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A problem that often plagues shared services functions is the high rate of employee turnover. Comparative studies have found that retention rates are lower in many shared services groups when compared to other business units, even within the same organization. Why is that?

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Most generally agree that a natural function for shared services is the processing of repetitive, transaction-oriented work. This type of work, often considered a burden with little value within the business unit, generally lends itself to consolidation and standardization and thus can become scalable within shared services which usually lowers cost. Research shows us that the majority of early adopters of shared services initially built their operations around the requirements of such transaction processing types of work.

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Everyone in today’s business environment is well aware of the pressure on our bottom line. Business is looking into every nook and cranny to find ways to cut overhead, lower operating cost, and improve margins. As shared services professionals we owe it to our businesses and to ourselves to review our operations and look for opportunity to improve our financial performance. But where to look?

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I am often asked by clients and prospects what is the best way to deliver HR services across the Europe, Middle-East and Africa (EMEA) region when employing a shared service center model, either internally or externally. Is an off-shoring or an in-region delivery model better?

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In our previous articles on HR Shared Services (HRSS) we’ve discussed areas such as what functions to undertake when setting up a HRSS function, how certain functions fit within shared services, what to consider regarding staffing and how to measure the work performed. So let’s assume you have used these suggestions and you have a successful operation up and running. Your clients are relatively happy, the company is seeing value in the services provided, and your staff is in place, happy and performing well according to your metrics.

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The tides are shifting on the age-old question for Human Capital Management (HCM): Enterprise Resource Planning (ERP) Suite versus Best-of-Breed (BOB). The 1980′s movement toward a single vendor, single platform ERP system is altering its course toward modern, agile, single function, fully integrated systems. This change is being enabled with the growth of Web 2.0 — the method of software and service delivery via the Internet that is now penetrating all aspects of our work and personal lives.

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In this month’s Jeitocast Karen Beaman interviews Steve Parker on how HR Shared Services can help achieve greater efficiencies and effectiveness.  Steve talks about how it’s important to realize that not every high-volume, transaction-based activity is necessarily a good candidate to move into a shared services group.  The most effective use of the HR Shared Services balances three components together to determine what should be transitioned:

1. move non-strategic, non-business unit critical activities that will scale appropriately to Shared Services while making sure the business units can still operate effectively,
2. make sure expertise exists within your Shared Services staff to handle the activities in a cost-effective manner with improved quality,
3. re-engineer or streamline processes before moving them to Shared Services to take advantage of process improvement and standardization.

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When I speak with Human Resource Shared Services (HRSS) management teams about how they measure their success, I’m always amazed at the similarity in their answers. Almost everyone talks about how they measure the number of transactions processed, or the number of inquiries answered and resolved, or how many open issues remain at the end of the reporting period. Some even talk about trend metrics; how are they doing over time in these areas.

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