Top 5 Challenges of HR Shared Services and Role of Lean Strategy

Global companies have already started adopting and continue to consider shared services business model or an outsourced shared services companies as part of their business strategy. Some companies have made strides in developing globally coordinated approaches to service delivery that include strategies and governance structures in shared services.

However, majority of the companies are facing challenges in meeting their visions and objectives. Let’s understand what they are.. the top 5 lead challenges of HR shared services–

Change Managementr
Technology change is constant. Businesses must be quick to adopt these changes, or risk being left in the dust by their competitors. The challenge for business leaders is getting employees to embrace innovation and learn new technology. However, managing change emerges as a significant problem for Human Resource, partly due, to the fact that this change is not a priority for them and partly due to lack of focus and required training available on how to deal with, accept and leverage change. Updating and maintaining with the changing employment laws globally and its impact on business processes is a struggle for business leaders. Many times, they ignore employment laws, believing that these change in the process do not apply to their business. But later audits reveal the gaps, followed by lawsuits, and possibly even the end of the company.

Leadership Developmentr
It is one of the KRA for HR professionals to find performers achievers and future leaders within the organisation. These are achieved through various processes and tool such as predictive assessment tools, focusing non-performance and evaluate high-potentials, replacing annual performance reviews and Implementing job rotation and many more methods through their business process to provide prospective leading trends in their organisations. It is HR’s responsibility to ensure that the corporate culture boosts performance, and these executives will be able to take leadership roles in the future. In many cases, HR does not have the right resources to do this process and meet the objectives.

HR Effectiveness Measurementr
The importance of Key Result Areas and Performance Metrics are not carried process-oriented and objectively. No improvements can take place if HR does not have the right tools to measure results. The fundamental perception of HR as “support function” needs to be changed. To understand the significance of evaluating resources, the role of HR called as administrative or a support function to a strategic partner of the organisation.

Compensation managementr
Organisations are struggling to derive how best to structure employee compensation. Businesses have to compete in the competition and also keep in pace with the changing business dynamics. They have to consider the cost to the company with such as benefits, training, taxes, and other administrative expenses, which can range from 1 to 3 times the employee’s salary. If there is no proper performance-based reward management system, this will set a negative impression on them and about their employers. Also, not offering any incentive programs, for instance–profit sharing or bonuses can really disappoint the employees and show in their performance.

Workplace Diversity:
Multiple generations, Ethnic and cultural differences are a few other factors that make workplace diversity a continual challenge for businesses. Without right processes that are in tantum with the prevailing laws and failing to protect employees will be further embarrassments for the organisation. Not having a culture of teamwork, systems and synergy will keep the work environment negative and less productivity.

Now, look at how best-in-class companies are facing the above challenges. Organisations on the shared services business vary in their workforce demographics, leadership initiatives, business locations, organisational culture, and HR functional maturity. It is not a surprise that their paths to success are different as well. The creating and maintaining a high performing global shared services organisation is a complex, multi-year process that requires patience and persistence. To maintain performance, it is helpful to focus first on the basic elements such as cost, time, and quality that yield the most tangible benefits fand returns for the organisation. The quickest hits will be in areas where your processes are most mature and consistent.

Lean Strategies for HR Shared Service Delivery

Adoption of Lean Strategy and Six Sigma are very much applicable to HR shared services. Lean is about eliminating waste, and the typical service delivery function expends more than half of its resources on waste – that is, performing activities that do not directly deliver value for the customer.

Lean thinking and Strategies to Eliminate Service Waste–
Customer’s needs should be met on the first call or done the very first time.

Designing of the model to handle exceptions efficiently and effectively.

Eliminating poor-quality input channels and quality which soar while costs plummet.

Shared Service (and Global Business Services) organisations can drive efficient processes with strong controls as the result of the implementation of Lean Strategy and Six Sigma practise. Coupled with a Business Process Management Methodology, these efficiencies can extend beyond Shared Services to entire global processes.

Are you ready to make the leap into digital transformation? To know more about TSS Lean Consulting, please visit www.tssleanconsulting.com

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