A Marketing Perspective on Shared Services: Why Users are the Creators of Value

In both academic and professional publications there are ongoing talks about the value of HR Shared Services. According to its proponents, the introduction of HR Shared Services likely improves service provision for its users – the employees and supervisors – through bundling expertise, merging databases for Big Data provision, developing a one-stop shop for HRM-related questions, increasing control for users, and so on. Therefore, it is often said that HR Shared Service Centers create value for their users and as a result, we tend to focus on the design, resources, and capabilities of the center when the quality of HRM services requires improvement.

Paradigms and theories from the field of marketing, however, suggest an alternative approach for creating high-value HRM Services – one that puts the user at center-stage.

A popular marketing approach is the Service Logic, developed and extended by scholars such as Robert Vargo, Stephen Lusch, and Christian Gr÷nroos. These scholars have argued that service providers are restricted to offering value propositions, such that provided services are not value-laden; that is, they offer no direct value for the users. Value is seen as being created at the moment of usage, when the user uses a product or service to meet his/her needs.

For example, Big Data as provided by the HR SSC is merely a value proposition. Only when the manager analyzes, interprets and draws conclusion on these data to make a decision on better personnel planning, for example, is value actually being created from Big Data. Thus, according to the Service Logic, value is created ‘in use’, which implies that it is the user of HR Shared Services who is the creator of value.

Applying these ideas to HRM Shared Services, and together with colleagues Tanya Bondarouk and Dave Lepak, we found that, among 2,000 users, those with high levels of HRM competences (ie, their knowledge of HRM procedures, processes, and labor regulations) reported higher levels of perceived quality of HRM Shared Services and experienced lower administrative workloads.

Also, those users who were better able to explain their HRM-related needs and who knew how to interact with HRM professionals were more satisfied with the HRM Shared Services provided. In other words, the human capital of those who use HR Shared Services constitutes an important source for improving HR SSC performance, while it positively influences user satisfaction with HRM Shared Services.

Does this imply that the HR SSCs themselves have to watch from the side-line, witnessing how users ‘determine’ their satisfaction with HRM Services? No. Why not? Given that the knowledge and skills of users positively influence their satisfaction with HR Services, HRM Service Providers can try to improve these knowledge and skills in order to make their users more satisfied.

We found that the number of HR services that users previously consumed was positively related to their human capital. In other words, by operating HRM portals, analyzing Big Data, or inquiring at an HRM Call Center, users become experienced in using HRM Shared Services and thus become more satisfied in future instances. To stimulate the learning curves of their users, HR SSCs could, for example, publish pay slips exclusively online in order to ‘attract’ users to their portal, thus increasing user experience as these utilize their products. Besides their role as the provider of HRM Services, therefore, I would advise HR SSCs to consider their role as a trainer/educator, aiming to increase the expertise of users through stimulating users to make use of their services.