Another opportunity to extend HR Shared Services—COEs

Posted by Vyas Anantharaman, Kelley Taylor, and Diksha Dehal on June 03, 2016

We’ve devoted a few discussions to how organizations can make better use of HR Shared Services (HRSS) and why they should. Today’s HRSS centers are more innovative, more technologically proficient, and far more interactive and knowledge-based than they have traditionally been perceived. These advancing capabilities make HRSS well-suited to support another vital area of HR: COEs (Communities of Expertise). With a few targeted steps up front to help facilitate the transfer, services traditionally handled in COEs can also be handled effectively and efficiently via HRSS. The goal is not to diminish or replace COEs, but to free their resources for more value-added activities.

Transaction-oriented HR operations—“hire to retire” activities—have become common candidates for transfer to an HRSS environment. But many organizations have been reluctant to transfer more knowledge-based activities residing in COEs, deeming them too specialized or not routinized enough to be handled well outside the COE. In our experience, this thinking can short-change the value both COEs and HRSS can bring to the organization. Careful evaluation can help determine which processes an HRSS organization can take on, giving the COE added bandwidth to continue to drive the strategic business agenda forward.

What to consider when moving processes from COEs to HRSS
If a process or function isn’t strategic or doesn’t require fresh thinking or new approaches from the COE, it should be evaluated for possible transition to HRSS. Repeatable, operational processes with steps that can be standardized and carried out with minimal COE oversight are good candidates for transfer. For example:

  • Employee services or recruiting-related activities. Job descriptions, offer letters, contracts, employee data management, and other more routine activities could be evaluated for a move to HRSS.
  • Total rewards activities. If COEs are spending more time administering compensation surveys than analyzing the results and developing a compensation plan, the administration component is likely not value-added and may be better handled by HRSS.
  • Vendor management. Organizations can consider a quarterly business review cycle, where the COE can provide guidance and evaluation on vendors but doesn’t have to handle day-to-day management.

Managing the transition
Whenever work is transitioned to an HRSS environment, organizations should take steps to manage the transfer in a way that discourages the work from migrating back to the originating team. Moving HR work so it does not move backhighlights the importance of “shoulder surfing” to observe and mirror how processes and procedures are properly executed and certifying HRSS team members’ competency before going live in the new environment.

Transitioning more complex, specialized services requires some additional steps and critical connection points to first facilitate the transfer and then support “stickiness” of the work. These include:

  • Defining a service catalog. Service center leaders and HR leaders should work closely to determine which services will reside in the service center and which will stay in the COE. A few of the areas where we have seen particularly effective transfer are services related to:
        • Data management
        • Talent acquisition/Sourcing
        • Mobility, with HRSS handling policy questions rather than the Mobility COE
  • Completing a RACI analysis. RACI is a framework that clarifies the roles in completing tasks or making decisions for a business process by specifying the individual(s) who are Responsible, Accountable, Consulted, and Informed.

Not a COE substitute; a value driver
How does the role of the COE change when some work is moved to HRSS? In the context of RACI, the COE becomes more accountable rather than responsible. The COE continues to be strategic to the business and market, serving as a trusted advisor to the business. It is able to manage more volume and scope of work through an extended service delivery model as well as drive more process efficiency and standardization of policy.

Transferring work to HRSS is not meant to replace COEs. Truly specialized activities such as benefit plan design, program design, total rewards strategy, and compensation design, for example, are what COEs were created for and what they do well. In turn, the administrative aspects of these programs (vendor management, project management, analytics, and the like) are where HRSS can shine.

It’s this divide and conquer strategy of allocating responsibilities where they can be accomplished most effectively, and optimizing the related processes along the way, that ultimately adds value to the organization.

Vyas Anantharaman is a senior manager in the HR Transformation practice of Deloitte Consulting LLP, working with clients to help solve their complex HR and HR IT challenges.
Kelley Taylor is a specialist master at Deloitte Consulting LLP where she works with large, complex, global clients covering every phase of HR Transformation from strategy and design through implementation and post go-live support.
Diksha Dehal is a senior consultant in the HR Transformation practice at Deloitte Consulting LLP. Her client service work has focused on large global HR transformations with a lens on shared services and outsourcing in particular. Currently she is the national Chief of Staff for the practice.

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