need as a recovery time, so you are not paying for something that provides no business value.   For example, there is limited to no value to pay for a <4 hour recovery time for a payroll system.  Most people get paid weekly or monthly.  And all payroll managers know that if all else sometimes fails the safest DR plan for payroll is to pay everyone this pay what they were paid in the last pay run, and then sort out the pluses and minus later. (Note – make sure you have employment contracts that support this and does not allow employees to keep overpayments). 

Principle 3 – Consider the end to end process before you make your DR decisions.

Examine the end to end process when you look at what your business needs for HR recovery.  For example, it does not look good to have a disaster recovery plan for payroll that is < 8 hours if the banks aren’t working and there is no way to process the actual disbursement.  While a little extreme it is crucial to understand what the recovery speed is for the steps in the process you do not own.  There is no value in paying for a DR plan that is faster than the slowest recovery point in the end to end process. 

Disaster recovery is critical to HR and should be on the agenda for at least yearly review with the head of your SSC or outsourced provider.  At the same time your HR recovery plans need to provide the appropriate “bang for the buck” as no matter who is doing the recovery, it is not coming for free and therefore needs to be valued by the organisation, employees and shareholder. Taking HR applications to the cloud and utilising outsourcing providers can help create the right DR environment.  

And hopefully, all the excellent planning, testing and preparing for a disaster never needs to be used.