2. Foreword 3
Section 1: HR Outsourcing 3.0 — Technology Enabling HR Transformation 4
Section 2: Demystifying Big Data 6
Section 3: Case Study 9
Section 4: HR Shared Services 11
Section 5: Industry Views from AIMA’s First National
HR Shared Services Summit 13
List of Figures and Tables 33
Contents
3. Date of Publication: November 2012
DISCLAIMER
Although the authors have made every effort to ensure that the information in this book was correct at the time of publishing,
the authors do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors
or omissions, whether such errors or omissions result from negligence, accident, or any other cause.
4. 3
We are delighted to present to you the Enabling HR Transformation, HRO Handbook – Vol 2.
The Handbook is PeopleStrong’s attempt to throw light on and provide you with the latest trends and updates,
from Technology and Analytics to Service Platforms. We have also included a case study on HR outsourcing
highlighting key factors of implementation and success.
2012 will probably be remembered as the year of change – whether it be in the USA, China or even in Burma.
Change has not been in the political arena alone. Technology continues to evolve everyday and while SOCOMO
(Social-Cloud-Mobile) is still being talked about, Big Data and Analytics is changing the way we operate. This
has many implications for HR and especially HR Outsourcing. Analytics is giving power in the hands of the
leadership and HR practitioners for real-time decision making. Employees are being empowered truly ‘at their
time and their convenience’ through tools that are compatible with smart phones and tablets. HR Service delivery
is being empowered through Ease of Access (through multiple channels and devices), Self-service, Collaboration
and Analytics. Product interfaces are losing their boring MIS style interfaces and are becoming cleaner, sharper
and cooler. However, it is important to remember that technology is an enabler and it is the outcome which is
important.
I am happy to inform you that the first ever National Summit on HR Shared Services held by AIMA in August
2012 was a great success. Pankaj Bansal (Co-founder & CEO, PeopleStrong) was the Summit Director and helped
design the event. The Summit threw up much learning and proved to be an eye opener for delegates and speakers
alike. The one clear message that came out was that HR Shared Services is the foundation stone for enabling HR
Transformation and addressing higher order issues. For this to come about, innovation needs to be contextual
and not replicable. We have dedicated a section on relevant highlights from the Summit in this report.
This Handbook is second in our series on HR Transformation. We hope that it will be a useful read with
its combination of theoretical and practical ideas from the HR industry, and will aid your company’s HR
Transformation process. We look forward to your feedback and to engage with you further.
Shelly Singh
Co-founder & EVP
PeopleStrong
Foreword
5. 4
Enabling HR Transformation | HRO Handbook Volume 2
Section 1
HR Outsourcing 3.0 -
Technology Enabling HR
Transformation
The last decade has seen economic volatility the world
over. Parallel to this crisis has been the rise and rise of
business process outsourcing (BPO), including human
resource outsourcing (HRO). Whether fuelled by
recession alone or enabled by technology, outsourcing
is here to stay as companies continue to find ways to do
more with less.
In the last decade that HRO has been in existence, it has
evolved rapidly. Starting from just payroll outsourcing,
it has evolved to more complex, multi-process functions
that touch numerous areas within a company. Whether
thedriverforHROwascostsavings,talentmanagement,
to provide strategic inputs towards the overall business,
or achieve transformation in the HR function, it has
resulted in a sea-change in how companies operate and
view the HR function. Looking back today, it is clear
that HRO has resulted in transforming the function by
enabling HR leaders to delegate routine transactional
and operational activities to HRO vendors, and focus
on aligning to business goals and providing value in the
boardroom.
The two factors underpinning HRO are process re-
engineering and technology, both of which have
matured alongside the evolution of the HR Outsourcing
industry. It is the latter space of technology though
that will shape and define HRO in the coming years.
With increasing consumerization of IT, access to
technology is possible for everyone from the entry-
level employee and manager upwards. With employee
self service, help desks and faster turn around times,
the employee experience underwent a complete change
and facilitated HR leaders and managers to spend more
time on talent management and development, and HR
leaders on strategy.
That was the past. The future will open up a whole new
dimension for HR citizens!
HR Outsourcing 3.0
The HR blogosphere and the twitterati around the
world are buzzing with excitement about the newest
technologiesandtheirimplicationsforHR.SOCOMO+
is what seems to be defining the HR technology space
and what that means is that the future of HR is Social,
Mobile, in the Cloud, Employee-Centric, Gamified and
a Data Rich environment! Will all of this be possible?
Is it just a fad? How many HR managers use their
smart phones and / or tablets for social networking,
recruiting, human capital management and games?
Thesearethequestionswillneedtobedebatednow.
With the boom in SOCOMO technologies, it is now
possible to get access on the go, anywhere, anytime.
These developments have given impetus to the niche
field of HR technology, so much so that there are now
6. 5
dimension. With increasingly sophisticated tools to capture
and analyse relevant HR data, it is possible for all HR
stakeholders (employees, managers, leaders and vendors) to
get access to a centralised pool, have their own individual
access and make decisions accordingly. All this from the
convenience of one’s own phone or tablet!
dedicated conferences the world over focussing on the
subject. Why an HR technology conference, you ask?
That is so niche! But such conferences have become one
of the ‘must attend’ events in the world of HR because
it offers us a window into the future and looks at how
they will impact bottom line of companies.
Add to this environment a component of Big Data
and you have another layer to this above mentioned
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Enabling HR Transformation | HRO Handbook Volume 2
As the year 2012 comes to an end, there is already a
huge movement towards Cloud with other future-
shaping trends being Social Media and Big Data.
Opportunities in Big Data are immense and there
is much that remains to be explored in the areas.
Companies in marketing, retail and healthcare are
already using Big Data to predict customer behavior for
business effectiveness. The buzz has made companies,
across industry types, realize that it will not be possible
to maintain a competitive edge in the market just based
on individual gut feel and that insights from a diverse
dataset will be a valuable asset in decision making in
the long run.
Big Data is going to impact HR as never before and
is changing the way the function is working from
purely system based to a more output and employee
driven platform. As a result, a large amount of HR data
resides in multiple layers and systems with low or no
integration. Some distinct data pools that exist in the
HR domain today with little overlap and low integration
are given in Figure 1.
This data is huge and is constantly increasing. Making
sense out of this data is a challenge and an opportunity
as well. For HR to truly play a significant role in
Business, it is important to move from measuring
Efficiency (with a focus on cost) to Effectiveness (of HR
Figure 1: Data Pools - Opportunity in HR Big Data
Section 2
Demystifying Big Data
8. 7
on competence, motivation and attitude of workforce)
to Impact (on Business Performance). This is where Big
Data processing and analytics comes to our rescue.
What is Big Data?
It is already being said that Web 3.0 is all about Big
Data. Wikipedia defines Big Data as:
“... a term applied to data sets whose size is beyond
the ability of commonly used software tools to capture,
manage, and process the data within a tolerable
elapsed time. Big data sizes are a constantly moving
target currently ranging from a few dozen terabytes to
many petabytes of data in a single data set.”
Big Data processing and analytics have a very
important role to play wherever a huge amount of data
is being captured, e.g. Internet search, social networks,
web logs, call logs, mobile access logs, ecommerce, etc.
See Figure 2.
There are many techniques that draw on disciplines
such as statistics and computer science algorithms that
can be used to analyze datasets. Some of the techniques
are Predictive Modelling, Time Series Analysis,
Simulation, Statistics, Regression, Pattern Recognition,
Cluster analysis, Crowd- sourcing, and Data mining.
How Big Data can be useful in HR and
Recruitment?
HR is still at a basic level of understanding as to what
Big Data can do for business. A large chunk of Big
Data is human capital data and this can be leveraged
in a number of ways for Talent Acquisition and
Management. For example:
»» Demand (Jobs) and Supply (Candidates)
information drilling down to pin-code level
categorized by Industry, Functional Area, Years of
Experience and other demographics.
»» A consolidated profile of Candidate with data
aggregated from his/her resume and multiple social
media platforms
Figure 2: Estimated rate of data generation the world over. Source:CRISIL Global Research & Analytics (GR&A)
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Enabling HR Transformation | HRO Handbook Volume 2
Step 1
Measuring transactions such as Recruitment, On-
boarding, Payroll, Exit, etc.
Step 2
Identification of Metrics that are important for your
Business
Step 3
Benchmarking with others in the Industry
Step 4
Understanding past behaviour and outcomes
Step 5
Predicting future likelihoods
»» Manning/Staffing ratios in relation to business
forecast numbers.
»» Identifying the right fit for your organization by
creating a positive profiling of a candidate. Clearly
establishing the link between the positive profile
(quality of hire) with the overall productivity
»» Variable pay analysis for establishing productivity
and attrition
»» Utilization with respect to Employee
Demographics, Leave and Time processes.
Where do we begin?
While Big Data may look overwhelming, it can be
utilized and mined in a planned and systematic manner
as mentioned in Figure 3. To really create Business
Impact, these must be included in your Big Data
Roadmap.
The infrastructure required to do the data churning
is huge. So, it is recommended to move from an on-
premise setup to a scalable, Cloud-based platform that
can securely access your company’s data and is able
to aggregate the same with other data sources such as
social media platforms.
Figure 3: Implementing Big Data in an Organization
10. 9
About the Client
Theclientisafinancialservicescompany,part
ofagroupofsevenbusinesses,andoneof
India’sfirstmultinationalcorporations.Today,
theGroup’sfootprintextendsto36countries
andthemulti-billionDollarcompanyhasa
geographicalspanacross1200locations
inIndia.
Section 3
Case Study
Leading Financial Services Company
Realizes Business Value in Total HR
Outsourcing
Problem Statement/Business Needs
The client’s expectations from the outsourced partner
were an integrated strategic service delivery framework
and re-engineered processes leading to enhancement
of productivity. In terms of the outcome, the client
expected cost benefits, reduction / elimination of non
value-added activities, optimum resource utilization,
continuous value creation and improvement.
Key Solution Elements
The implementation was structured around creating
a process framework, governance mechanism, quality
audits and facilitating change management. The HR
Shared Services model once implemented had a
dedicated employee service and transaction centre
and provided an integrated cock-pit view of all HR
transactions. The project aim was to maintain or
improve current levels of performance, while leveraging
future growth within the company (with associated
performance improvements and cost savings) was an
important driver behind the engagement.
The underlying aim was to improve performance by
designing solutions that improved performance levels.
A key component in this was technology integration
through HRIS (a SAAS based application), a Case
Management Tool and a Contact Center (aspect bases).
Enhanced cost effectiveness was brought about
through the creation of an offshore HR Shared Services
center at Gurgaon, re-sizing of HR-operational model
(re-designing the ‘to-be’ processes), rationalization
of HR business process, reduction in complexity,
focus on lean processes saving cost and time.
Focus on design and implementation activities like
Process, Technology, and People, led to smooth
change management, thereby making it a success.
The framework of the relationship is detailed in
Figure 4.
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Enabling HR Transformation | HRO Handbook Volume 2
Performance:
»» Overall average query resolution time is 185 mins
(3 hours), improved from the old average of 15
hours
»» Level 2 queries currently resolved in 11.5 hrs,
improved from an average of 29 hrs before the
relationship
Long Term Impact
The client is now able to integrate existing processes and
activities under one service umbrella. Standardization
of processes has freed up time for HR Generalists and
Centers of Excellence (CoEs) as they are relieved of
administrative work. They now focus on helping the
business shift from the staff room to the board room.
Employees now experience faster responses from
HR and are able to get all queries resolved through a
single point of contact thereby creating a delightful
experience.
Figure 4: Solution Framework for Client
Key Results
The results of the model exceeded client expectations
withsignificantcostsavings.Servicing15,000employees
(over 700 branches across India for 7 business units)
with the same quality and consistency became the
norm. 93% of queries related to policy, benefits, payroll
and statutory compliance were resolved by the end of
every month.
Cost:
»» Release of 72 man months of HR productivity from
transactional work
Query Volume:
»» Over 200,000 unique queries handled for employees
from September 2009 with an average of approx.
500 unique queries per day
»» Over 180,000 calls received with an average 400
employees calling everyday at the contact center
»» Servicing 15,000 employees in over 700 branches
across India for six Business Units under the Group
Effectiveness:
»» Adoption: 72% across the group with over 80% for
one Business Unit
»» Average handling time of queries is 7 minutes
12. 11
Section 4
HR Shared Services
HR Shared Services is an enabler in HR
Transformation. It has evolved with an idea to
transition the more administrative role of HR into
the administrative specialist function, also known as
Shared Services, so as to create capacity for other roles
within HR to deliver more strategic benefit. The aim
of an HRSS model is to reduce cost, increase quality,
and drive efficiency and effectiveness. Organizations
that opt for Shared Services often keep a small HR team
at the corporate level to focus on high-level strategy,
governance, and policy. It is believed that by doing
so, companies will be able to maintain best practices,
monitor delivery, be more sensitive to customer needs,
and generally reposition HR as more strategic and be
less encumbered by administrative tasks.
HR Shared Services is a relatively new form of HR
delivery that has experienced considerable popularity
among large firms with multiple sites across the country
and multinational corporations. The four strategic
reasons for the evolution and setting up of HR Shared
Services could be described as:
»» To be part of a wider business change introducing
the concept of professional or functional services
»» To achieve a greater degree of structural flexibility
to respond to business change
»» To improve organizational learning across
organizational boundaries
»» To allow HR to reposition itself as more strategic; to
reduce involvement in administrative trivia.
The expectation outcome from outsourcing of
transactional HR activities to a HRSS centre can be
bucketed in three parts and is illustrated in Figure 5.
Process standardization and centralization
By centralizing the delivery of the administrative
aspects of the HR function, senior HR professionals
can concentrate on providing strategic input to the
organization. Centralized accountability does not
necessarily mean physical centralization. Shared
Services can be totally decentralized in physical terms
as long as the accountability or reporting is centralized.
A Shared Services organization must be clear about
what it is responsible to deliver. The scope of delivery
must be expressed, or at least be able to be expressed,
as delivered outcomes. There is an involvement of
multiple parties in delivering outcomes, but there is a
clear understanding of who does what in the process.
Firstly, it helps the organization increase its creditability
and image by associating with a superior vendor.
It also helps the organization obtain expertise on
HR transactions, skills and technology that would
not otherwise be available. Besides this, the overall
governance model helps improve risk management,
improve operating performance and have superior
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Enabling HR Transformation | HRO Handbook Volume 2
control on processes with on time delivery commitment
every time. Outsourcing to a superior vendor helps
accelerate expansion by tapping into the provider’s
developed capacity, processes and system and also gain
market access and new business opportunities through
the provider’s network.
Financial benefit
The biggest advantage is to free up theft investments
in assets – People, Infrastructure and Technology –
and use these resources for other purposes. Secondly,
generate cash by transferring assets to the provider.
Moreover, through superior provider performance and
lower cost structure, the opportunity to turn fixed cost
into variable cost definitely increases.
Figure 5: The value proposition of an HR Shared Service model over time.
Increased employee satisfaction
The benefit from an employee perspective can be
visualized and assessed in two ways:
»» Increased satisfaction through the service provider’s
SLA driven query resolution process, on time
delivery of requests made and structured way
of dealing with day-to-day transactions/queries
in the employee’s life cycle. User friendly tools/
applications help employees reach out to HR
anytime, anywhere – which increases flexibility in
all cadres.
»» For internal HR team: Frees up the bandwidth and
provides the opportunity of a stronger career path,
and also increases the commitment and energy in
non-core areas.
14. 13
Section 5
Industry Views from
AIMA’s First National HR
Shared Services Summit
Summary of the Sessions
Session I: The Looking Glass: Deep Dive into
foundation for HR Transformation
This session highlighted the need and the emergence
of the HR Shared Services model. The session revolved
around the impact of HR on business agenda, and
trends in the HR space across countries and industries,
problem definition in a corporate context, and HRSS
models as solutions.
Session Chair Mr N.S. Rajan, Partner & Global Leader
People & Organization, Ernst & Young
Speakers
»» Mr Rohail A Khan, Global Group President HR
Outsourcing Solutions & IT, Xerox HR Solutions
»» Mr Pankaj Bansal, Summit Director & Co-Founder
& CEO, People Strong HR Services
Session II: Trends & Key Drivers
This session highlighted trends in the HRSS space and
the key drivers that led to its emergence and success in
both developing and developed countries. The pros and
cons of adopting an HRSS model were discussed along
with measures to mitigate risk. Further the session
focused on typical activities in an HRSS center and the
basic requirements needed to successfully implement a
Shared Services model.
Session Chair Mr S Varadarajan, EVP-HR, Tata
Teleservices
Speakers
»» Mr Rajesh Ranjan, Vice President, Everest Group
»» Mr Harish Devarajan, Leadership Coach &
Organisation Consultant, People Unlimited
»» Mr AVK Mohan, Global Head- HR, Exl Services
Session III: Partnership & Change Management
The discussion focused on the importance of choosing
the right partner in bringing about HR Transformation
through HRSS. Apart from focusing on the key criteria
for identifying and maintaining partnerships in the
space, the session addressed change management at
both the individual and organizational level.
Session Chair Mr Faisal Sayed, HR, Religare
Speakers
»» Ms Shelly Singh, Co-founder & EVP, People Strong
HR Services
»» Ms Deepa Chadha, Vice President HR Shared
Services, Bharti Airtel Limited
Session IV: Strategic Solutions: Technology and
Innovation
This session focussed on the role of technology and
analytics as a key enabler for a HR Shared Services
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Enabling HR Transformation | HRO Handbook Volume 2
model. The scale at which organizations are operating
requires extensive usage of technology. Analytics helps
to measure the metrics defined and the impact on
business. The session spotlight was on innovations in
the technology and analytics space and future directions.
Session Chair Dr Jitendra K Das, Director, FORE
School of Management
Speakers
»» Mr Manish Choudhary, Managing Director, Pitney
Bowes Software
»» Mr Rajendra Ghag, Executive Vice President – HR,
HDFC Standard Life Insurance
»» Mr Ranjan Sinha, CEO, Global Talent Metrics
»» Dr A K Chawla, Head- HR North, Tata
Consultancy Services
Summit highlights
»» Buying propensities in HRSS are shifting from galactic deals to niche partnerships around payroll, helpdesk, etc.
»» There is an increasing focus on outcome based value proposition and the future lies in attaining business agility,
enabled by technology, service delivery, innovation and outcome orientation.
»» Technology is playing a greater role than ever before in enabling HR organizations to move from personnel
management to business execution. There is more focus on relevant information, better outcomes, smarter
decisions and actionable insights anytime, anywhere, at any event, on any device and in any country.
»» Employee engagement has seen a paradigm shift with greater emphasis on creating a dialogue using predictive
analytics, motivating actions through persuasive technologies and in general a dynamic approach using
gamification and rich media
Session V: Impact of HRSSC
This session focussed on the impact that the
implementation of an HRSS model can have on
businesses and subsequent benefits of a centralized HR
platform. The session also highlighted the importance
of continuous learning in the Shared Services model.
Session Chair Mr Pankaj Bansal, CEO and Co-founder,
PeopleStrong HR Services
Speakers
»» Mr Gautam Chainani, Chief People Officer, Aditya
Birla Financial Services
»» Mr Sameer Khanna, Head HR, Jones Lang LaSalle,
India
16. 15
Session Chair
The role of HR in any organization can be divided into 3 categories - Strategic, Tactical and
Transactional. This demarcation is the base for evolution of an HR Shared Services Center.
HR professionals are typically reluctant to let go of control while the HRSS model endeavours
to enable this. Organizations must look at creating wealth by enriching employees in their
own roles, which will in turn strengthen the performance of the function itself.
N.S. Rajan
Partner & Global Leader - People & Organization,
Ernst & Young
Speakers
HRSS is the way forward for structured change in organizations. Earlier, HR was viewed as
simply a transactional and not a strategic function. All this has changed with technology
impacting HR service delivery, and thus outcomes and the bottom-line of a business to
create a win-win solution for all stakeholders.
Rohail A Khan
Global Group President HR Outsourcing Solutions & IT,
Xerox HR Solutions
HRSS is very industry agnostic, though the scale of operations is still a criterion. Expectations
on learning and career growth are more elaborate in India than the rest of the world. The
ability to make better decisions around retirement and healthcare will have direct impact
on the bottom-line. Shared services model unlocks time for such activities along with world
class delivery. Process consistency, quality and effectiveness are ensured.
Pankaj Bansal
Summit Director and Co-Founder & CEO,
PeopleStrong HR Services
Session I
The Looking Glass: Deep Dive into
Foundation for HR
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Enabling HR Transformation | HRO Handbook Volume 2
The HR Shared Service Model
The global economy is becoming increasingly volatile
and given this, companies are pushing for greater
efficiency and ROI from every function, including
the Human Resources division. The role of Human
Resources in any organization can be divided into three
categories - Strategic, Tactical and Transactional (for
details see Figure 6). The challenge facing HR is to re-
invent itself at all three levels and this is the entry point
for HR Shared Services.
HRSS is the way forward for structured change in
organizations. Earlier, HR was viewed simply as a
transactional and not a strategic function. All this
has changed with technology impacting HR service
delivery and outcomes, thus impacting the bottomline
of a business and creating a win-win solution for all
stakeholders.
Trends in HR Shared Services
With the growing size and scale of organizations,
there are a lot of pressures on the HR division of an
organization like effective and efficient delivery of HR
outcomes through centralization and consolidation.
Most HR executives now realize that their current
service delivery model is not sustainable into the near
future,andthatdeploymentofanewmodelisnecessary.
This gave rise to the evolution of a Shared Services
model. The services and processes that were earlier
performed by multiple entities are provided by a single
organization and, as such, that HRSS provider becomes
an internal service provider. The entity leverages
economies of scale, scope and place; has established
service levels and prices its services in alignment with
those service levels; is highly focused on customers
(one access point for all delivered services); has robust
metrics; and is focused on process standardization
and best practice deployment. In short, it is run like
a business and takes the concept of consolidation to
the next level with a more sophisticated and robust
service delivery model. In the last few years, the HRSS
model has become more mature and some increasingly
common trends in the space are as seen below.
Trend 1: The Shift in HRSS Deals
Buying propensities in HRSS are shifting from galactic
deals to niche partnerships around payroll, helpdesk,
etc. Initially, in the first phase of outsourcing, large
conglomerates went ahead with total HR Outsourcing
but failed to effectively implement the model due to
the huge size and scale of the deals. In the recent years
though, the size of each deal is decreasing but the
overall value of the deals is increasing as seen in Figure
7. The average value per deal per annum is decreasing
over the years, but the Shared Services industry has
grown tremendously.
Figure 6: The HR Shared Services Model
18. 17
Figure 7: Trend of the Average Annual Contact Value of new Shared Services deals over the years
Figure 8: The shift in the value proposition of the Shared Services model over time
Trend 2: The Future of HRSS – Transforming HR and
Achieving Business Agility
There is an increasing focus on outcome based value
proposition. Organizations have traditionally focused
on the movement from operational efficiency to process
efficiency. But the future lies in attaining business
agility, which will be enabled by technology, service
delivery, innovation and outcome orientation as seen
in Figure 8. This will enable HR to facilitate achieving
business goals.
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Enabling HR Transformation | HRO Handbook Volume 2
The above qualities could be a result from a successful
adoption of an HRSS model. HRSS is a means to the
end and not the end in itself. Organizations need to
figure out their desired outcomes first and then decide
if HRSS is the correct means to achieve it.
Trend 3: Technology and Innovation
Technology has and continues to play a pivotal role in
enabling HR organizations to move from personnel
management to business execution. The widespread
adoption of personal computers made it possible for
HR organizations to utilize more sophisticated talent
managementtechniquestosupportkeytalentdecisions,
for example, using computer-based tools and forms
for evaluating employee performance and assessing
job candidates. Greater access to data enabled HR to
shift from focusing on specific employee decisions to
aligning talent management processes. No longer was
HR limited to being a series of isolated silos focusing
on staffing, training, compensation and succession.
Now HR could function as a set of integrated talent
management processes designed to ensure a steady
supply of high performing talent in critical job roles.
Emphasis on usability and pace of innovation is
increasing. There is great focus on relevant information,
better outcome, smarter decisions and actionable
insights anytime, anywhere, at any event, on any device
and in any country (see Figure 9).
Figure 9: Future trends in technology
Trend 4: Models of Employee Engagement
In relation to employees and employee engagement,
there has been a significant paradigm shift. Table 1
illustrates the key changes with respect to employees
and engagement activities as a result of the HRSS model
implementation.
Employee engagement has become key to the success of
any organization, whether it is done through persuasive
computing (behavioural economics, contextual
targeting), predictive analysis (interests, topics,
patterns), ethnography (behaviours and attitudes) or
social media/ gamification (relationship influencers,
fun factor).
The HR Shared Services model is extremely adaptable
acrossindustrytype,thoughacertainscaleofoperations
is a key requirement. In essence, there are mainly three
types of HR costs – labour cost, labour health care cost
and pension cost. The ability to make better decisions
around retirement and healthcare will directly impact
the bottom-line. What a Shared Services model does is
unlock time for such activities along with world class
HR service delivery and process consistency, wherein
quality and effectiveness are also ensured. However, HR
has a core human element that must not be forgotten
and professionals need to use their judgement to
consider what requires a personal touch and what does
not. Outcome orientation will enable better adoption of
the HRSS model and move HR professionals from the
role of an HR Business Partner to an HR Enabler.
20. 19
Table 1: Changing trends in how employees are viewed and engaged in the HRSS paradigm
Old Model
»» Accommodate them
»» Focus on the transaction
»» Hit them periodically through
the year
»» Wait for them to do something
»» The portal will cover what
they need
»» Static online experience
»» One size fits all
New Model
»» Engage them
»» Focus on the outcome
»» Create a dialogue using predictive
analytics
»» Motivate actions through
persuasive technologies
»» Right media at right time with
contextual targeting
»» Dynamic approach using
gamification
»» Customized and targeted based
on preferences
Rationale
»» Engagement = Behavior
Change
»» Outcomes drive savings
»» Continuously influence
behaviors
»» If we don’t encourage, they
won’t act
»» People engage through
different channels
»» Experience needs to be sticky
and engaging
»» People have unique motivators
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Enabling HR Transformation | HRO Handbook Volume 2
Session Chair
HR professionals are often faced with a difficult scenario - on the one hand, the organization and
management require HR to increase productivity and output and on the other, employees want HR
to enhance the working environment and incentives. It is up to the HR division to be able to find a
balance and yet address these different but important demands.
S. Varadarajan
EVP-HR,
Tata Teleservices
Speakers
Some of the drivers to the adoption of the HRSSC model are cost reduction, process excellence,
standardization, access to technology, access to expertise, ability to focus on core business, resulting in
competitive advantage. A hybrid model, i.e. a combination of in-house operations and outsourcing is
the best-fit for most companies. HRSS helps an organization achieve both economies of scale and skill.
Rajesh Ranjan
Vice President,
Everest Group
The need for HRSS emerged due to inefficient HR departments, transaction overload, time and
space constraints for employees, need for focus on employee engagement and development, need to
empower line managers and other business imperatives. The benefits of an HRSS model are quality,
cost and time savings, state-of-the-art technology (such as Employee Self-Service), credible HR data
and focus on career development opportunities.
Harish Devarajan
Leadership Coach & Organisation
Consultant, People Unlimited
There is a lot of imbalance between various stakeholders. Shareholders want more and more,
customers want more for less, employees ask what more, and the government wants more
for nothing. In such a scenario, the drivers for change are increased globalization, enhanced
individualization, imperatives of inclusion, relentless technological advancement, and global
mobility of talent. All of these are, to a large extent, taken care of by the HRSS Model.
AVK Mohan
Global Head- HR,
EXL Services
Session II
Trends and Key Drivers
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enabled models are leading to more standardised
platforms which allow for a personalised employee
experience.
Why Outsource
The benefits of an HRSS model are quality, cost savings,
time saving, state-of-the-art technology and Employee
Self-Service, credible HR data and focus on career
development opportunities. However, despite this HR
Managers are called upon to build a business case for
outsourcing. Some pros and cons of outsourcing vs. in-
house operations are:
What to keep in mind when setting up an
HRSS center:
»» Do not exaggerate the business case
Trends and Drivers of HR Shared
Services
HRprofessionalsareoftenfacedwithadifficultscenario.
On the one hand, the company and management
require HR to increase productivity and output and
on the other hand, employees want HR to enhance
working environment and incentives.
Apart from the push and pull factors at play in the
workplace, the other drivers in the adoption of the
HRSS model are cost reduction, process excellence,
standardization, access to technology, access to
expertise, ability to focus on core business resulting
in competitive advantage. Adoption of HRSS helps
in shifting costs from capital expenses to operational
expenses.Further,thecostofservicedeliveryisreduced,
thereby reducing total cost along with increasing
effectiveness. A hybrid model, i.e. a combination of
in-house operations and outsourcing is the best-fit
for most companies. HRSS helps an organization to
achieve both economies of scale and skill.
The traditional sourcing model debate of whether all in-
house vs. all outsourced, is increasingly being expanded
to include hybrid and/or multiple best of breed provider
options. HRSS models are becoming broader, deeper
and sophisticated as seen in Figure 10. Technology
Outsourcing
»» Economies of scale
»» Institutionalization and
standardization
»» Efficiency of technology
»» Professional Service
»» High initial investment
In-house
»» Flexibility
»» Low investment options
»» Addresses constraints
»» Adopt technology as
appropriate
»» Burden of career
development continues
Figure 10: Key Trends in HR Shared Services
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Enabling HR Transformation | HRO Handbook Volume 2
»» Set realistic expectations
»» Define/insist on the requirement upfront
»» Process mapping/ modification is critical
»» Data integrity must be fundamental
How to make an HRSS project successful
»» Adoption of the State-of-the-Art approach to
ensure effectiveness and efficiency
»» Responsibility vs. Accountability mapping
»» Clear and defined Review
»» Analysis
»» Troubleshooting process
»» Live the change: The entire organization needs to
believe in the change and integrate themselves with
the new model and new ways of working.
Following are the key trends highlighted in the
Session.
Trend 1: HRSS Evolution in Developed vs.
Developing Markets.
The way HRSS has grown in developed markets is quite
different than that of developing economies. The HRSS
trend comparison between the developed markets and
India can be seen in Figure 11.
Trend 2: Talent Management and related core
functions are now outsourced
Earlier only transactional activities were outsourced
but now even talent management activities such
as Learning, Recruitment and Performance
Management Systems are considered within the
scope of HRSS. Transaction-intensive processes
are core but talent management components are
increasingly considered as well. This is illustrated in
Figure 12.
Trend 3: Drivers for HR Shared Services are
changing
Organizations are increasingly looking for a cost +
value strategy where cost reduction is important but
not the only driver. As seen in the Figure 13, value or
process excellence is clearly almost as critical for most
current or prospective users of HRSS.
Figure 11: HRSS Evolution in Developed vs. Developing Markets
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Figure 12: Trend showing the increasing focus on Talent Management activities to be a part of HRSS model
Figure 13: Percentage importance of each of the key drivers for HR Shared Services
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Enabling HR Transformation | HRO Handbook Volume 2
Trend 4: Technology as a game changer
Technology advancements over the years are creating
newer options to reduce total cost yet increase
effectiveness as seen in Figure 14. Technology reduces
human effort and time invested on mechanical and
repetitive jobs, thereby saving time and increasing
productivity. This in turn reduces the overall cost for
the organization.
Figure 14: Changing Technology platforms for HR Management Systems over the years. Source: Everest Group (2011)
Advancements in technology also lead to:
»» Greater integration of HRMS, case management,
knowledge management, and portals
»» Interactive and intuitive interfaces/tools enable
greater level of self-service
»» Analytics tools help in better decision making
»» Mobile apps provide greater flexibility
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Session Chair
Significant operating and financial performance improvements are critical to success and long term
survival of an organization. With a trusted partner as a provider, scaling within the same resource
pool, reduced costs and greater margins is a big possibility, which otherwise would be too steep a task.
Faisal Saiyed
EVP-HR,
Religare Enterprises Ltd.
Speakers
To maintain a healthy relationship between partners, organizations must follow a governance charter.
The reasons behind a robust governance mechanism are to (a) define the governance relationship
betweenthepartners,(b)influencehowlongtermcommonobjectivesaremet, (c)ensureperformance
is optimized and success is measured (d) set responsibility and accountability framework, and (e) to
specify best practice governance framework that identifies outcome, addresses timely renewal and
continuous improvement of governance practices.
Shelly Singh
Co-founder & EVP,
PeopleStrong HR Services
In the adoption of an HRSS model, it is extremely critical to have the right partnership. Some of the
key areas to look out for are common values and interests, shared responsibilities and accountabilities,
equal decision making rights and a healthy learning culture.
Deepa Chadha
Vice President HR Shared Services,
Bharti Airtel Limited
Session III
Partnership and
Change Management
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Enabling HR Transformation | HRO Handbook Volume 2
Identifying a Strong Partner: The Airtel
Outsourcing Experience
Bharti Airtel Limited is a leading integrated
telecommunications company with operations in 20
countries across Asia and Africa. Headquartered in
New Delhi, India, the company ranks amongst the
top five mobile service providers globally in terms of
subscribers. When Airtel decided to adopt the HRSS
model, it realised the critical importance in identifying
the right partner. The checklist to identify a good
partner:
»» Share same values and interests
»» Share risk, responsibility & accountability
»» Equal decision making rights
»» Learning culture is fostered
On the basis of this trusted partnership, Airtel has
outsourcedanumberofitsHRactivitiestoaSharedService
centre. The scope of activities are seen in Figure 15.
Governance Model
In implementing an HR Shared Services model, it is
important to understand the core elements of HR and
how these have evolved. HR has had an emotional
connect with people and employees always had a
hard coded touch-point. With the rise of HRSS and
outsourcing, it was natural for internal HR to pose
questions such as, “What happens to my role?”, and
“Where is the time to do all this?”
In order for the outsourced partnership to be a success,
there are some requirements at the individual employee
level as well as at the organizational level. A change at
the individual level requires:
»» Dedicated Program Manager at tactical level
»» Performance based linkage to success of the project
at both ends
»» Program Management team is cross functional
A change at the organizational level requires a
governance charter that can be seen in Figure 16.
Figure 15: Airtel’s scope of activities in HRSS
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The Governance Model de-constructed
A formal Governance Model helps to:
»» Establish a three-level relationship model
»» Provides a forum for continuous dialog on strategic
planning and execution
»» Management commits a minimum percentage of
their time to this initiative
»» Co-accountability for success and failures
Thereasonbehindsucharobustgovernancemechanism
is to:
»» Define the governance relationship between
PeopleStrong and Client
»» Influence how long term common objectives are
met, performance is optimized and success is
measured.
»» Set responsibility and accountability framework
»» Specify best practice governance framework
that identifies the outcome, timely renewal and
continuous improvement of governance practices.
Figure 16: HRSS Governance Model
The roles and responsibilities of each stakeholder can
also be defined as:
»» Sponsor / Steering Committee: To ensure (a) value
creation for mutual benefit, and (b) Transforming
the overall HR delivery experience
»» Strategic Review: Strategic interventions viz.
people, technology, process workflows and
communication to translate expectations into
superior and consistent delivery
»» Tactical Review: Trend analysis, escalations review
– identify course correction opportunities. Closely
monitor change
»» Operational Review: SLA performance, process
deviations, issue log tracking, addressing routine
operational issues.
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Enabling HR Transformation | HRO Handbook Volume 2
Session Chair
HRSS’ popularity as a model can be attributed to stiff competition in the marketplace to a certain extent.
The HRSS model is very powerful because cost cutting is a primary driver in bringing in efficiency.
Research shows that HRSS costs can come down by almost 10-20%. This can happen in two domains
– by hiring fewer employees per output and hiring less HR employees for internal service delivery.
Dr Jitendra K Das
Director,
FORE School of Management
Speakers
Analytics help to measure the impact of HR initiatives and operations. In fact, analytics can help
predict outcomes to enable future planning. Looking to the future, we need to devise methods to be
able to measure intangible relationships such as - How diversity and inclusion impacts shareholder
value. We need to device analytics to a level where even qualitative metrics can be measured.
Manish Choudhary
Managing Director,
Pitney Bowes Software
In the light of today’s scenario, there is no other option apart from outsourcing or creating an HR
Shared Services Centre. Though HRSS is not a ‘one size fits all’ option, technology and analytics have
a huge impact on businesses. However, before taking a call on the HRSS model, the context and the
business need must be kept in mind.
Rajendra Ghag
Executive Vice President – HR,
HDFC Standard Life Insurance
Technologyisadrivertorunbusinessoperationsefficiently.Thefocusshouldbeinitiallyoninnovation
and then process innovation which will lead to operational efficiency through technology. Social
hiring is one such innovation. While adopting a technology, companies must ensure that strategy
needs to drive technology and not the other way round.
Ranjan Sinha
CEO,
Global Talent Metrics
Technology plays a great role when it comes to hiring. With technology, the hiring cost has reduced
hence positively affecting both the lines. Analytics helps to link the actions that the management takes
to the impact that has on the business, for e.g., how higher incentive disbursement leads to lower
attrition can be answered using analytics.
Dr. A K Chawla
Head- HR North,
Tata Consultancy Services
Session IV
Strategic Solutions - Technology & Analytics
30. 29
Technology is a driver to run business operations
efficiently. Social hiring is one such innovation. While
adopting a technology, companies must ensure that
strategy needs to drive technology and not the other
way round. The rush to start using tools should not
outweigh the need to formulate a social media strategy.
The aim of HR is to reduce the cost and enhance the
quality of employees. Technology and analytics play an
important role measuring both the means as well as the
outcomes. In fact, analytics can help predict outcomes
to enable future planning.
Case Study
Tata Consultancy Services
Hiring at levels of 40,000-60,000 employees per year is extremely difficult without technology as an enabler.
But today Tata Consultancy Services has around 2,50,000 employees and hiring at this scale is impossible
without technology. At TCS, everything except interviews is automated on the internal technology portal in
the recruitment and on-boarding domain. Hiring of each and every person adds to both the top line and the
bottom-line and with technology, the hiring cost has reduced thus positively affecting both the lines.
Apart from recruitment, competency development is another equally important activity. Therefore, training
modules and Performance Management Systems are also available on the TCS technology portal. Analytics
helps to link actions the management takes with impact on business, for e.g., analytics can be used to gauge
the extent to which a higher incentive disbursement leads to lower attrition.
Looking to the future, we need to devise methods to be
able to measure intangible relationships such as ‘how
diversity and inclusion impacts shareholder value’.
We need to device analytics to a level where even
qualitative metrics can be measured.
A clear understanding of how the service provider’s
technology and analytics will help is extremely
important. Partnership with the provider is essential.
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Enabling HR Transformation | HRO Handbook Volume 2
Session Chair
Fundamentally, the expectations from HR outsourcing can be bucketed in three parts - Process
Excellence, Financial Benefit and Increased Employee Satisfaction. The HRSS framework provides
them to an organization along with cutting edge technology and a centralized knowledge pool. It
is the convergence of technology, knowledge pool, process expertise, and operational predictability,
which provides the organization with a superlative HR Shared Services experience.
Pankaj Bansal
CEO and Co-founder
PeopleStrong HR Services
Speakers
The cumulative impact of HR Transformation will be to fundamentally redefine the time, cost
and value-add of HR organizations. A Shared Services model is used to reposition HR Business
Partners and their aim to become more strategic and less administrative. This only happens when
HR Administration becomes more efficient, cost effective and processes and delivery methods to the
business are standardized. This is greatly enabled by an HRSS model.
Gautam Chainani
Chief People Officer
Aditya Birla Financial Services
The real value of an HRSS model is seen through improved accuracy, sustainable systems and
processes, more efficient integrated systems landscape reducing manual re-work and lower risk of
data protection breach, with a single, secure solution for all staff information. In order to gauge the
impact of a Shared Services Centre (SSC), an organization must not forget the motive of an HRSSC
and the means of measuring it.
Sameer Khanna
Head HR,
Jones Lang LaSalle India
Session V
Impact
32. 31
The true value of HRSS
HRSS provides companies benefits such as creating a
central knowledge base, policies and processes, from
which standardized, automated transaction processing
can be achieved, and a single Human Capital
Management software platform. Typical services
that are included as part of HR Shared Services are
Recruitment Administration, Benefits Administration,
Employee Welfare Support, Payroll changes, Training
and Support Administration, and Information
Management. The real value from an HRSS centre is
detailed in Figure 17.
Achieving HR Transformation
In order to gauge the impact of a Shared Services Centre
(SSC), an organization must ask questions like:
Figure 18: The change in percentage time spent on various facets of HR activities after HR transformation in the form of an
HRSS model
»» Is the SSC doing what it set out to do?
»» How has moving to an SSC measured up against the
earlier way of doing HR?
»» Is the new model reducing costs and time to
process functions?
»» Are customers satisfied?
»» In general terms, how is the service doing? How
does it stack up against other companies in the
industry?
The cumulative impact of HR Transformation will be
to fundamentally redefine the time, cost and value-
add of HR organizations. A Shared Services model
is used to reposition HR Business Partners and their
aim to become more strategic and less administrative.
This only happens when HR Administration becomes
Figure 17: Co-creating value through HRSS
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Enabling HR Transformation | HRO Handbook Volume 2
Figure 19: Way Forward for HRSS
more efficient, cost effective and processes and delivery
methods to the business are standardized. This is greatly
enabled by a HRSS model as displayed in Figure 18.
Key Takeaways & Future Directions
»» Understand wider applications of Shared Services
and the necessary steps to success
»» Enable partnerships beyond organizational
boundaries
»» Identify and create flexible service models through
collaboration
»» Learn how Shared Services can enable strategic
business transformation and not merely serve as a
vehicle to control costs
»» Recognize operational challenges in establishing
partnerships
»» Learn to monitor and measure performance
through a properly executed governance platform
Way Forward for HRSSC
In line with the way ahead for HRSSC, PeopleStrong is
turning the spotlight on two key focus areas:
Strategic implementation to align with business
goals
»» Drive value-added initiatives and evaluating cost
reduction methods to stretch ROI
»» Draw the end-to-end roadmap to implement the
concept of ‘HR functions aligned to business goals’
successfully
»» Cut administrative tasks to deliver HR’s value
proposition to the rest of the business
»» Standardize processes globally to reduce errors and
deliver uniform services
»» Enhance Employee Self Service to reduce workload
and channel efforts to value-add activities
Advancing and improving HR processes, functions
and delivery by focusing on opportunities to be a
profit generating centre
»» Understand what the business sees as high value
»» Leverage technology to improve functionality &
service delivery
»» Enhance employee engagement to optimize
retention of high performers
»» Evaluate the most effective charge-back structure
»» Do more with less
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FIGURES
Figure 1: Data Pools - Opportunity in HR Big Data
Figure 2: Estimated rate of data generation the world over
Figure 3: Implementing Big Data in your organization
Figure 4: Solution framework for client
Figure 5: The value proposition of an HR Shared Service Model over time
Figure 6: The HR Shared Services Model *
Figure 7: Trend: Average Annual Contact Value of new Shared Services deals over the years *
Figure 8: Shift in the value proposition of the Shared Services Model over time *
Figure 9: Future trends in technology *
Figure 10: Key Trends in HR Shared Services *
Figure 11: HRSS evolution in developed vs. developing markets *
Figure 12: Trend showing increasing focus on Talent Management activities to be a part of HRSS model *
Figure 13: Percentage importance of each of the key drivers for HR Shared Services *
Figure 14: Changing technology platforms for HR Management Systems over the years *
Figure 15: Airtel’s scope of activities in HRSS *
Figure 16: HRSS governance model *
Figure 17: Co-creating value through HRSS *
Figure 18: The change in percentage time spent on various facets of HR activities
after HR transformation in the form of an HRSS model *
Figure 19: Way forward for HRSS *
TABLES
Table 1: Changing trends in how employees are viewed and engaged in the HRSS paradigm *
* These Figures and Tables are from Presentations made by Speakers at AIMA’s HR Shared Services: A Key Differentiator for
Transformation, August 2012
List of Figures & Tables
