Q&A: Andy Cook, Marshall-James ER
UK-based employee relations consultancy Marshall-James recently conducted a survey looking at the consequences of implementing shared services for human resources. The report - "The impact of HR Shared Services: glass half empty or half full?" - certainly doesn't pull any punches; its controversial findings are about to send shockwaves through the HR shared services space, and in advance of the report's release we spoke with Marshall-James' founder and MD Andy Cook about his firm's survey - and what it means for HR.
SSON: Andy, your organisation recently conducted some research into HR shared services in the UK. We’ll come onto the results in a minute: let’s start by getting a bit of background about the research itself. What were the aims of the study and with whom did you speak as part of the research?
Andy Cook: The aim was two-fold: firstly to get an idea of the impact of the shared services model on HR professionals themselves; and secondly, to get an idea of the impact the model has on organisations in general. The first part of the research is of particular interest to me as I have found that HR is becoming less skilled in organisations where the business partner model works and there is less career development and I wondered if that is something that is more widespread than just the people I talk to.
SSON: So let’s move on to your findings. What did your research discover? And were you surprised by what you found?
AC: We found that 58% of organisations still do not operate an HR shared services model. We also found that 62% of the HR directors surveyed are concerned at the detrimental impact the model has on the service and support HR provides to their particular organisation. Fifty per cent of the respondents said that saving money was the main motivator for the introduction of the model.
As far as the impact on the profession itself, specifically career progression and the impact on the development of HR professionals, over half agree with my view that there is an issue in this area; it is very difficult to produce all-round experienced HR professionals from within a shared services model.
I was not necessarily surprised by the findings. However, I was surprised at the number of senior HR People who are clearly not comfortable with the model as it currently stands.
SSON: Let’s look at the positives first: it seems like HR shared services has become quite a widespread model in recent times. What do you think have been the drivers behind the adoption of the model?
AC: The drivers have been to make HR more strategic and therefore less of an undervalued overhead whilst achieving efficiency and ultimately a reduction in cost. This is mostly achieved by de-cluttering an HR professional’s job and removing anything that can best be done elsewhere, for example, volume recruitment, payroll and other areas of HR administration. Therefore, the HR person is able to concentrate on being strategic.
SSON: Shared services is driving HR to be more strategic, you say – what do you think will be the primary consequences of this move for current HR practitioners? And for those looking to get into the HR arena?
AC: The main issue is the inability for HR people to get broad experience. HR shared services works to the principle that there are "three boxes": Transactional, Business Partnering and then Specialists. The business partners are those who work strategically and therefore do not have direct accountability for areas such as recruitment, talent management, compensation and benefits etc. Those responsibilities are handled elsewhere. The point is that in order to move up the HR career ladder, experience in all HR areas is essential as most senior jobs demand it. For a business partner to get experience, they would have to move in to each of the specialist roles and that would take a lot of time.
Entry-level HR people are nowadays quite likely to go into a call centre environment rather than sitting in a fully functioning HR department where they can get the experience of seeing and hearing what goes on.
SSON: On the dark side: your survey found some had some pretty negative things to say about HR shared services. Why do you think this is?
AC: I think it is because the model has been taken too literally and been implemented, regardless of fit. In most organisations where there has been an HR presence that has been stripped out and replaced with phones and emails, the users of the service find that very difficult. As a result, HR’s reputation and credibility can suffer. It is very difficult to put a price on the "organisational fabric", but once it is torn down, problems start to appear.
SSON: Bottom line: should we conclude from this survey that the introduction of shared services is bad for the HR function?
AC: Definitely not. The logic is sound, but my view is that each organisation looking at the model should think about getting it to work best for them, rather than being bound by something that will create more problems than it may solve. Don’t be afraid to have four or five boxes to recognise that not everything can be hived off into one of three boxes - and also make sure that communication within HR is constant, and that from HR to the rest of the organisation. The issue of developing HR people must also be accommodated at the design stage.
SSON: Can you explain the significance of your survey for the ongoing debate over the Ulrich model?
AC: I think it highlights some of the areas where the Ulrich model needs to be taken forward. I think that models designed by academics have their place, clearly, however, I think that people who have worked in an HR department and so know the jobs, the pressures and the importance of the relationships between HR and the rest of the organisation are best placed to have a significant input into the future of the profession and how it can achieve some of the things the academics want for it. I think Ulrich has done wonders for HR, but to just say the model does not work because the people using it are not as good as they need to be, is a bit of a cop-out.