The Next Generation - Orion Partners - Transforming HR · The Next Generation / orion-partners.com...

The Next Generation How to transform your HR Servicesteam into a strategic force

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The end of the beginning? 2Instilling a new mindset 3Looking inside and out 5Balancing the right course of action 7Hints and tips 11

Contents

You’ve successfully set up your Shared ServicesCentre or outsourced operation. The rightpeople are in the right seats. The systems areworking. The first big round of cost saving isdone. What next? What should the ‘roundtwo’ priorities for HR Services be? And how do you go about achieving them?

Good questions. The natural temptation ofcourse is to spend the crucial post-launch yearsfocussing on further cost reduction. But here atOrion we think there’s a bigger prize to aim for.

With their hundreds of touch points in abusiness, their unparalleled understanding ofcore processes, and with the objective businessoverview that being in HR gives them, we thinkan HR Services team has a huge opportunity tobecome an active driver of both people andbusiness strategies.

The potential reward is huge, too. Your functionwill become an insight creator not a cost; anintegral part of the business not a processing‘factory’, and a function whose efforts don’tresult in the cost saving of a few thousand, butin the creation of value many, many times thatamount. This is a big deal.

An opportunity around the corner?

We think so. After all, now you’re set up there’sno reason why your HR Services operation can’tbe fully optimised straight away. To help, thisguide takes you through three of the coreelements you need to get right if you’re to takeyour HR Services team to the next level:

The end of the beginning?


Instilling a new mindset in your people

Looking inside and out when setting your priorities

Balancing the right course of action to make your strategic impact last

To be a valued partner in driving the businessforward, your HR Services team – be theyinternal staff or external partners – need toshow the business how valuable they are. That starts with the individuals believing in their broader business value and the potential of their future contribution.

This open, engaged mindset is so essential.There’s no room for the unsung hero routine ina successful shared service centre (SSC). As anHR Services leader there are many ways you canhelp your team develop this mindset, believe intheir own value and see their role in the broaderbusiness context. Here are a few that haveworked for our clients in the past:

Instilling a new mindset


Borrow skills from other business functions

Look to the marketing world and train the teamin product development and product launches.Look to the world of finance and train people infinancial management. Now you have so muchcompany and employee information accessiblein one place, make sure your team understandscustomer data mining and how to draw insightsfrom data. Even train people in scenarioforecasting to support HR and businesscolleagues take control of the future. Skills likethese will keep your team closer to the businessthey support, enable the process of findinginnovative, new ways to enhance the quality ofservice you offer them quicker and more likelyto produce results.

Foster a value-creation mindset in the team

Constantly encourage people at every level tolook for improvements in service, cost andquality. Make people realise the uniquecustomer insight they have from their touchpoints in the business, and push them to usethis insight to suggest new services. This willallow you to link your service and developmentroadmap more directly to your business’requirements (often to requirements thebusiness didn’t even know it had).


Generate relevant business and HR awareness in your staff

In tandem with the business skills mentionedabove, a wider understanding of the businessenvironment and HR function will increase yourteam’s ability to offer a relevant service (it willalso drive up satisfaction scores withoutchanging a single process). So help your teamwith this understanding and show them how touse it to develop empathy with business linemanagers. Also make sure the team feels part ofthe wider HR organisation, and establish careerpaths that link HR Services professionals to therest of HR and the business.

This is just a start, but actions such as these willgo a long way to improving the team’s belief intheir own capabilities. You’ll boost employeemorale and broaden the scope of people’sambition. If parts of your service are outsourcedor offshore you’ll bring them closer and increasethe strategic value of your relationship. Yourteam will naturally start to play a morestrategic, proactive role in decision-making. Andin doing so they will improve belief in thefunction throughout the business.

Looking inside and out


To have an impact on your wider organisation’sperformance you need to look both ways.Internally you need to run an ever moredisciplined, cost-efficient function.

Simultaneously you must look out to the rest ofyour organisation to see how HR Services canmeet their wider business needs and becomemore business and line-manager centric.

We’ve identified four key priorities that will help you look in both these directions at the same time:

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Addressing these four priorities

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Reduce costs

Benchmarking current costs can be a startingpoint from which to explore new ways to deliversavings, and find the right, specific target for the organisation.

Look for opportunities to maximise economiesof scale, too. Identify who else in your group ofbusinesses could benefit from the service youoffer and how to further exploit the technologyyou already have in place.

Improve service delivery

Are your service portfolios, governanceframeworks and reporting outputs still providingwhat the business units need? Is your operatingmodel aligned with your organisation’s financialand business requirements? Is there scope formore complex or ‘high touch’ services?Answering these questions will keep yourservice fresh and relevant.

Improve operational effectiveness

This could include re-examining the contactmodel for your HR Services to check yourexisting mix of call, click and face-to-facecontact channels are still right.

By reviewing the services provided by thedifferent tiers within the operation you mightalso find opportunities to reduce handoffs,improve process consistency or increaseautomation. And there is always scope forprocess improvement; get the team using toolslike Lean to drive these improvements out.

Improve business performance

Make an impact on people-strategy executionby actively tracking how your business andpeople strategies are being delivered and whichaspects of your service are making the mostimpact on performance.

You could then use this insight to launch newservices in areas that play to strategic priorities,or focus additional resources in regions targetedfor growth.


Balancing the right course of action

We’ve pinpointed eight specific areas of focusfor an HR Services leader’s to base their actionplan on. Reviewing how you are using each ofthem regularly will help you create maximumstrategic impact through your HR Services on anongoing basis:


Customer and people strategy alignment

Looking at your service through the lens of yourcustomer’s business strategy will provide vitalinsights into how you can deliver more value tothem. You can also use service data to developnew services that directly support the business strategy.

What the business needs from your servicegovernance arrangements will have also movedon since launch, and customers may need to bere-engaged in what you’re doing. Do thisthrough new measures that ‘talk’ to theirbusiness strategy, and through governance rolesand forums focused on the issues that matter tothem. Also double-check that your servicedirectly addresses business and people-strategypriorities. If it doesn’t, change the measures andservice items to align, and see what it does forthe team’s profile in strategic planning.

Frequent checks will also give you the chance totake the opportunities that come fromcustomers getting used to working with HRServices. These could include introducing newtechnology (like interactive web or mobileportals for transactions), off-shoring to locationswhere you couldn’t justify the cost of setting upon your own or outsourcing new processeswhere vendors have built innovative offerings –all of which will drive service levels up and costs down.

HR operating-model integration

There’s always a danger that your HR Servicesteam can become isolated from the rest of yourHR team. So reconnect Business Partners andothers with the team – it will help both sidesrediscover the added impact they can have byworking together. Revisit the hand-off points,looking for overlaps that have grown up overtime, and get each part of the HR operatingmodel to re-evaluate what it does best. Theresult might be HR Services taking on tasks thatleverage economies of skill rather than scale.For example, employee relations casework is anobvious area where the benefit of having yourexperts in one place can be significant in theright environment.

Sourcing and offshoring strategy

What the business wants or is prepared toaccept will naturally change over time. As youbuild up your HR Services capability, and asoutsourcing providers develop ever moreinnovative offerings, offshore facilities becomea real option for multi-national businesses. So it’s a good idea to keep revisiting the scope,location and technology offered by outsourcing providers.


HRIS and CRM technology

Here one of the keys is to listen to yourprocessing teams. They, more than anyone, willbe able to pinpoint exactly where yourtechnology and processes could be improved.

The world of operations management is onearea that’s constantly moving on. Specialistapplications can now deliver highly automatedworkflow and real-time work management, forexample. And the latest data-mining and BIapplications are available via software as aservice (as well as via traditional ERP packages),which means they can easily draw in non-HRdata to produce powerful insight about howyour people-management activities can driveorganisational performance.

A great way of doing this is to link career pathsback into the wider HR function and give HRServices staff the chance to work in other HRfunctions like business improvement. This willstimulate really exciting ideas for serviceenhancement. On the flip side, rotating seniorHR professionals into HR Services can offer themreal experience of running a ‘business’ with aninvestment budget, cost targets and demanding customers.

Of course, if you outsource then connectingcareer paths with your major suppliers will beharder. But it is just as important.

Standardisation and continuous improvement

Creating a continuous improvement cultureowned by every team member leads to everincreasing efficiency and excellence. Whiletransformational change can be costly and riskyto implement, an incremental approach willdeliver a constant stream of benefits, reducedcycle times and decreased error rates that keepthe cost base down and service levels up.Remember that, whatever the method used –six-sigma, lean, kaizen or some other – it mustbe embedded in everyone’s role and not be thepreserve of the few.

Staff and management capability

Once your new HR services model is wellestablished, development programmes and therecruitment process have to shift their focus.Their aim needs to be to build a team with theskills to develop real customer insight andcontinuous improvement, and who can excel atservice and account management andoperations planning.


Operations management excellence

Sound practices here can make a bigcontribution to improving cost and servicequality. Work management and service planningcapabilities need to be highly developed as yourHR service operation matures. As the businessand HR gets used to the disciplines of workingwith this type of model, they can begin toforecast the demand for services moreaccurately. This enables sophisticated workforceand work stack management to be introduced,team leaders and managers can take control ofmeeting service levels in real time and controlcosts more effectively by getting manning levels spot on.

Leverage non-HR services

If you’ve set up shared services across multiplefunctions (like finance and procurement) theneconomies of scale, joint-investmentopportunities and improvements in operationalresilience can be big wins.

However, the integration of HR services intothese other functions comes with challenges. Inreality, sharing staff requires complicatedworkforce planning and ‘cross skilling’ thatneeds to be planned in advance. HR also has amuch wider customer population than otherinternal functions and this places differentdemands on contact centre staff: HR casemanagement in particular places demands onCRM that areas like finance do not, while usingcommon CRM applications may cause you tocompromise on HR service automation. HRprocesses like sick-absence monitoring also tendto have an organisation’s culture baked in tothem. In these instances, the most importantthing is to make sure HR’s human touch isn’t lost.


Hints and tips

Pitfalls? As with any process, there are a few.But here are five lessons we’ve learnt over theyears to help you avoid the worst of them:

Use benchmarking judiciously and as astarting point.

While benchmarking has real value inhighlighting opportunities, every business has adifferent operating context, and every changejourney will be different from ‘best practice’.Use benchmarking wisely to point the way, butnot to define the end game.

Get the most from current technologybefore moving on.

Our research shows that most organisations useless than 25% of the purchased functionality inERP and ‘best of breed’ systems. The disciplineof shared services provides an idealenvironment to identify and exploit the underused functionality – it often avoids the need for future investment all together.

Keep revisiting the rationale for existence.

HR Services must keep asking itself whether theservice still makes sense in cost and value termsfor customers – like in any service business thecustomer moves on and the service needs toevolve with it.

Revisit the ‘sacred cows’.

Areas and approaches that were ruled out in theoriginal launch should be re-examined (areaslike off-shoring, outsourcing and business unitsthat opted out first time). Why? Becauseimproved customer trust, operational capabilityand a financial business case may now meanthese are the right things to do.

Encourage the management team to lookoutwards as well as inwards.

As HR Services grow it’s easy for themanagement team to become absorbed withwhat’s going on inside it. They need to remain intouch with their customers and the rest of HR ifthe service is to be well understood and aligned.

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