07: Designing an HR Shared Services Organization

The North American unit of a global services organization needed to better control costs and re-focus the HR employees across its many U.S. facilities. Through periods of rapid growth, and while trying to address high turnover and the integration of new clients and acquisitions, the HR function had created teams (mini departments) at each facility. While having HR resources close to field operations helped with the high volumes of transaction processing and overall responsiveness to employee issues, there was a cost. Specifically, the HR function became a relatively expensive unit. As a support function (rather than a revenue generating part of the business), this put significant pressure on the HR function and its leadership team.

An analysis of the HR roles and activities across all facilities provided a baseline data set (and confirmed that HR FTE accounted for disproportionate ratio of the HR budget). The design objectives were to lower HR’s cost to the business while also transforming the HR function from a reactionary transaction processing group to a more strategic team capable of acting as business partners to leaders of various service delivery teams. The final design was based on a shared service model where all transactional work was moved to a central processing center. A realignment of the collective HR staff resulted in a small team of HR business partners (dedicated by service line) and supporting business analysts. Following the shift in transaction processing, each facility needed only one or two lower-level HR roles to guide employees to the shared services team (and manage a few miscellaneous HR tasks). These changes allowed the HR team to identify more than $750,000 in annual savings. This model served as the integration mechanism for the consolidation of additional support functions.

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