Monday, September 20, 2010

Measuring Impact: HR Shared Services

As I think about the last few weeks I have had the pleasure of interacting with many HR professionals regarding HR Metrics.  Last week,  I discussed the Evolution of HR Metrics and this week I would like to chat about Shared Services and HR Metrics.

In my workshop at the HR Metrics Summit hosted by IQPC, I asked where people were in their HR journey and about 30% were in infancy or just starting, about 30% had metrics but weren't sure if they were they right ones and about 30% were looking for metrics for a Shared Services model for HR.  This made me stop and think.

For shared services to be effective, most people think about cost savings to operate HR, headcount reduction, and customer service effectiveness.  So you may have metrics that look something like this:

1) HR cost per employee
2) HR staff/FTE ratios
3) Customer satisfaction scores
4) Problem resolution metrics
5) Time to solve problem
6) Average time on call
7) Calls per CSR
8) Calls resolved on first call
9) ROI
10) Service Level Agreement measures (SLA's)

So, by definition we are measuring a transactional function that handles functions like payroll, benefits, and record keeping, policies and procedures, etc.

My question is this...what metrics can we use that points to the strategic impact an HR Shared Services model can provide?  

After all, if HR moves to this model, doesn't that free up some time for top HR professionals to be strategic.  (that is the theory).  A recent article in SHRM's HR Magazine discusses the shared services model and lessons learned to date.  (have to be a national  SHRM member to view).

According to the HR Magazine's Article,  Saving Share Services, the size of companies that are moving to shared services are smaller.  In other words, shared services aren't just for the larger companies.  So, with this model looking better and better as companies are trying every way to save pennies, we need to figure out how to show impact especially in the strategic area.

Do we need to make sure that HR Shared Services and the HR Department collaborate on these metrics as you can't be effective in one area without the other? (Transactional and Strategic)

I have some ideas about metrics for HR shared services that point to impact, but I would love to hear from you to see what has worked for you and how you have handled these metrics.
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