HR Shared service centers

HR shared service centers help transform HR into a business-driven function focused on facilitating and supporting organizational change.

A growing number of organizations are looking at implementing shared services for HR. Shared service centers (SSC) provide HR services for various parts of the organization, including the provision of routine HR administration as well as additional HR services. They are service-focused, enabling their customers to specify the level and nature of the service.

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The introduction of HR shared service centre is usually a part of a wider transformation of HR structure within the organization. The type of shared services will vary from one organization to another. The shared service centre can include the full service from routine administration in recruitment, payroll and training, or provide specialist HR information and advice on HR policy and practice.

SSC

HR shared service centers can be implemented in-house or outsourced to the third party providers. In practice, hybrid models are becoming more common. Shared service centers are usually proposed for the organization’s strategic reasons in order to improve the capability and effectiveness of HR function. While HR shared services provide “quantifiable” benefits in terms of cost reduction (through achieving economies of scale, the standardization of process, better management structures, etc.), the strategic benefits achievable from HR transformation are significantly more important.

Strategic benefits of HR shared services include sharing more relevant and accurate information across the organization (sharing HR best practice, leveraging HR expertise, pooling knowledge across different parts of the organization and different geographical regions), achieving greater structural flexibility, improving organizational learning, and freeing up HR from day-to-day routine enquiries.

The main drivers of HR shared services are Cost, Quality, and Organizational Change. HR shared service centers have been implemented by a number of high-profile organizations, such as IBM, Shell, Lloyds TSB and Royal Bank of Scotland.

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