Why 2023 Is the Year for Organizations to Leverage HR Shared Services
According to Gartner’s research:
- The digital transformation of the business is a top priority for over 80% of CEOs.
- Since 2010, there has been a 25% increase in the proportion of companies discussing talent during their earnings calls. Developing and implementing a talent strategy that supports rather than hinders corporate growth is a key focus for HR.
2023 can be seen as a year of immense opportunities for HR shared services. In essence, HR shared services refer to a centralized service model where HR tasks such as payroll, benefits, and employee data management are consolidated and administered.
Over time, HR-shared services have evolved from a cost-cutting measure to a strategic approach that drives efficiency, standardization, and employee experience. Modern HR shared services leverage advanced technologies, data analytics, and automation to enhance productivity and improve decision-making.
The State of HR Operations Today
HR departments face several challenges in today’s business landscape, including increasing pressure to reduce costs while simultaneously providing a better employee experience. Additionally, organizations must adapt to changing workforce demographics, shifting employment laws and regulations, and the need to leverage technology to remain competitive.
HR leaders must balance competing priorities while delivering measurable business value, managing risks, and driving employee engagement. Failure to meet these challenges can result in decreased productivity, high turnover rates, and damage to the organization’s reputation.
HR shared services can help organizations address the challenges facing HR departments in several ways.
- By centralizing and standardizing HR processes, organizations can achieve significant cost savings while improving the quality of HR services. This enables HR teams to focus on strategic initiatives such as employee engagement, retention, and development, which can further help to improve the overall employee experience.
- Additionally, HR-shared services can provide greater scalability, enabling organizations to quickly adapt to changing workforce needs, support growth and expansion, and leverage advanced technologies to drive efficiency and productivity.
- Moreover, organizations are better equipped to manage risks, comply with changing regulations, and improve their overall HR performance.
Advancements in HR Technology
Several technological advancements have made HR-shared services more effective and efficient in recent years. One of the most significant is the adoption of cloud-based HR management systems, which provide greater accessibility, flexibility, and scalability.
Additionally, advanced analytics and data visualization tools enable HR teams to extract insights and identify trends that can inform decision-making. Automation and robotics also play a crucial role in enhancing efficiency, reducing errors, and freeing up HR staff to focus on high-value tasks.
Not to mention the criticality of AI in powering all these technological interventions. In fact, Tidio recently carried out research and outlined how:
- 95% of the HRs agree to AI’s usefulness for helping with candidates’ applications
- 68% of the recruiters agree that AI’s inclusion could remove unintentional bias from the hiring process
Cloud computing, AI, automation, etc., are transforming HR operations in several ways.
- Cloud computing provides the flexibility and scalability needed to manage HR processes from anywhere while also reducing infrastructure costs.
- AI-powered tools enable HR teams to automate repetitive and time-consuming tasks such as resume screening, scheduling interviews, and answering employee queries — freeing up time for higher-value activities.
- Chatbots powered by natural language processing (NLP) can provide real-time HR support to employees, enhancing their overall experience. Data analytics and predictive modeling enable HR teams to extract insights from large data sets, such as employee performance data and engagement surveys, to inform strategic decision-making.
- Mobile apps and self-service portals enable employees to access HR services and information easily, improving engagement and productivity.
The Business Case for HR Shared Services in 2023
In today’s rapidly changing business environment, HR departments must be agile and responsive to remain competitive. To that end, HR leaders must develop and implement HR strategies, which align with the organization’s goals, anticipate workforce needs, and enable employees to adapt to changing circumstances. They must leverage advanced technologies, data analytics, and automation to enhance their performance and support strategic decision-making. Failure to do so can result in decreased productivity, proliferated turnover rates, and damage to the organization’s reputation.
HR shared services can help organizations achieve agility and responsiveness by centralizing and standardizing HR processes, allowing HR teams to focus on strategic initiatives such as employee engagement, retention, and development. They provide greater scalability, enabling organizations to quickly adapt to changing workforce needs and leverage advanced technologies to drive efficiency and productivity.
Best Practices for Implementing HR Shared Services
It’s noteworthy that implementing HR-shared services can also present several challenges for organizations. To overcome them, organizations should consider the following strategies:
- Communication: Ensure clear communication with all stakeholders about the objectives, benefits, and potential impact of the HR shared services initiative.
- Change Management: Develop a robust change management plan to manage resistance and ensure buy-in from all stakeholders.
- Training: Provide adequate training to all staff involved in the HR shared services initiative, including HR staff and employees.
- Standardization: Ensure that HR processes are standardized across the organization to ensure consistency and avoid confusion.
- Data Management: Develop a robust data management strategy to ensure data privacy, security, and accuracy.
- Continuous Improvement: Implement a continuous improvement process to monitor and improve the effectiveness of the HR shared services initiative over time.
By following these strategies, organizations can overcome the challenges of implementing HR-shared services and achieve the desired benefits of increased efficiency, cost savings, and improved HR service delivery.
The Bottom Line
All in all, the business case for leveraging HR shared services in 2023 is strong, as organizations must remain agile and responsive in the face of rapidly evolving market. They must be cognizant and ell-versed with the latest HR technology and trends to stay ahead of the curve and gain a competitive advantage in attracting and retaining top talent.
At Pierian, we evaluate organizations’ HR needs and assist them with talent acquisition, workforce management, and policy and framework design. Explore our people practices here.