My SLA’s Are Green (But I Don’t Feel Green)
If you are running best practice governance with your captive shared service centre (SSC) or external outsourced provider you should be doing monthly performance reporting on the agreed service levels. And if your service is around HR and Payroll the review process can be more emotive than with other processes. In HR, if service levels are missed, employees are impacted and the “noise” level regarding employees' lack of satisfaction goes up. Whereas with F&A, if a supplier does not receive their payment on time as required by the SLA, the supplier might not be happy but it is less visible inside the company and the impact on employees is much less emotional.
Within HR processes, the identification and measurement of SLAs have been an on-going debate for many years, especially in the outsourced world where there are usually financial penalties attached to missing SLAs. Many organisations have attempted to help codify the SLAs that are appropriate for HR SSC or outsourcing agreements. These include third party advisors such as ISG (Information Services Provider formally TPI), consulting organisations such as Vantage Partner, and professional networks such as HROA. All have their version of what should be measured and what percentage the supplier should be achieving to be considered “green” or good.
Let’s look at a few examples, just to understand some of the challenges in respect to SLAs and the HR domain. These examples are from different customers and advisors and were received as part of an RFP process to outsource HR services. The examples included cover payroll, central HR administration and employee service centre.
Measuring the areas above as an indication of the level of service received does provide a foundation upon which to determine whether there are performance issues or other areas of concern with the HR services provider, whether in-house or outsourced. But if the HR service provider consistently hits all of these measures, month after month, will your employees “feel green”? Will your employees and managers feel that they are getting an excellent service around the HR processes, which makes their jobs easier?
My experience has been that in HR, even if everything is green, people don’t feel green. HR is very personal, so even if only one person out of 1000 has something go wrong it is personal, even if the SLAs are met. That employee might be your direct report or someone in your team, and when a mistake happens to an individual (they have the wrong benefits, their holiday entitlement is not correct, or they got paid incorrectly), it becomes personal. And, unfortunately, bad news travels much faster than good news, so the chances of others knowing about a mistake are very high. Compare that to a supplier who did not get paid by the finance shared service team. The impact, visibility and noise level regarding that mistake are more "outside" the company than "inside", and the result of error has much less “publicity”.
So, what can you do about this situation?
First, appropriate SLAs do need to be in place between the customer and the supplier, whether that is internal or external. Personally, I am for fewer SLAs that are very focused on the quality and timeliness of the HR process. Tracking, measuring and monitoring SLA performance cost money, on all sides, so it's better to have a few that are fit for purpose rather than a dozen just to cover the areas that have a low probability of happening.
Second, have strong governance with a well-structured meeting timetable and agenda – monthly meetings to discuss potential issues or opportunities in a less formal manner, and then once per quarter running a more formal SLA review.
Third, have a structured customer feedback process, for the real end customers, your employees. Whether it is a quick survey at the end of a service centre call or an e-mail survey sent out once a query has been resolved, or doing a survey of randomly selected employees every month or quarter, the service provider must have a way to measure customer satisfaction. Whichever technique is used, getting direct feedback on how employees are feeling about the service is critical to “feeling green”. In the quarterly governance meeting, reviewing the feedback should be a standing agenda item for discussion.
And finally, feeling green is hard to measure. That is why SLAs on their own are not enough when it comes to HR, and this is especially true in an outsourced environment. Both the customer and the provider need to recognise that there are parts of the service that are hard to measure. And in partnership, these “feelings” need to be monitored so that appropriate interventions can be made, at the right time, as a team, to ensure that everyone keeps “feeling green”.