Is HR #Shared #Services a good thing?

I am currently tutoring a master thesis on HR Shared Services based on a case story from the public sector. The implementation has had a lot of challenges, including communication problems between the SLA owners and the Shared Services Center, stressed out business partners and duplicate HR administration growing in the corners.

Why is it, that this story keeps on coming up? From a change management perspective, there is a clear pattern that can be recognised:

1) Top-down implementation of a predesigned concept: While the basic idea behind HR shared services – to make admin more efficient and to free up resources for strategic development – is a noble one, it is a dangerous strategy to copy-paste solutions from one scenario to another. Doing exposes the organization to a number of risks, and makes the employees passive audiences of the change, rather than engaged self-developers.

2) Middle- and lower management are the big losers in many shared services implementation. First, they lose their local administrative staff. Second, they are overloaded with additional tasks through the introduction management self service. Third, they are stuck in inflexible SLAs handled by remote telephone operators with little understanding of the business

3) The HR business partners are, in many cases, unable to embrace their new role as strategic development partners of the business. One reason is probably insufficiencies around self perception, understanding and competencies, as recently concluded in a Economist article on the subject. Another is that the persistent narrative around support functions is centred on exactly that – support and not development. A third may be that the administrative tasks provide a hidden value. As expressed in this interesting blog post, the administrative tasks are the ones that provide insight into the needs of the organization and builds trust to the business.

So is HR Shared Services a good thing? The key to successfully transform HR may be to add a dimension to the transactional / transformational dialectic. This dialectic is part of the problem, as it downgrades transactional to something that can ultimately be done by a robot – when in reality the transactional holds the key to gaining insight and trust. The new dimension is simply “relational” – ie. how can we build and sustain value creating trust and relationships locally and virtually? If approached with the relational mindset, much more emphasis would be put on developing people and relationships ahead of the restructuring phase, ensuring self confident, well-connected, proactive HR partners and better co-operation between local units and the shared functions. Lets bring back the “Human” and “Relational” in HR!

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