MANAGEMENT OF HUMAN RESOURCE

Management of Human Resource

Management of Human Resource: SCC

Executive Summary

This paper will focus on this latter type of HR shared services. Arguments have been made that HRM needs to be strategically proactive and entrepreneurial in order to be a driver of strategy (Brockbank, 1999). By centralizing the delivery of the administrative aspects of the HR function, senior HR professionals can concentrate on providing strategic input to the organization. Despite the hype of the HR shared services model, few academic studies have been carried out to investigate challenges to implementing a successful HR services center. This omission is in part due to the fact that the HR shared services center is a relatively new organizational form. The adoption of an HR shared services model has implications for different groups of employees in the organization. The employees most likely to be affected include the line management, the employee users of the services, and the HR staff both within and outside the shared services center. However, the impact of adopting an HR shared services model on different groups of people has not been sufficiently explored. In contrast, there exists a burgeoning body of prescriptive literature espousing the value of these delivery models and methods for starting one. As a result, a significant gap remains between literature espousing the efficacy and utility of HR shared services and the extent to which the adoption of such a model proves to be successful.

Introduction

The delivery of the human resource function has undergone considerable changes in recent years, especially within large multinational corporations (MNCs). Traditionally, the typical HR structure in a large MNC starts with a small team at the corporate level that is responsible for strategic issues. Much of the operational HR function is carried out at the national level. This function is often devolved to the branch-office level, supported by a small on-site HR department. However, an increasing trend in recent years has been the establishment of HR shared services centers that deliver these functions more centrally, and often more remotely, from the subsidiaries of the firm. For example, in 2001, the Shared Services and Business Process Outsourcing Association (2003) con ducted a survey of 120 participating firms worldwide across a range of industries. The results revealed that most shared services centers were relatively young—only 41% had more than two years of experience. Nearly one-quarter of the survey respondents were in the discussion or planning stages, and an additional 18% were in their first year of setting up shared services centers.

In terms of user orientation, there are two broad types of HR shared services. The first is the set of shared services set up by large organizations to provide HR services both to their own organization and to external client organizations as an outsourcing business. Examples of these organizations include BAE Systems in the United Kingdom. The second type of HR shared services refers to those set up, again, by large and often multinational or multisite organizations that aim to restructure their HR ...