"Next generation" HR Shared Services

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Technology-Enabled HR Shared Services: The Next Generation

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Technology-enablement leads the way – achieving high percentages for Tier Zero means you limit escalations. This is how it works. SSON interview with Kelvin Lovely, HR Shared Services and HR Service Delivery Business Process Consultant, Enwisen

Barbara Hodge: Today I’m speaking with Kelvin Lovely from Enwisen. Kelvin is a Certified Senior Professional in Human Resources - SPHR - and has over 25 years of extensive HR and Operations experience within corporate business. Kelvin’s work includes shared services for Anderson Consulting, Allstate Insurance and Accenture’s HR Services. Kelvin, thank you for joining us.

Kelvin Lovely: Well, thank you, Barbara.

BH: Kelvin, we’re going to be speaking today about transformation in HR, an enormously important topic for all of our HR readers and members of the Shared Services & Outsourcing Network. In particular, I’d like to speak about how to transform HR through a transformed HR shared services and service delivery model. Can you start off by telling us a little bit about your background? What makes you uniquely qualified to help employers going through HR transformation?

KL: Barbara, the journey to get to where we are today has been very interesting. You mentioned my 25 years of HR experience and Operations, but I started out my management career in business operations for Allstate Insurance -- so I got a unique perspective on how customer contact centres, bulk processing works and operates and then I got into HR. As an HR generalist, I’ve sat in probably in every seat within HR. I got involved in HR shared services over 16 years ago, in various capacities, so I’ve had the opportunity to design, develop and implement HR shared service centres, as well as manage internal HR shared services in outsourced HR shared service centres. When I was with Allstate I helped develop their HR shared service centre. And then, moving from Allstate to, at the time, Andersen Consulting, I ran their North American HR shared service centre. Andersen transitioned from an in-sourced operation to an out-sourced operation under the name of Accenture HR Services. So I’ve had a lot of experience with HR shared services. As a consultant, I’ve also had an opportunity to work with clients of Accenture over the years in developing HR shared service solutions, realigning HR staff, and looking at what the true value proposition was for moving to an HR shared services delivery model. With Enwisen, my role now is to assist prospective clients in developing the ROI that really reflects a hard dollar savings, by levering the HR shared service delivery model and the tools that Enwisen can bring to the table. I’m also sharing some best practices, as well as my experience and knowledge in implementing this multi-tiered model over the years.

BH: Kelvin, we’ve heard a lot about organisations moving to a new model of HR services delivery. What is this trend and what does it mean?

KL: It’s a new model for organisations that have organised their HR delivery according to the traditional method. And the traditional method is this: typically, there are HR professionals out in the field partnering with the business, and delivering services to the employee population. There are also typically centres of excellence that design and develop policy, and this new model is really being driven by the need for HR to transform itself, to align itself more closely with a need to do more and provide better service delivery, often with less budget and other resources. So, the three major things that I’ve seen driving companies to transform HR and move into this new model are really about transformation; cost; and, at the end of the day, some improvement in their capabilities as an HR function.

BH: So, Kelvin, what would you recommend? Where should most organisations start their HR transformation? Are there some critical first steps that you could advise?

KL: Yes, and again, we’re talking about a transformation of the HR function in general, so I think it’s critical that organisations should start with the delivery model. By implementing a multi-tier service delivery model, which I will define in just a moment, organizations can facilitate a broader transformation. So, by addressing that, you can really free up some of your centres of expertise – in other words, the HR business partners out there in the field delivering work. Right now, Gartner Group tells us that HR professionals are spending 70-80% of their time doing administrative tasks. And a multi-tier approach can reduce this significantly. This same approach can also reduce the overall cost of delivering services by 20-50%. Re-purposing HR staff to focus on what they were hired to do is key to transformation, so it’s critical, in my mind, to start with the HR services delivery model.

BH: Kelvin, how are best-in-class companies performing today, with this new HR services delivery model?

KL: Well, based on the research that Gartner’s done, typically at the Tier Zero level you’re seeing 66% of all inquiries being handled without any outside intervention. In the past, most inquiries were going to the guy down the hall who seemed to have all the answers. So in this model, about 28% of the inquiries wind up at Tier One – meaning a help desk or call centre. That leaves only 6% escalated to a Tier Two subject matter expert. What we’ve seen in implementing some of the Enwisen tools is that the 66% is up around 80% or 90% in some cases, so you can imagine reducing that 28% as we were discussing earlier, really driving inquiries down, even out of the Tier One into the Tier Zero realm. And that gives significant cost savings back to the organisation, not necessarily in the reduction of staff, but in the repurposing of those individuals.

BH: So what you’re saying, Kelvin, is Enwisen clients are actually achieving 80-90% at the Tier Zero level?

KL: Right.

BH: Impressive results.

KL: And they’re getting these results because employees are going to the Tier Zero, meaning: they’re actually using it. They’re getting the answer that they need within two clicks or less and so it’s reducing the dependence on the Tier One resource to help them navigate, because it’s a simple tool to use. They’re getting information relevant to their situation and they don’t have to think about does this apply to me or does it not apply to me? So that’s why we’re seeing that move of 15-20% from without the tool, to 66% or even higher with an effective Tier Zero.

BH: So, if organisations should start with an HR service delivery model, Kelvin, as their blueprint, what are the key components that they should be focusing on?

KL: Well, the multi-tier model that Gartner talks about, is really based on tiers, starting with Tier Zero, which is primarily self-service through an HR portal. Self-service means that the employee, the manager, the beneficiary, the HR professional, can access information data, and carry out self-service transactions without any outside intervention. Tier One typically means some type of contact centre or call centre where calls come into -- or inquiries come into -- a location, or to an individual, that can respond to inquiries that cannot be handled at the Tier Zero level. Tier Two are the subject matter experts who handle those very difficult questions or inquiries that may be not documented, or that are exceptions that need to be addressed and a policy to be developed, etc. That’s the multi-tier service delivery model, so the trick here is to try to drive as much down to Tier Zero as you possibly can.

BH: So, in other words, go for automation -- the self-service approach?

KL: Exactly. That’s where you can begin to see your savings in terms of cost or freeing up of hours, instead of having the individual HR professional in the field respond to an inquiry regarding a benefit. You put that into a portal -- a knowledge base – that allows employees to get that information for themselves. You’ve freed up some of that HR professional’s time, and you’ve given an answer to the employee when he or she needs it -- and it’s the right answer, based on that individual’s particular situation, meaning their job role, title, location, even bargaining unit.

BH: Kelvin, over the years you must have seen this model evolve tremendously. Could you comment on that?

KL: The multi-tier model has evolved from a very thin layer of Tier Zero and self-service. Self-service 15 years ago was typically an interactive voice response unit, maybe with some capability to go to an intranet – an internal site where you could get some data – and very limited, not mature, employee and manager self-service solutions.

BH: I think we all remember those days.

KL: Yes, it was difficult. Things weren’t very friendly; typically, people were posting static data. They were putting a manual online in a pdf format that you’d have to go searching through. You were searching through online what you used to go through a printed manual to search for and if you didn’t know what you were looking for, you probably never found it. We all remember the days of the interactive voice response unit, where you were punching in keys for ten minutes before you got to the level in the tree that you really wanted to get to, to maybe get an answer that maybe wasn’t what you were looking for in the first place. So, technology has really evolved to the point, particularly with software as a service, that allows individuals to actually search and access personalized information 24/7. Google, for example, is a good analogy to the knowledgebase tools that are now available out there, for ease of use. You can go out to Google or Bing or some of these other search engines and they give you contextualised responses. They know if you’re looking for one thing, that you’re probably looking for something else in alignment with that. "Results delivered contextually" was just not available 15 years ago; technology has really helped the model evolve to a more robust and more viable Tier Zero option. HR staff resources used to respond to routine inquiries. Now, they are freed to do the work they were hired to do. And by moving inquiries to Tier Zero, the lowest possible common denominator, you’re building a lot more data consistency. If you track and monitor it right, you get a lot more feedback from searches in Tier Zero as to what’s going on in your organisation.

BH: We have a very different generation at work with us now. How would you explain the different needs of Generation X versus Generation Y?

KL: I think Generation X were just the newbies on the block in terms of internet usage, so they were getting to know it on the job. Generation Y expects online access in all aspects of their life, so they want 24/7 access when they need it, where they need it and they want the right answer delivered quickly. For example, a lot of organisations have the option to work remotely; so it’s now expected that remote workers are going to be able to get the data when and where they need it, without having to go to the office. If you can remember this far back: in the past, you’d always have to make sure you go into the office to get some information or get access to a particular policy or procedure, or even access to your own data. Unfortunately, I’m old enough to remember the days when if you wanted to get anything from your personnel file, you had to go into a room with the HR professional, even if you just went to change a beneficiary. You’d always have to write a paper file. That was probably the Baby Boomers. Today, Generation Y expects to do that online. They anticipate that and are pushing to get even more access. With the proliferation of smart phones out there, people are looking for data and information whenever and wherever they are.

BH: And the kind of tools that Enwisen is developing for the market, Kelvin, are they really for this world of today that you’re describing? For Generation Y that needs to travel, to be flexible and to always be able to access their HR files?

KL: Exactly, and they’re not just looking for a manual online; they expect -- as with other shopping that they do online and the like -- they expect their employer to know who they are when they log in. So: I need to know who Barbara is, what Barbara’s role and location is, so I’m not spending hours upon hours searching through and trying to figure out what I’m looking for. The types of tools that Enwisen offers enable you to know who Barbara is when she logs in; and if she asks you a question, you’re going to respond in the context of her particular situation. So she only sees what she needs to see and she gets it within two clicks or less, as opposed to hammering through a manual and trying to figure out, ‘Does this apply to me? Does it apply to my colleague? Does this apply to someone else in another country, in another division?’

BH: You make a great case for this new HR delivery model, Kelvin. What about those organisations that are having difficulty pushing through the decision-making process? What are some key elements that organisations should focus on when they’re making a business case for shared services and the kind of enabling technologies that you offer? What tips could you provide for them?

KL: I think you need to, first, align to your overall business objectives; that’s the first thing. The technology is great, it’s fabulous, it does what it’s supposed to do, but you have to build a solid business case and the first step of building a solid business case is aligning to what your business is all about. Remember, at the end of the day, the human resources department is charged with helping employees and managers get the most out of what is typically the biggest resource in an organisation: its human capital. So, aligning these processes with your business objectives is key. The second step is to identify clear and measurable objectives. We’re going to change our service delivery model and we want to do it in X amount of months, in a year, or whatever. Having done that, identify what your vision is before going out and randomly selecting technology. Understand what you’re looking for and if your vision is to transform HR, then transform your service delivery model to reduce cost, to increase, in some cases, your capabilities. And I didn’t mention a fourth one earlier, but a goal should also be to improve employee engagement. Then you’ve developed a vision for what you’re looking for, and, in my mind, that will drive you to the technologies that we’ve been talking about. So, clearly having that defined is important.

BH: Kelvin, you talk about the importance of alignment. With organisations at different stages of transformation, what advice can you give those just starting out to ensure that their processes are aligned with their business goals?

KL: I typically use past or current processes only as a guide to requirements. Is it legally mandated? Is it a corporate policy? Is it corporate culture? If the last two are true, then you need to question why are you doing that. You can do many things, and can even do them well, but if it’s not necessary to do that, why are you doing it? So you need to be continually questioning: does this really line up with the end gain and do I need to do it this way? Constantly doing that tends to get you to the alignment question: is this really the most cost-effective way to do this? Is this really changing the way I deliver service?

I often use the analogy of the young lady who wanted to impress her family and called her mum and asked how to make a pot roast. Her mum told her, the last thing you need to do is cut off both ends of the pot roast and she said, okay, I’ll do that, but why? Her mum said, ‘I don’t know, that’s the way I was taught.’ So her mum calls her mother and asks, ‘Mum, why did you always cut off the ends of the pot roast?’ And her mother answers: ‘I never had a pan big enough, so I always chopped off the ends!’ You don’t want to get into that situation when you develop your processes. In other words, ‘because we always did it that way,’ or ‘because we didn’t have the tool at the time to do it differently,’ isn’t the best way to move forward. Now, if you start looking at the tools that are now available, you can start to rethink how you do things and then you’ll see your processes starting to align with your overall objectives.

BH: What are some examples of technology enablers, Kelvin, for the various phases of transformation?

KL: Your Tier Zero HR portal and/or your knowledgebase for Tier Zero; you typically can’t do without that. You have to have a robust tool to make that effective, something that’s going to actually satisfy the needs of your employee population. And I say that because just simply putting up a static message board -- what we used to call a ‘link cemetery’ -- just makes us throw everything up on the intranet. It’s really not a portal that people will go to, or that will resonate with them. Portals should provide entry into a knowledgebase that can be personalized and searchable, so that it will actually be something people want to go back to. If Tier Zero doesn’t work, you’ve really not moved your work to the lowest cost base. You’ve typically shifted the work from HR business partners into maybe a contact centre. And even if it does go to a contact centre, the enablers there are typically case management tools and telephony solutions -- some interactive voice technologies are great enablers for that. And then finally, at the more mature levels, you want to start to look at implementing some self-service tools. Now, put those in that order, because it’s typically simpler implementing a portal knowledgebase and case management tools than it is putting in an entire HRIS that has self-service. Maybe there’s a payroll system or an HRIS system that needs to be interfaced with, so at various stages, you’ve enabled the employee at Tier Zero with the portal and knowledgebase, you’ve enabled Tier One with the case management tools and then you’ve maybe supplemented that over time with self-service within that. Then you’ll start to really engage with some talent management tool or centres of expertise. One of the key enablers, in my mind, is making sure that you have analytics with this and that you’re able to manage by monitoring and measuring what’s going on in your service delivery model.

BH: I’m glad you brought that up, because measurement is obviously an important topic – what are some important benchmarks in KPIs and shared services environments, and what technologies would you recommend, Kelvin, that would best help to track them?

KL: Well, typically, and we talked about this when we first discussed the key drivers – transforming, improving service, and cost cutting – you have to look at your KPIs, your Key Performance Indicators. KPIs should also include improved satisfaction and improved employee engagement – your average speed to answer, for example. More examples include your average handle times: how long am I on the phone, or even: how long am I in the portal, and how many contacts are going into the portal or knowledgebase. And then, if they’ve generated a case, somebody has to research turnaround times. How long does it take me to get an answer or get a case closed out? What’s my percentage of first call resolutions, so that I’m answering the phone call at my first contact, with a rep? Those are key performance measurements. How satisfied are individuals using both the portal and the contact centre, if you have one? There are tools that have those capabilities, and if they don’t, they should! What you’ll find, for example, in telephony solutions you’ll have more reporting than you’ll know what to do with, so it’s important to really try to understand what you want to measure. Is it your performance? Is it creating increased capacity? Is it reducing cost? – and that will drive what things are key for your particular organisation. Again, you should expect to have some form of analytics embedded in those tools and then you may want to – if you’re leveraging data warehousing in some parts of your organisation –pull some other data together so you can actually measure how your performance lines up with your business objectives.

BH: What are the trends you foresee in the next decade for HR shared services? We hear a lot about a move away from outsourcing, back to in-house shared services. What are you hearing at Enwisen and what do your clients talk to you about?

KL: I think the trend is definitely to bring more things in-house. That’s not to say that outsourcing is going away, but I think the days of broad, comprehensive outsourcing are probably not going to be what they were say, four or five years ago. The trend will be to take things back in-house that make sense from a business point of view. I think some of the tools that, for example, Enwisen provides, make it very attractive to bring in things like the knowledgebase, the portal, to drive employees to a Tier Zero option. Outsourcing is really about labour arbitrage in a lot of cases, and if you’re talking about Tier Zero, you’re not talking about labour arbitrage anymore; you’re talking about moving it to a technology platform that’s costing you pennies on the dollar.

BH: You’re basically doing without the labour, right?

KL: Exactly. The technology is really driving things back in-house, so I think the Tier Zero, and some of the Tier One, work will be brought back in-house. I think that will also expand the scope of what is considered as part of HR shared services. I also think organizations will consider putting things into the HR shared services centres and the delivery model that they haven’t in the past. For example, one of the raging debates in groups that I’m associated with has been, ‘does Employee Relations go into a service centre?’ In the past, those very personal issues go right to a specialist group, but the discussion now is, can that be part of the shared services model and can you expand the model to include that? There will also be trends moving toward getting employees more accessed, such as via smart phones and mobile technology. To date, strategy has not been part of the shared services delivery model, but it’s actually, I think, a catalyst for driving strategy. Going to this multi-tier model and getting back to collecting data and doing analytics, gives you a mountain of information regarding what your employees are concerned about, as well as what works and what doesn’t work within your organisation that will, I think, drive what the strategies of the future will look like. So I think there will be a strong alignment with strategy and this HR shared services model in the future, that hasn’t existed before, because again, there’s data there, and it’s available to be mined and analysed in a way that did not previously exist, under the old model.

BH: Kelvin, following on from your comments, to what would you attribute the recent change in the HR services delivery model? Is this just a pendulum swing back, after years of outsourcing?

KL: It is the technology, it really is. The evolution of the model has been driven by the technology that’s available now and that is still being being developed. Again, as we talked about before, there’s now an alternative to outsourcing whereby you’re not using labour at all -- you’re leveraging technology. I think there will still be this niche outsourcing for specialties: benefits and payroll will be outsourced, for example, but that’s not the same thing as a pendulum swing. The days of large-scale outsourcing are probably gone, because organisations will more closely look at the cost to the organisation of outsourcing the employee engagement. The capability to do some of this work in-house, by leveraging software-as-a-service, and which they don’t have to build internal capabilities to maintain, will actually drive organizations to look at doing this in-house. Looking at solutions like Enwisen gives them the best of both: the ability to keep the employee engagement in-house and manage this new service delivery model with tools without burdening the IT resources with building and maintaining it. Organizations can go out and get this, and get a fairly quick return on their investment; they also can get this up and running fairly quickly with a robust product.

BH: So, exciting times for the in-house HR function ahead?

KL: Yes, I think it’s a fabulous time to be in HR, because I think for the first time, because of the strides in technology, HR professionals out there will really have an opportunity to start to be what we’ve called for years, the HR business partner. I was an HR business partner for years – which simply meant being the HR guy in the field. But if you’re really an HR business partner, you’re out there with the business, in the business, understanding the business and you’re really a services delivery broker -- getting the right tools to your business partners to actually execute on their business strategies. And talking about what types of programmes and policies and practices we need to increase revenue, to reduce cost in the organisation, or to improve employee engagement … those are the things that we should be focused on. We still have the basic fundamentals of HR right; the tools are out there and available right now, with technology that wasn’t available before. This should free the HR professionals up to really have some strategic conversations with the business and really be a value-add for leadership.

BH: Really, HR has been lagging, because Finance and IT, those divisions … have benefited from enormous investments over the years. Would you agree, and is now really the time for HR to shine? Do you think that senior management recognises that the same benefits that the Finance and Accounting have been able to leverage for years, are now available to the HR function?

KL: I’m not a Finance and IT guy, but I would say that I’m more excited about these tools than I ever have been about a finance tool, because it impacts the entire organisation and again, the most valuable resource in most organisations is the human capital -- the people that are actually delivering the services or producing the products. So, if you can do this right and then add value, you have made a huge impact on the organisation that will truly have leadership standing up and taking notice. We can start to show some hard dollar savings around employee engagement and true HR transformation when we go to this new service delivery model .

BH: Kelvin, thank you so much for joining us today.

KL: Thank you.

About Kelvin Lovely
Kelvin Lovely is a certified Senior Professional in Human Resources - SPHR with over 25 years of extensive HR and Operations experience. His professional experience includes managing the HRIS function, the design, development, implementation and operation of the HR Services Center for Allstate Insurance and leading the Shared Service Delivery Center for Anderson Consulting and Accenture’s HR Business Process Outsourcing organization. Kelvin Lovely has also served as the Global Service Delivery Review Director and Global Vendor/Alliance Lead for Accenture HR Services. Kelvin has done process, design, development, and improvement work as part of HR Transformation efforts for both internal and external clients. He is a member of SHRM and has a BA in Business Administration from Marquette University.