Employee Engagement challenges for Start-Ups

When a service delivery organization is in the launching or in the planning phases of introducing a Shared Services Center an important question that must be addressed in a structured way is centered on "employee engagement". 

Using his vast experience in Shared Services, both in the commercial and government sectors, in Finance, Procurement and HR Management, Joseph Soalheira, Advisory Board Member SSON and Project Leader, Corporate Improvement and Innovation, in Brisbane City Council, Australia, shares with the SSON  some of the issues and answers about "employee engagement", particularly in difficult economic times.

Three critical questions need to be well thought through in the planning stages:

  1. How to best serve your internal customers with reduced delivery staff (staff is likely reduced due to economic challenges)
  2. How to gain a pulse on what your internal customers needs really are
  3. How to maintain morale and keep employees engaged when colleagues lose their jobs

The first thing that comes to mind when using the term "internal" customers, is that, in general terms, employees have difficulties in accepting that we are all "customers" to each other, that is, the principles that apply to delivering a service to an external customer, who pays real cash for a service or product, ought to apply in the same way to an "internal" customer. The fact that employees tend to have difficulties in accepting this principle is the result of long established corporate cultures based on highly hierarchical structures centered on the relationship between boss/manager/master and employee/servant.

Secondly, in most business organizations we see ourselves as colleagues and part of teams, often in silos, each team often pulling in different directions using different strategies, rather than customers to each other. If Procurement or HR provide a service to the production division, do we see this as a service or do we see this as those areas "just doing their job"? In many established corporate and government cultures, the relationship between an internal service provider and an internal customer is often marginalized or not explored in depth, especially when the need for culture change, productivity improvement, branding or standardization of processes are required to deliver efficiency dividends.

However, in the last decade or so, those organizations that have implemented SSCs, have come to realize how the shared services concept, has changed old corporate culture paradigms and proven that when well planned and implemented, the same principles used to manage the relationships with external customers apply to managing the internal customers, particularly so, in an environment where the SSC has to compete with external providers, making the organization more flexible, more competitive, and more productive as the SSC takes a more holistic view of its customer base. For the old paradigms to be transformed, it is critical that the SSC providing services to internal customers:

  1. Have a Price for their Services, that will enable the change in behaviors and attitudes, as Price places a "value" on the service provided
  2. Have an Agreement/Contract with their internal Customers, to define and deliver the services and service levels required, establish a relationship of trust, as well as the rules of engagement between provider and internal customer
  3. Have a Transparent Governance structure, to govern the business and the relationship with customers, to change the culture, and to establish performance management and accountability
  4. Have qualified Resources that are well trained to understand the value they provide to the organization, the value of their internal customers, and that excellent customer service, internally or externally, retains customers, increases cash flow and retains stable employment
  5. Uses state of the art Technologies, as enablers that support excellent customer service, increases productivity, minimizes manual and repetitive transactions and is user friendly


The biggest challenge for Shared Services is how to not become a "soft target" for reducing staff numbers particularly during these difficult economic times, without planning for the future recovery when external customers start spending again. How can organizations engage staff, in a SSC environment, to continue to deliver excellent internal service, when there is a "clear and present danger" that job reductions will continue? There is no easy answer, as the survival of the business enterprise becomes the priority number one for Shareholders, Boards, CEO’s and Management. However, opportunities for outsourcing internal services and free up cash or reduce liabilities and management/staff buy-backs may become advantageous, replacing legacy systems/technologies with more nimble and open ERP/Technology solutions that are more user friendly or returning to standard service provision, where one solution fits all, are all potential answers. Jus think of the "old" days, not that long ago, when an army of HR/Payroll officers would spend time processing/entering employee data into not so user friendly systems. Today, we have Employee Self Service (ESS) and web enabled solutions for managing employee performance or activate recruitment, that have dramatically increased productivity in the internal service provision, and reduced staff numbers in back office support functions.

Our employees are better trained and educated, and the focus on service delivery will continue, whether business organizations have more or less employees to undertake the internal support functions and deliver services. If, in times of economic downturn, the SSC has substantially less resources to deliver the services required, the Service Level Agreement must reflect the new reality and standardization of services across the organization becomes even more important and increases in productivity more critical. But, how does Management engage employees (who are also internal customers) into accepting new paradigms, particularly in hard economic and business times? How do we make sure that those who are retained continue engaged to the best of their abilities and the fear of losing their jobs does not preclude them from being more productive, and their morale remains high? This is a time for co-operative leadership, a time for CEO’s/Management to show their true Leadership qualities and show they listen to their people. After all, how many times have we heard that "… our people are our best asset". It is critical that organizations and SSC’s in particular attend to the following four steps:

  1. Plan & Measure for the Organization’s Talent: Talent attraction planning, Competency modeling, Individual & Team Assessment, and Organizational Assessment
  2. Develop a systematic approach to Succession and Leadership Development: Planning develop talent for current & future roles, Coaching & leadership development, Team development, Professional skills development & Succession management
  3. Employees who do not understand employer’s Business Strategy will not get engaged in their jobs, they become disengaged because employer’s failure to communicate their strategies: Improve Employee Communications, Employer Branding, Change Management and Performance Management
  4. Reorganizations, downsizing, separations and career transitions can be poorly managed. The remaining employees may become unhappy with their former colleagues treatment & thus become less productive: Using transition planning & professional outplacement consulting, organizations can demonstrate commitment to their remaining employees, sustain morale & manage internal perceptions

This last point is particularly important. We all know that satisfied employees create a stable, productive workforce, supporting better organizational performance and business results, and helping to optimize human capital deployment that maximizes the return on investment and assists employees to achieve their full potential.

When employees are treated with respect resistance to change and behaviors become manageable without reduced productivity, giving people hope that when the good times return their opportunities increase as well. Those that remain will accept change and find energy and encouragement to be more productive and deliver better services with less, which is one of the core Shared Services principles.

Using the Organizational Self Assessment (OSA) tool will further strengthen employee engagement and gain a pulse on internal customers needs in a way that encourages business improvement. This is a tool or strategy that uses a questionnaire and focus groups discussions to engage employees and internal customers on how to transform the SSC or the overall organization. It uses seven management categories of People, Leadership, Customer and Market Focus, Innovation Quality and Improvement, Strategy and Planning, Knowledge and Information, and Success and Sustainability. This strategy to engaging employees and customers in identifying areas for improvement and new directions for the business gains an organizational dimension that creates trust, confidence and hope for the future. Change management becomes and acceptable proposition, culture change turns into an established practice (for example, internal customers are treated same way as external customers) best practices become a driver and improved productivity the best outcome.

The OSA is a tool that forms part of the (Australian) Business Excellence Framework used by the top Australian corporations, and it also provides a benchmarking tool/framework that enables your business to be compared with these top organizations in the seven categories. In my experience of using the OAS tool for the past six years, the best outcome has been the change in employee attitudes, perceptions and culture that their ideas do matter, that management is prepared to listen and implement good ideas, and that they feel engaged in setting the new directions of the business. Above all, SSC employees feel engaged in establishing and accepting the new paradigm of internal customers, delivering more with less, and when they are treated with respect, shared services becomes the best vehicle to deliver change, increase value to the organization, improve morale, and optimize the management of back office support services.