Managing Boundaries Better: The Key to More Effective HR Shared Services

Abstract

Purpose

This chapter seeks to optimize HR shared services performance by highlighting the potential for service fragmentation that can arise out of in the so-called Ulrich (structure or service delivery) model.

Design/methodology/approach

The evidence used in this chapter principally comes from the author’s own work, especially research for the UK’s Chartered Institute of Personnel and Development (CIPD), and draws upon academic literature where possible.

Findings

This chapter argues that HR directors should guard against three sets of fragmentation risks. Firstly, HR shared services should be properly connected to the rest of HR to offer customers an integrated service to avoid the structure’s division of labor inducing incoherence. Second, to guard against this risk, HR directors should exercise care in outsourcing/offshoring beyond individual, discrete services because contractually or spatially separating services risks exacerbating this tendency to fragmentation. Outsourcing/offshoring may focus too much on cost savings and insufficiently on quality. So, third, HR should argue for the distinctiveness of its activities and fight commoditization that is also implied in the creation of cross-functional shared service centers.

Research limitations/implications

The arguments in this chapter could be better supported by academic research. In-depth case studies of management decision making and shared services operation would help support or challenge the chapter’s conclusion, as could quantitative evidence on the benefits/disbenefits of outsourcing/offshoring/cross-functional shared services centers.

Practical implications

We have highlighted a number of reported problems with HR shared services operation, besides the three principal risks noted above, but we have suggested possible solutions that could be adopted by practitioners.

Originality/value

HR managers may find this chapter helpful in designing new HR structures or in assessing the effectiveness of shared services that goes beyond the typical key performance indicator measures.

Citation

Reilly, P. (2014), "Managing Boundaries Better: The Key to More Effective HR Shared Services", Shared Services as a New Organizational Form (Advanced Series in Management, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 17-38. https://doi.org/10.1108/S1877-636120140000013002