Shared services constitute the consolidation of similar business operations used by multiple departments within an organization through a centralized back office. This improves cost-efficiency and eliminates redundancy.
More and more companies now adopt shared services model for information technology, finance, human resources management and various other functions. The implementation of shared services within an organization allows each department to focus on its limited resources to support the department’s primary goals. Today the rapidly advancing technology has compelled most of the organizations to use shared services rather than spending scarce financial resources to buy expensive new equipment, maintain them and to train the employees on how to use them.
The idea of shared services originated in early twentieth century. For example, back in 1920s the typists were highly trained employees and were not abundantly available. Instead of each department hiring its own typists, the organizations established centralized typing pools whose services could be used by all the departments within the organization. This turned out to be convenient, cost-efficient and judicious use of scarce resources.
During the recent times Human Resources is one single function that undergoes a major change in order to meet the tough business requirements. This involves setting up a centralized HR shared services organization, which will offer consistent, client-focused and cost-effective services to the managers and the employees.
Here are some of the major trends in HR shared services based on the experience of best practice companies:
- HR Self Service for Employees: Several companies provide access to relevant personal data for employees and ex-employees in order to incorporate certain changes in their personal data. This self-service facility is very useful and convenient to the employees for correcting and updating their personal data in the company’s records. It also saves a lot of time and expense to the organization.
- Centralized Back Office: Nowadays most of the progressive companies have established some kind of back offices which focus on specific HR services. These offer HR related information and services to managers and employees through a single source. This enables the organizations in more efficient use of expertise and frees up the HR to use their time for focusing on their prime business and activities. It also reduces the time spent by the managers and employees by speeding up the resolution of HR related transactional issues.
- Integrated Services: Some of the highly effective HR service organizations maximize their full potential by integrating various services such as learning, talent management recruitment, payroll, HR data and analytics and many more functions, which can be shared organization-wide.
- Use of Advanced Technology: HR is now leveraging the latest cloud-based technologies for implementing the integrated HR solutions. Many of these solutions are compatible with smart-phones for easy access by managers and employees on the move. The increasing use of digital technologies is making the HR shared services paperless. This means digitizing personnel and other employee data files, which save the organizations the storage space, besides overcoming the geographical restrictions on HR operations.
- Big Data and Analytics: This is another important trend in HR shared services and enables the organizations to carry out fact-based people management. The access to standardized data through shared services enables the organizations to meaningfully sift through vast amounts of data. It enables them to take timely and informed decisions pertaining to employee matters and business operations.
Just like any other organizational function, HR is a part of an organization’s business. This is more evident in HR shared services. The maturity and expertise in this area is, therefore, growing very rapidly.