Sharing HR services with other organisations can be an effective way for companies in the UK to streamline operations and reduce costs. Many businesses are choosing to outsource certain HR functions or partner with other companies to create shared service centres. This allows pooling of resources and expertise while achieving economies of scale.
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*This is a collaborative post. What Are HR Shared Services?
HR shared services essentially involve consolidating the HR operations of different business units or companies. Core HR functions like payroll, benefits administration, HRIS management, and recruitment may be centralised into a separate business unit or outsourced to an external provider. This allows each organisation or business unit to focus on their core operations while leveraging shared HR services.
Some key advantages of shared services include:
- Cost savings – Organizations can save money by eliminating redundant HR operations and technology investments. Shared services drive economies of scale.
- Increased efficiency – Standardised, streamlined processes improve efficiency. Shared services centers develop specialised expertise.
- Access to talent – A larger shared services team allows access to specialised HR talent and resources.
- Data integration – Data, reporting, and metrics can be integrated across the organisations.
- Strategic focus – HR teams can focus more on strategic priorities and enhancing the employee experience when administrative tasks are handled by the shared services centre.
Shared Services Options for UK Businesses
There are a few different options for implementing shared HR services:
Insource Model
Some large corporations centralise the HR operations of their different business units into an internal shared services centre. This keeps the function in-house but consolidates talent and systems.
Outsource Model
HR functions are outsourced to an external service provider. This vendor handles transactional and administrative HR work for multiple clients.
Joint Venture Model
A shared services centre is created as a separate joint venture entity and is jointly owned by the participating organisations. The joint venture operates the HR shared services for their owners.
Public Sector Shared Services
Within the public sector, government agencies can share HR services to gain efficiencies of scale while handling government regulations consistently across departments.
Key Considerations for UK Organizations
Some key considerations for UK companies exploring HR shared services include:
- Defining which HR functions to include in the shared model vs keeping in-house. Organisations often retain strategic, consultative HR roles internally.
- HR technology requirements. Will existing systems integrate with the shared centre? This is key for payroll, HRIS, etc.
- Data protection and privacy regulations. Shared services centres must ensure compliance with UK regulations.
- Communication to employees about any changes, timelines, contacts, etc. Clear communication and change management is critical.
- Oversight model and SLAs to ensure shared services alignment and performance. Periodic evaluation is important.
- Cultural fit. Aligning organisational culture and values across the shared services model.
- Cost-benefit analysis. Projecting cost savings and service improvements.
Shared HR Services Can Streamline Operations
Exploring HR shared services allows organisations to leverage combined resources and expertise. For many UK companies, sharing your HR services with strategic partners or outsourcing vendors can drive cost efficiencies and enable strategic focus. With careful planning for change management, data security, and performance, shared services can transform HR operations in impactful ways.
*Disclaimer – This is a collaborative post. This post has been pre-written.