Consolidating the business of HR

Reorganizing benefits administration, payroll and other functions through shared services and — potentially — outsourcing.
By Barbara Quinn
|Canadian HR Reporter|Last Updated: 03/23/2002

There are your HR personnel located? Are they scattered across divisions and sites, performing similar tasks? Consolidating human resources staff under one roof — termed shared services — is a strategy that allows for greater efficiency, laying the groundwork for a more strategic deployment of HR.

Shared services evolved over the last decade as a strategy for the delivery of internal services within large multi-national private sector organizations. The consolidation of backroom transactional processing activities brought significant cost savings through reductions of duplication, the development of common standards and processes, and the application of technology to processes.

Early adopters of shared services were typically chief financial officers in Fortune 100 companies who foresaw the cost saving opportunities by combining accounts payable and receivables. They built huge global shared service centres and proved that the service could be effective and centrally delivered. Although shared services had most appeal for large companies with huge decentralized processes across provinces and even countries, small and mid-sized companies can benefit from shared services by adopting some of the disciplined practices that make it a great improvement over the bad old days of centralization.