HR and payroll software provider MidlandHR recently published a report on shared services in the public sector, covering the different shared services models, the barriers to project approval, business drivers, the technology infrastructure, and the resulting business and financial benefits. Some of the findings from MidlandHR’s report include:
- Shared service models – Of the organisations that were currently sharing either HR and/or payroll services, 63 per cent were doing so on an internal basis across multiple departments. For those sharing externally, 18 per cent were involved in joint initiatives while the remainder were from lead or consumer organisations.
- HR and payroll shared service status – 57 per cent of respondents were sharing HR and/or payroll services, of which 33 per cent had a combined HR and payroll service and 21 per cent were only sharing payroll.
- Drivers and benefits – The top three drivers for initiating shared services were process efficiency, service quality improvement, and cost savings. These three areas were also listed as the top three benefits, suggesting that organisations that are sharing services appear to be meeting their desired objectives.
- Barriers and challenges – Organisations that had already implemented a shared service said that the top three barriers to the adoption of shared services were the organisation’s culture, lack of communication, and loss of control. However, once the shared services implementation was complete, these barriers were superseded by more practical challenges such as technical issues, implementation time and the need to develop new skills.
- Real and perceived effects – The majority of respondents already sharing (77%) reported that the intended objectives and goals had been delivered and 68 per cent believed that the project had improved the quality of service to end-users. Only 7 per cent said that the shared service had had a limited effect.
- Supporting technology – 73 per cent of people said that the underlying technology infrastructure was ‘important’ or ‘very important’, with the ability to facilitate process efficiencies cited as the most important technology attribute. Other features rated as important included the flexibility to support different user types and high performance in volume.
- Measuring the benefits – Surprisingly, 11 per cent of respondents had no clear method for measuring the success of their shared services. Overall, the top three measures of the effectiveness of shared services were process consistency, reduced duplication, and improved accuracy.
Typical implementation times – While MidlandHR and external consultants generally expect shared services implementations to take around 2-3 years, 39 per cent of those surveyed reported implementation times of less than a year from concept to fruition. However, 28 per cent did take more than three years.
