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June HCM Webinar: HR Shared Services Benchmarking – Results, Trends, and Key Metrics
Karen Hilton, ScottMadden
Scott Manning, ScottMadden
1©2013 APQC. ALL RIGHTS RESERVED.
Presenters
Scott ManningPartner and Corporate &
Shared Services Practice Lead
Karen HiltonPartner
Copyright © 2013 by ScottMadden. All rights reserved.
ScottMadden’s HR Shared Services Benchmarking Survey
Second Annual Benchmarking Study Conducted in Partnership with APQC
APQC HCM Community of Practice Call
June 12, 2013
Copyright © 2013 by ScottMadden. All rights reserved.
Agenda
Introduction
About the Survey
Survey Highlights by Topic
Summary
How to Participate in Next Cycle
3
Copyright © 2013 by ScottMadden. All rights reserved.
Introduction – Our Focus
A general management consulting firm recognized as a leader in shared services – human resources, accounting and finance, engineering services, information technology, supply chain, and similar administrative functions.
We provide seasoned, experienced consultants
Our partners consult, devoting > 50 percent of their time to direct client consulting
We have extensive knowledge of all aspects of shared services
We have strong functional expertise across an array of support service disciplines
While we leverage best practice information and our experiences, our solutions are tailored to the unique situations of our clients
We are solidly grounded in theory, but our solutions are practical and implementable
Our opinions are unbiased; we do not sell software or outsourcing services
We manage our projects to build buy-in and support throughout the process – we focus on implementation
We serve each client's best long-term interests
We conduct ourselves with integrity throughout every aspect of our business
We value our role as advisor – we provide honest and candid counsel
We actively involve our clients in the assignment and focus on transferring knowledge and skills to promote self-sufficiency
Experienced, Professional
People
Customized, Actionable
Solutions
An Exceptional Consulting
Experience
4
Copyright © 2013 by ScottMadden. All rights reserved.
Introduction – Our Work in Shared Services
Decide Design Build Improve Strategy development
and integration
Benchmarking
High-level business
case
Change management
Service delivery
model design and
scope delineation
Detailed current
state, future state,
and business case
Sourcing model
Organizational design
Change management
Project planning and
management
Service/transaction
center build
Process redesign
Detailed organization
design and staffing
Technology design,
selection, and support
Training
Facility design and
set-up
Change management
Process
improvement/ cost
reduction
Operations/
technology
assessment
M&A integration
Benchmarking
Customer and
employee surveys
Change
management
Our Functional Expertise
Finance and
Accounting
Human
Resources
Supply Chain
Management
Information
Technology
Real Estate and
Facilities
Multi-Function
Engineering
Services
Administrative
Services
5
Copyright © 2013 by ScottMadden. All rights reserved.
Note: Representative sample; not all-inclusive of clients within an industry or industries served.
Excludes numerous well-known Global 100 clients due to confidentiality agreements.
Introduction – A Sample of ScottMadden Clients
Consumer
Products and
Services
Manufacturing
Technology and
Communications
Public Sector
and
Government
Energy and
Utilities
Healthcare and
Pharmaceuticals
6
Copyright © 2013 by ScottMadden. All rights reserved. 7
Introduction – Shared Services Overview
SHARED SERVICES
DECENTRALIZED CENTRALIZEDService Culture
Efficient Delivery Model
Best Practices
Independent Entity
Redundant
Inefficient
Non-Standardized
Unresponsive
Detached from
Business
Inflexible
Customer
Focused
Business
Intelligent
Economies
of Scale
Standardized
Processes
Infrastructure
Metric Driven
Combines the best of both worlds
Copyright © 2013 by ScottMadden. All rights reserved. 8
Service Center
Introduction – Leading Practice HR Shared Services Delivery Model
Shared services
Transactions
Information and tools
Routine services
Administrative support
Key Attributes:
Service structured and delivered based on type of work performed
Leverages centralized and decentralized components
Heightens focus on the customer
Increases service delivery at entry or lower service tiers
Leverages technologies
Focuses on proactive analysis and responses
Defines services clearly and bases services on customer needs
Customer-facing
Consulting services
Liaison to Centers of Expertise, as appropriate
Business Partners
Design programs
Deliver services to business units
Tier 3 support for service center
Policies and governance
Centers of Expertise
Line Managers
Employees
Policies/governance
CorporateAssisted
Support
Tier 1
Tier 2
Data Warehouse/ Knowledgebase
Interactive Voice
Response
Self-Service
Tier 0
Customers
Service Interface/
Service DeliveryStrategies,
Programs, and Policies
Vendors
Copyright © 2013 by ScottMadden. All rights reserved.
About the Survey
Survey Project and Timeline
Identified gap in HRSS benchmarking data specific to service center and COE staffing and metrics
Engaged APQC to conduct study; ScottMadden-designed questions
Leveraged APQC’s benchmarking methodology and member network
Conducted first cycle in Fall 2011
Conducted second cycle in Fall 2012
Survey Target Audience
U.S. or North American HR shared services organizations that include a service center and centers of expertise
9
Survey Scope:
• 34 metrics
• 19 qualitative questions
Copyright © 2013 by ScottMadden. All rights reserved.
Polling Question
How mature is your shared services model? (choose one)
We do not have a shared services model
Planning to implement – in planning stages
Less than 2 years
Between 2 and 5 years
Greater than 5 years
10
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About the Survey
Survey scope covers four major areas:
11
Staffing
SSO Management
Infrastructure and
Technology
Delivery Model &
Operations
Performance
Copyright © 2013 by ScottMadden. All rights reserved.
Participant Overview
Participation was fairly balanced across maturity levels and industries
12
Industries RepresentedHow many years has your HR
SSO been in existence?
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Participant Overview (Cont’d)
More than half of the participants came from companies with more than $5 billion in revenues
13
Participant Revenue
19%
21%
21%
38%
2%
Less than $1 billion
Between $1 and $5 billion
Between $5 and $10 billion
Greater than $10 billion
No Response
Copyright © 2013 by ScottMadden. All rights reserved.
Survey Highlights – Delivery Model & Operations (Global)
A variety of global models exist; two-thirds indicate a global business services model
14
What type of global geographic model is used?
Regional centers, with
global management
and integration
36%
Site/country-specific
centers run locally21%
Single global center18%
Site/country-specific
centers with global
management and
integration12%
Other9%
Regional centers, but run locally
3%
= Global Business
Services
Copyright © 2013 by ScottMadden. All rights reserved.
65%
35%
66%
34%
0%
20%
40%
60%
80%
100%
Yes No
Sh
are
of
Resp
on
den
ts
2011 2012
Survey Highlights – Delivery Model & Operations (Org Structure)
A tiered approach continues to be most common for service center staffing
Use of a tiered model does not appear related to SSO maturity
15
Is a tiered approach used as part of
the service center staffing model?
Copyright © 2013 by ScottMadden. All rights reserved.
0% 50% 100%
Defined benefit and definedcontribution administration
Employment verification
Benefits administration
Unemployment
Relocation
% Outsourcing Service
0% 50% 100%
Employee policy questions
Separations and severanceadministration
New hire processing
Workforce administration
Employee files/recordsmanagement
% Providing Service In-House
Survey Highlights – Delivery Model & Operations
Typical scope items reported were not surprising…
16
Top 5 Outsourced Services
= Top 5 in 2011
Top 5 Insourced Services
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Survey Highlights – Delivery Model & Operations (Centers of Expertise (COEs))
Talent Acquisition and Talent Management COEs generally show higher staffing levels
17
Total Company Employees per COE Headcount
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Survey Highlights – Delivery Model & Operations (COEs Cont’d)
Location of staff across COEs
Compensation and Benefits COEs are most often co-located with other COEs
18
Co-Location of COEs with Other HR COEs
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Survey Highlights – Delivery Model & Operations(COEs Cont’d)
Degree of staff co-location within COEs
Mixed models are in place
Talent Acquisition and Employee and Labor Relations COEs are more likely to have virtual staff
19
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Survey Highlights – Delivery Model & Operations (Field HR)
While not commonly considered part of SSOs, field HR is important to the overall delivery model
20
Company employees per field HR headcount
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Survey Highlights – Delivery Model & Operations (Field HR Cont’d)
Most respondents have multiple position types in their field HR organization
21
Do you have multiple position
types within your field HR
organization?
If so, what types are included?
Copyright © 2013 by ScottMadden. All rights reserved.
Survey Highlights – Staffing (Service Centers)
Median service center staffing reflects relatively high service center staff (not aligned with traditional 1:1000 ratio)
22
338
962
1324
383
751
1249
0
200
400
600
800
1000
1200
1400
BottomPerformer
Median Top Performer
2011 2012
Total Customers (Employees and Retirees) per
Service Center Headcount
Copyright © 2013 by ScottMadden. All rights reserved.
Survey Highlights – Staffing (Service Centers)
Tier 2 staffing levels are higher than Tier 1
Reflects shift to higher value services and increased use of self-service
23
Total Company Employees per Service Center Headcount by Tier
964
1,641
2,679
431
1,125
2,462
0
500
1,000
1,500
2,000
2,500
3,000
BottomPerformer
Median Top Performer
Per tier 1 headcount
Per tier 2 headcount
Copyright © 2013 by ScottMadden. All rights reserved.
Survey Highlights – Staffing (Span of Control)
As seen last year, broader spans of control exist for Tier 1 staff than Tier 2 staff
24
Tier 1 Span of Control Tier 2 Span of Control
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Survey Highlights – Staffing (Service Center Specialists)
Median staffing ratios for service center specialists show more staff focused on employee relations or workforce administration activities
25
Total Company Employees per Service Center Specialist Headcount
Copyright © 2013 by ScottMadden. All rights reserved.
Survey Highlights – Performance
Performance by model differs on key service center metrics
— Tiered models have better Average Speed to Answer
— Non-tiered models achieve higher First Contact Resolution
26
First Contact Resolution Compared
by Delivery Model
Average Speed to Answer Compared
by Delivery Model
Copyright © 2013 by ScottMadden. All rights reserved.
Survey Highlights – Performance (Productivity)
Top performing service centers are able to handle almost five times as many transactions and almost six times as many calls as bottom performers
27
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Survey Highlights – Performance (Cost)
Top performing service centers’ cost per employee served is less than a quarter of that of bottom performing centers
28
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Survey Highlights – Performance (Talent Acquisition Activities)
SSO productivity on recruiting and staffing activities shows wide variation
29
Total requisitions per
recruiting/staffing service center
specialist headcount
Total hires handled per
recruiting/staffing service center
specialist headcount
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Survey Highlights – SSO Management Infrastructure and Technology
Despite 85% of respondents having shared services in place for multiple functions, over three quarters report into an HR executive
30
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Survey Highlights – SSO Management Infrastructure and Technology (Cont’d)
SLA use shows less formal approaches are becoming more common
31
To what degree are service level agreements used?
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Survey Highlights – SSO Management Infrastructure and Technology (Cont’d)
Fewer are using charge-backs for services
32
In what way are services delivered by the HR shared
services organization charged back to customers
Copyright © 2013 by ScottMadden. All rights reserved.
Survey Highlights – SSO Management Infrastructure and Technology (Cont’d)
For portals, the majority of top performers in portal volume have portals with personalized content and full-system integration
33
Nature of Portals Used by
Respondents
Personalized content with full-
system integration26%
Personalized content with
limited system integration34%
Some personalization of
content without system
integration
6%
Static, non-personalized
content30%
Do not leverage a portal 4%
Copyright © 2013 by ScottMadden. All rights reserved.
Summary – Overall Findings
A tiered delivery model continues to be most common for HR service centers
SSO staffing is higher for tier 2 specialists versus tier 1 generalists due to a shift to higher value services and increased use of portals and self-service
Governance of the HR SSO by an HR executive is most common
Some elements of traditional SSO management infrastructure are showing lower adoption
Top performing SSOs continue to achieve significant efficiency gains and cost performance
34
Copyright © 2013 by ScottMadden. All rights reserved.
Summary – Top Performer Characteristics
While not conclusive, top performers across key metrics had these characteristics:
Use a tiered delivery model
Are more mature (most with 3 or more years of maturity)
Are governed by a lead HR executive
Are part of a global SSO
35
Copyright © 2013 by ScottMadden. All rights reserved.
How to Participate in Next Cycle
1. Contact us at [email protected]
2. Receive an overview of the study and metrics included in last cycle
3. Expect follow-up regarding next cycle in late summer or early fall
36
There is no cost to participate
All participants receive a detailed report of all
metrics and qualitative results
Peer group comparisons are provided where
relevant
www.scottmadden.com
Karen HiltonPartner
2626 Glenwood AvenueSuite 480
Raleigh, NC 27608919-781-4191
Scott ManningPartner and Corporate & Shared
Services Practice LeadTen Piedmont Center, Suite 805
Atlanta, GA 30305404-814-0020
38©2012 APQC. ALL RIGHTS RESERVED.
Assess the Need for HR Shared Services
Moderate or High Performer? Which is your HR Department?
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Build the Business Case for HR Shared Services
Making the Journey from Moderate to High-Performance HR
HR still has an “administrative burden”
Outcomes from alternative approaches to administration such as technology or outsourcing acceptable but not superb
Strategic HR Partnerships
HR functions that are not strategic business partners retain a large portion of their operational and transactional HR duties
40©2012 APQC. ALL RIGHTS RESERVED.
Build the Business Case for HR Shared Services
Read our blog to learn about this case study based research project which is currently in the analysis and reporting phase:
Developing Strategic HR Partnerships
Watch for the findings in APQC’s Knowledge Baseand on our AllThingsHCM Web page:
http://www2.apqc.org/allthingshcm
41©2012 APQC. ALL RIGHTS RESERVED.
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