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1、,Shared Services for HR,Peter Horan,Mercer Human Resource Consulting 2006,HR Shared Services Why the interest?,Shared services in the US has been shown to save 28%of HR labour costs.As well as better quality,consistency and employee satisfaction.Does it work outside the US?In a large country or regi
2、on?In Latin America,in Europe,in Asia,in China?,Mercer Human Resource Consulting 2006,The Success of Shared ServicesIt works.but,Q1.Has it been a success?Yes.A huge success.when well planned and executed.Q2.Does it work for all organizations?Yes,but the impact,challenge and ROI varies between organi
3、zationsQ3.Does it work in every country or region?Yes,but the impact,challenge and ROI varies between geographies Q4.Does it actually result in better support to the local businesses?Yes,provided that HR skills and competencies are appropriate.,One size does not fit everyone!,Mercer Human Resource C
4、onsulting 2006,HR Shared ServicesCriteria for a good business case,The financial benefits depend on:Labour CostsJust like outsourcing.Locate the SSC in lower cost location.LocationsMore sites or divisions.More duplication or variation.More opportunity to improve.PopulationLarge workforce means econo
5、mies of scale from consolidation.ConsistencyMore variety in programs and policies,and particularly regulatory or cultural,the tougher it is to consolidate.,Mercer Human Resource Consulting 2006,Criteria for Business CaseHow it varies by region by region,Drivers are the same-impact varies dramaticall
6、y between regions,USA,Europe,Latin America,Asia,China,Labour Cost,H,L,H,L,?,Locations,M,H,M,H,?,Population,H,H,M,H,?,Consistency,H,M,M,L,?,Mercer Human Resource Consulting 2006,Typical HR Shared Services ModelIn the final state,Geography/Business Unit HRBU specificAdministrative,Geog/BusUnit HR,HR C
7、entreof Expertise,HRService Centre,OutsourceProviders,Local HR Service,HR Shared Services,Business Units,Self-Service,Managers&Employees,Technology Platform,Mercer Human Resource Consulting 2006,Emerging Model for International HR“As common as possible as unique as necessary”*,HR Partners,HR COE,Adm
8、inistrative&Transactions,Local HR Teams,HR Governance,Common=Shared,Unique=Local,Large Workforce,SmallWorkforce,Virtual Shared Services,Physical Regional Shared Service,Local,Physical Regional Shared Services,Locally Outsourced,Regionally Outsourced,Local&Regional,Local&Regional,Local,Local,*motto o
9、f Cisco Systems,Sub-Regional Shared Service,Mercer Human Resource Consulting 2006,Phasing the Change Rationalisation is the first step,Dont just standardise maximise consistency in programs and processesConsistency will enable better quality and exploitation of economies of scale,The journey might b
10、e a series of smaller steps,Mercer Human Resource Consulting 2006,Criteria for SuccessNot same as business case,Rationalisation To achieve economies of scaleTechnology To get beyond immediate borders,Governance Most common cause of failureOwnership Most common cause of ROI erosion,Showstoppers,Enabl
11、ers,Shared Services is not optimisation its real change!,Mercer Human Resource Consulting 2006,Getting Ready for Shared ServicesWhat you want to do,High level of integration,consistency and organisational commitment,Desire,Ability,Best Practice,Just Starting,Consolidating,Shared Services,Not ready,V
12、ery ready,Low ROI,High ROI,Mercer Human Resource Consulting 2006,Unintegrated platformsInconsistent data and processesLeadership unwilling to mandate consistencyHR not professionally trained,PlatformsDataLeadershipCompetence,Getting Ready for Shared ServicesWhat you can do,Just Starting,Some integra
13、ted platformsWorking toward quality dataWillingness toward consistent data and processesLeadership commitmentIncreasing professional competencies,Consolidating,Integrated platformsHigh quality dataConsistent and integrated data and processesTotal organisational commitmentProfessionally trained HRFoc
14、us on measurement,Shared Services,Mercer Human Resource Consulting 2006,Internatl TelecomsGreat result.CEO/VPHR commitment.Global US ChemicalAbandoned.Could not agree governance.Global US FoodComplete autonomy.Start with rationalisation.Global Hi-TechFocus on policy and process harmonisation.Global
15、Japanese Hi-TechInternal teams.US used as the pilot.Global German ManufacturerAbandoned.Challenge too big.Return too slow.,Some Examples With variety of outcomes,Mercer Human Resource Consulting 2006,Common Misconceptions about HR Shared ServicesEconomy of scale and depth of expertise is better for
16、business support,DecentralizedMore competitive local serviceFew local HR services add distinct value to business.More economical local serviceFew economies of scale or leverage of technology know the true cost/benefit of serviceLocals can give better serviceSmall volumes result in fragmentation with
17、 higher risk of inconsistency/inaccuracy.Better employee relations Fast quality service,supported by better expertise provides better service and customer satisfaction,ConsolidatedBetter corporate controlDepends on the governance model.Can not cope with a unique local businessesEasier to have specia
18、lists that can ensure depth AND consistency.Cumbersome and expensiveConsolidation affords superior technology,better measurement and larger more knowledgeable resource pool.Not be responsive to my business missionSpecialist resource pool,if coordinated by the Business HR partner,can deliver a more r
19、esponsive service.,Mercer Human Resource Consulting 2006,Operation of HR Shared Services ModelWhere does it happen?Where should it happen?,Current State v.Future State,Identify Business Need,High Level Design,Detailed Design,Rollout New Process,Operate New Process,Define Success Measures,Policy&Stra
20、tegy,Global Governance,Regional HR,Shared Center of Expertise,Shared Transaction Center,Business Unit HR,Site HR,Mercer Human Resource Consulting 2006,Delivering HR Service in Diverse RegionsOrganisational Options,DomesticCountry 1,RegionHQ,DomesticCountry 3,DomesticCountry 2,RegionHQ,Expatriate Man
21、agement,Option 3:“Centres of Excellence”,Region SSC,Country 4,Option 4:“Regional Centre”,RegionalCentre,RegionHQ,RegionalSouthern,RegionalNorth,Some high level options of the type of HR organisational models that have been deployed in Europe,Mercer Human Resource Consulting 2006,Main reporting line,
22、Secondary/administrative reporting line,HR Function in a Region,Where Are You?The Regional Map,Mercer Human Resource Consulting 2006,Where Are You?The old map:Traditional multinational corporation,Mercer Human Resource Consulting 2006,Where Are You?The new map:Multinational with shared services,Merc
23、er Human Resource Consulting 2006,SBU HR Partners20 people(ratio 1:1000):1 per business unitCentre of Expertise15 people 5 centresSites/country120 people over 40 sites:reduced from 300Service Centre90 people(ratio 1:220 ratio)including payrollOverall Ratio1:95,Total Headcount:22,000,Overall Cost Reduction 20%,HR Shared Services in Europe:An example,Mercer Human Resource Consulting 2006,Undertaking Your Journey:Detailed process analysis is critical,Thank you,
