SHRM Poll: Shared Services Centers Deliver Efficiency & Cost Savings

SHRM Poll: Shared Services and Centers of
Excellence

July 23, 2010

SHRM Poll: Shared Services and Centers of Excellence

Contents:

 Introduction

 Shared Services Centers

 Centers of Excellence

 Results by Organizations That Do Not Use a Shared Services/Centers of Excellence
HR Transaction Model

 Methodology

Shared Services & Centers of Excellence | ©SHRM 2010 2

Introduction

This study examined the shared services centers (consolidated administrative HR
functions) and centers of excellence (localized areas of in-depth HR expertise)
models used for administering HR transactions and services. The shared services
model, as envisioned by Dave Ulrich, is a way to promote HR expertise and deliver
improved services companywide through the division of tasks and expertise.


Shared Services Centers


Does your company administer and deliver HR transactions through an
internal and central shared services department?

No, 25%

Yes, 75%

Note: n = 484.


Does your company administer and deliver HR transactions through an
internal and central shared services department? (Differences by
organization demographics)

• Publicly owned for-profit organizations (74%) were more likely than nonprofit
organizations (53%) to administer and deliver HR transactions through an internal and
central shared services department.
• Large-staff-sized organizations (500 or more employees) (78%) were more likely than
small-staff-sized organizations (1 to 99 employees) (62%) or medium-staff-sized
organizations (100 to 499 employees) (63%) to administer and deliver HR transactions
through an internal and central shared services department.
• Organizations with multinational operations (75%) were more likely than organizations
with single country operations (64%) to administer and deliver HR transactions through
an internal and central shared services department.


What business model does your company use to administer and deliver
HR transactions?

Completely in-house shared services
Completely outsourced shared services
A combination of in-house and outsourced shared services

37%

61%

2%

Note: n = 352. Only respondents who indicated that they administer and deliver HR transactions through an internal and external shared services
department were asked this question.


What business model does your company use to administer and deliver
HR transactions? (Differences by organization demographics)

• Government agencies (58%) were more likely than publicly owned for-profit
organizations (24%) or nonprofit organizations (21%) to use completely in-house
shared services.
• Publicly owned for-profit organizations (72%), privately owned for-profit organizations
(68%) and nonprofit organizations (79%) were more likely than government agencies to
use a combination of in-house and outsourced shared services.


To what degree has your company's shared services organization…

To a large degree To some degree To a slight degree Not at all

3%
lost endorsements and support from the business 18% 27% 52%
unit(s) and local leaders it serves? (n = 267)
4%
decreased employee satisfaction with HR service 18% 36% 43%
delivery? (n = 267)

gained endorsements and support from the business 32% 48% 11% 9%
unit(s) and local leaders it serves? (n = 276)

increased employee satisfaction with HR service 26% 50% 17% 7%
delivery? (n = 277)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Note: Percentages may not total 100% due to rounding.


To what degree has your company's shared services organization…
(Differences by organization demographics)

• Increased employee satisfaction with HR service delivery
> Privately owned for-profit organizations reported greater average degrees of
increased employee satisfaction with HR service delivery than publicly owned for-
profit organizations.
> Organizations with single country operations reported greater average degrees of
increased employee satisfaction with HR service delivery than organizations with
multinational operations.

• Decreased employee satisfaction with HR service delivery
> Publicly owned for-profit organizations reported greater average degrees of
decreased employee satisfaction with HR service delivery than privately owned
for-profit organizations or government agencies.
> Large-staff-sized organizations reported greater average degrees of decreased
employee satisfaction with HR service delivery than small-staff-sized
organizations.


What are the top three positive outcomes your company has
experienced as a result of its shared services center?

Reduced HR staff time spent on administrative tasks 37%

Reduced administrative costs 36%
Consolidated redundant HR functions 33%

Better tracking of employee data 31%
Improved efficiency of operations 25%

Greater strategic functioning of HR 19%

Reduced/eliminated paper-based record keeping 18%
Reduced routine HR-related calls/emails from employees 14%

Reduced transaction errors 14%

Improved employee satisfaction with basic HR transactions 11%
Maintained (i.e., did not see an increase in) administrative costs 9%

Improved ability to calculate metrics around HR functions 3%
Other 1%

0% 10% 20% 30% 40%

Note: n = 247. Percentages do not total 100% as multiple response options were allowed.


experienced as a result of its shared services center? (Differences by

• Improved employee satisfaction with basic HR transactions
> Privately owned for-profit organizations (19%) were more likely than publicly owned
for-profit organizations (6%) to report improved employee satisfaction with basic HR
transactions.

• Reduced transaction errors
> Medium-staff-sized organizations (22%) were more likely than small-staff-sized
organizations (5%) to report reduced transaction errors.

• Reduced HR staff time spent on administrative tasks
> Large-staff-sized organizations (48%) were more likely than medium-staff-sized
organizations (28%) to report reduced HR staff time spent on administrative tasks.

• Reduced administrative costs
> Organizations with multinational operations (44%) were more likely than
organizations with single country operations (27%) to report reduced administrative
costs.
> Organizations with unionized workforces (49%) were more likely than organizations
with non-unionized workforces (30%) to report reduced administrative costs.

experienced as a result of its shared services center? (Differences by
organization demographics, continued)

• Consolidated redundant HR functions
organizations with single country operations (27%) to report consolidated
redundant HR functions.
> Organizations with unionized workforces (45%) were more likely than
organizations with non-unionized (30%) workforces to report consolidated
redundant HR functions.

• Greater strategic functioning of HR
> Organizations with single country operations(26%) were more likely than
organizations with multinational operations (13%) to report greater strategic
functioning of HR.

• Reduced/eliminated paper-based record keeping
> Organizations with single country operations (24%) were more likely than
organizations with multinational operations (13%) to report reduced/eliminated
paper-based record keeping.


What are the top three challenges your company has experienced with
its shared services model?

Employee resistance toward the shared services model 43%
Transitioning from traditional HR delivery to the shared services
model 40%

Shifting HR staff roles and responsibilities 37%
Difficulty with the IT infrastructure to support automated, web- 30%
based HR functions
Performance metrics for this model have not been effectively 27%
tracked
Time to implement the shared services model was lengthier than
expected 24%

Expected HR staff time savings not achieved 23%

Difficulty with outsourced portions of HR services 22%
Negative impact on relationship between HR staff and other
company employees 18%

Expected cost reductions not achieved 10%

Other 4%

0% 10% 20% 30% 40% 50%

Note: n = 235. Percentages do not total 100% as multiple response options were allowed.“Not sure” and “none” responses were excluded from this
analysis.


its shared services model? (Differences by organization demographics)

• Negative impact to the relationship between HR staff and other company
employees
organizations with single country operations (11%) to report negative impact to the
relationship between HR staff and other company employees.
> Organizations in the midwest (27%) were more likely than organizations in the
northeast (3%) to report negative impact to the relationship between HR staff and
other company employees.

• Performance metrics for this model have not been effectively tracked
organizations with multinational operations (19%) to report that performance
metrics for this model have not been effectively tracked.


its shared services model? (Differences by organization demographics,
continued)

• Employee resistance toward the shared service model
organizations with non-unionized workforces (38%) to report employee resistance
toward the shared service model.

• Transitioning from traditional HR delivery to the shared service model
> Large-staff-sized organizations (48%) were more likely than medium-staff-sized
organizations (27%) to report transitioning from traditional HR delivery to the
shared service model.


Is the shared services center just for your location or the entire
company?

Just this location

Multiple locations but not the entire company

Entire company

3%

16%

80%

Note: n = 219. HR professionals who were employed by a single location/business unit company did not answer this question.


How many separate locations are served by shared services?

80% 71%

70%

60%

50%

40%

30%
15%
13%
20%

10% 1%

0%
One location Two to five locations Six to 10 locations 11 or more locations

Note: n = 207. HR professionals who were employed by a single location/business unit company and responded that their organization’s shared
service center was just for their location did not answer this question.


How many separate business units are served by shared services?

46%
50%

40%

30%
23%
22%

20%

8%
10%

0%
One business unit Two to five Six to 10 business 11 or more
business units units business units

Note: n = 215. HR professionals who were employed by a single location/business unit company and responded that their organization’s shared
service center was just for their location did not answer this question.


Which services are offered through an HR shared services department?

Health care benefits administration 88%
Flexible spending account administration 68%
Retirement benefits administration 66%
Payroll 65%
Leave administration 60%
Employee data collection and maintenance 48%
Employee assistance/counseling 47%
Recruiting support 43%
Time keeping 39%
Pension administration 39%
Work/life benefits administration 38%
Performance management 37%
Training and development 36%
Onboarding support 33%
Compensation planning 32%
Other benefits (i.e., not health care, retirement, leave or work/life)… 28%
Relocation services 27%
Information services 26%
Expense reimbursement 24%
Stock/share administration 18%
Expatriate administration 12%
Other 3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%




• Relocation services
> Publicly owned for-profit organizations (40%) were more likely than government
agencies (12%) to report offering relocation services through an HR shared
services department.
organizations with single country operations (16%) to report offering relocation
services through an HR shared services department

• Stock/share administration
> Publicly owned for-profit organizations (30%) were more likely than nonprofit
organizations (7%) to report offering stock/share administration through an HR
shared services department.
organizations with single country operations (14%) to report offering stock/share
administration through an HR shared services department



• Pension administration
organizations with non-unionized workforces (32%) to report offering pension
administration through an HR shared services department.
> Medium- and large-staff-sized organizations were more likely than small-staff-sized
organizations to report offering pension administration through an HR shared
services department.

• Other benefits administration
> Large-staff-sized organizations were more likely than medium-staff-sized
organizations to report offering other benefits (i.e., not health care, retirement,
leave or work/life) administration through an HR shared services department.

• Payroll
organizations with single country operations (58%) to report offering payroll
through an HR shared services department.



• Retirement benefits administration
> Organizations in the southeast (80%) were more likely than organizations in the
northeast (52%) to report offering retirement benefits administration through an HR
shared services department.

• Flexible spending account administration
> Publicly owned for-profit organizations (75%) were more likely than government
agencies (44%) to report offering flexible spending account administration through
an HR shared services department.


Centers of Excellence


Do you have centers of excellence that offer HR services/functions?

Yes, 49%

No, 51%

Note: n = 222.


Which services do the centers of excellence provide?

Training and education program planning and administration,
mentoring, coaching 75%
Recruiting, recruiting and staffing administration or recruiting and
hiring policies 73%

Employee relations 63%

Performance management 58%

HR policy development 57%

Total rewards planning 53%

Organizational design and change processes 51%

Diversity programs 50%

Legal 46%

Succession planning 45%

Other 5%

0% 10% 20% 30% 40% 50% 60% 70% 80%



Which services do the centers of excellence provide? (Differences by

• Employee relations
organizations with multinational operations (50%) to report providing employee
relations through centers of excellence.
> Organizations with non-unionized workforces (74%) were more likely than
organizations with unionized workforces (40%) to report providing employee
relations through centers of excellence.

• HR policy development
> Privately owned for-profit organizations (74%) were more likely than publicly
owned for-profit organizations (44%) to report providing HR policy development
through centers of excellence.

• Other services
organizations with non-unionized workforces (1%) to report providing other
services through centers of excellence.


Over time, to what degree have the services of your central centers of
excellence…

To a large degree To some degree To a slight degree Not at all

1%

decreased employee satisfaction with HR service delivery? (n = 95) 14% 36% 49%

increased employee satisfaction with HR service delivery? (n = 99) 23% 48% 15% 13%

1%
lost endorsements and support from the business unit and local 15% 34% 50%
leaders it serves? (n = 94)

gained endorsements and support from the business unit and local 42% 35% 13% 10%
leaders it serves? (n = 100)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Note: Percentages may not total 100% due to rounding.


Over time, to what degree have the services of your central centers of
excellence… (Differences by organization demographics)

• Increased employee satisfaction with HR service delivery
> Privately owned for-profit organizations reported greater average degrees of
increased employee satisfaction with HR service delivery than publicly owned for-
profit organizations.


Does your company have decentralized HR generalists in separate
business units and/or individual locations?

No, 42%

Yes, 58%

Note: n = 232.


Does your company have decentralized HR generalists in separate
business units and/or individual locations? (Differences by organization
demographics)

• Publicly owned for-profit organizations (71%) were more likely than government
agencies (35%) to report having decentralized HR generalists in separate business
units and/or individual locations.
• Organizations with multinational operations (72%) were more likely than organizations
with single country operations (44%) to report having decentralized HR generalists in
separate business units and/or individual locations.


Organizations That Do Not Use a Shared
Services/Centers of Excellence HR
Transaction Model


What is the primary reason for your company not adopting a shared
services business model?

No perceived need for this HR service delivery model for our
organization 46%

Concerns about lowered employee satisfaction with HR service 12%
delivery

Concerns about cost escalation 10%

Lack of upper management support for this HR service delivery 10%
model

Model development/implementation in progress 9%

Concerns about loss of support from the business units regarding
HR service delivery 3%

Current outsourcing arrangement of HR functions works well 1%

Other 10%

0% 10% 20% 30% 40% 50% 60%

Note: n = 102.


Does your company plan to change to a shared services/centers of
excellence HR transactions model?

50%
42%
37%
40%

30%

20%

10%
7%
10% 5%

0%
Yes, within Yes, within Yes, within No Not sure
12 months 13 to 24 the next 2 to
months 5 years

Note: n = 104. Only respondents who indicated that their organizations did not administer and deliver HR transactions through an internal and
external shared services department were asked this question.


Does your company plan to change to a shared services/centers of
excellence HR transactions model? (Differences by organization
demographics)

• Among organizations that do not currently administer and deliver HR
transactions through shared services/centers of excellence:
> Nonprofit organizations (81%) were more likely than publicly owned for-profit
organizations (35%) to indicate that they do not plan to change to a shared
services model.
> Organizations with multinational organizations were more likely than organizations
with single country operations to indicate that they plan to change to a shared
services model within 13 to 24 months (23% compared with 5%) or within the next
2 to 5 years (18% compared with 3%).
organizations with multinational operations (36%) to indicate that they do not plan
to change to a shared services model.


Demographics: Organization Sector

40% 37%
33%

30%

20% 16%

11%

10%
3%

0%
Publiclyowned for- Privatelyowned for- Nonprofit Government Other
profit profit

Note: n= 330


Demographics: Location Staff Size

39% 39%

40%

30%
22%

20%

10%

0%
Small (1 to 99 employees) Medium (100 to 499 Large (500 or more
employees) employees)

Note: n = 316.


Demographics: Organization Operations

Multinational, 45%

Single country, 55%

Note: n = 324


Demographics: Union Status

Union, 27%

Non-union, 73%

Note: n = 328


Demographics: Region

37%
40%

28%
30%

19%
20% 16%

10%

0%
Northeast Southeast Midwest West

Note: n = 316


SHRM Poll: Shared Services & Centers of Excellence

Methodology
• Response rate = 18%
• Sample comprised 484 HR professionals from SHRM’s
membership who were employed by organizations with
250 or more employees.
• Margin of error is +/- 4%
• Survey fielded May 6 – May 12, 2010

For more poll findings, visit: www.shrm.org/surveys

Follow us on Twitter: http://twitter.com/SHRM_Research


SHRM Poll: Shared Services Centers Deliver Efficiency & Cost Savings

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (18)

Destacado

Destacado (14)

Similar a SHRM Poll: Shared Services Centers Deliver Efficiency & Cost Savings

Similar a SHRM Poll: Shared Services Centers Deliver Efficiency & Cost Savings (20)

Más de shrm

Más de shrm (20)

Último

Último (20)

SHRM Poll: Shared Services Centers Deliver Efficiency & Cost Savings