Two major factors that describe HR are the services it provides and the strategic value it offers. The strategic value of HR Shared Services is best highlighted by the efficiency of services provided, while working within defined dynamics of the organization.
HR shared services offer organizations the competence to improve their operations while the HR administrative and core services are handled more efficiently. Many large companies struggle to implement HR shared services due to this very nature of working within boundaries while trying to achieve excellence.
Here are the 5 best practices that help global organizations achieve economies of scale while realizing standardization across the organization. The desired aim is to leverage technology investments to manage employee costs.
1. Reduce Costs: Adapting the HR shared services should reduce core process costs by 70–80%. Globally, this saving range lies between 20–80% for companies that use HR shared services.
2. Centralization: More than 80% of Fortune 500 companies that use HR shared services centralize all aspects of the HR services environment.
3. Augmented scope: 70% of top performing organizations plan to augment the scope of services to include all their divisions globally.
4. Reduced Employee Costs: As compared to similar organizations, companies using HR shared services to its optimum save up to 13% lower costs on spending per employee.
5. Clear Communications: HR shared services are not complex, but the uncommon character of the model sometimes makes it a big task to clearly define procedures and objectives. But the upside is huge in the form of savings in cost and in replicating processes. Strive for clear communications with the workforce.