The HR challenges of creating a shared services centre
Emma Harding and Raoul Parekh, March 19, 2018
Exploring the key people challenges in establishing a shared services centre and how to solve them
The shared services industry is booming, and with good reason. Large multinationals like BP and Oracle and national players like ITV have successfully implemented shared services centres. With the model now effectively proven, more businesses are keen to reap savings in an increasingly competitive world. However, it can be a demanding undertaking with a rocky road from inception to realisation. Knowing the HR challenges you're likely to encounter is the first step to planning the solution.
Know your goals
From day one you should seek to document and prioritise your objectives, involving relevant stakeholders in the process. If cost-cutting is key, continuity of service may be affected. If increasing the quality of service is paramount, heavy investment in information systems may be necessary.
This requires considerable planning time to create a business case and a detailed roadmap. However, it is time and money well spent – not least to address the next challenge...
Plan for change resistance
First, think carefully about your business culture and how end users will come to terms with the planned changes (i.e. the ‘change journey’). Aim to deliver a consistent service wherever possible, but consider differences between stakeholders. Do not assume that one size will fit all.
Explain the purpose of the changes; including what is happening and why. Ideally your explanation of why a shared services centre is being created should be tied to your business strategy. The senior management team should be well-versed on the topic; the weight of their sponsorship and engagement is invaluable.
Handle employee exits properly
Ignoring that some employees are leaving can be fatal. The aim is to keep productivity consistent in a time of change. Ideally the business should be proud of the new model and individuals should feel responsible for its success.
When the time for redundancies comes, consult with employees properly and manage the legal issues. Value this process as another opportunity to implement your communications strategy. Have legally-approved scripts to keep messaging consistent, decide and offer exit terms up front rather than drip feeding information, and have multiple channels of communication open for employees to speak about their future.
TUPE or collective redundancy law will often impose information and consultation requirements, with up to three months’ pay per employee as a penalty for getting things wrong (plus unfair dismissal damages). Engage with advisers – whether internal or external – to help spot any legal red flags. Statutory deadlines may apply, and the sooner you know these the better you can prepare for them.
Retain the talent you need
Early identification of the employees you want to stay is critical, but also consider the departing employees who are critical to the success of the transition.
You can incentivise those in the departure lounge by giving them a reason to stay – financial or otherwise. Consider a retention bonus for critical employees, with pay-outs on the achievement of objectives linked to the transition and/or business as usual activities. Be clear and consistent about what is expected and what the rewards are for meeting those expectations. Use outplacement services to assist leavers with finding new roles, which helps give employees the headspace to focus on their day jobs.
Manage an effective knowledge transition
Retaining talent isn’t enough alone; you also need to use them effectively. Work with subject matter experts to document processes and activities early on. This provides new employees with the information required to succeed. Don’t leave quality to chance – check and recheck outputs. Calculate how much time you will need to transfer knowledge and stabilise the service and use this information to plan your retention and/or exit strategy for key employees.
Emma Harding is an HR shared services professional (formerly HR shared services manager at Burberry). Raoul Parekh is a senior associate at GQ|Littler
The authors would like to thank Dónall Breen, an associate at GQ|Littler, for his assistance with this article