Human Resources as a shared service is an efficient model in an organization with multiple subsidiaries.
In today’s workplaces bottom line, gross margin and operating income have become the common buzz phrases around the water cooler. Organizations are trying very hard to meet their customer service needs and to cut costs and remain efficient, profitable entities. One of the ways companies are doing this is by sharing services, or creating shared service departments. Human Resources is a very common department to create the shared service approach, or model. The shared service approach can certainly save companies money and increase the bottom line. Companies can achieve cost savings through the shared service approach. Companies can more efficiently utilize their workforce with the shared services approach. Operating companies can put more emphasis on providing the service or product to their end customer by using the shared service model. The shared service model takes the burden away from small companies, or business units within a large corporation. Human Resources as a shared service is an efficient model in an organization with multiple subsidiaries. An ever expanding number of large, small and medium sized businesses are making the decision to move to conducting their Human Resource business by utilizing the shared services approach to deliver. Many of these companies feel that there is a very distinct advantage in transitioning to this model. It’s been said in numerous articles that moving human resources to a shared service is a strategic move at the upper management level and a total cost savings or cost reduction at the base or operations level. (Cooke, 2006) The shared services approach is somewhat of a new approach to running the support services of a company. Its growth has really exploded in companies that have several subsidiaries, or sister companies. It’s also very popular with companies that have many work locations across the country, or internationally. In today’s technological age it becomes much easier to utilize this model, years ago it wouldn’t have been possible for Human Resources, or any other support entity to be able to use the shared service approach. This model has become so popular that companies such as Barclays, Motorola, Compass Group, Bank of Ireland, Cable and Wireless, Zurich Financial Services, Shell, Compaq, Deutsche Bank, Allied Signal Incorporated, Ontario Government of Canada, and ABB Group, just to name a few, have all moved to this shared service delivery approach in the businesses. As you can see it’s a very diverse group of companies with both national and international attraction. (Cooke, 2006) Human resources is by and large the control center of an organization’s employees. Most company’s human resources section has a vast responsibility. The responsibility can range from implementing and enforcing policies to the actual brainstorming and creating of the policies. They essentially manage the company’s workforce. ("Human Resource Management , 2011) Human resources exist to help cut down on risk and help ensure the company in getting the most bang for its corporate buck. The folks who work for and run Human Resources shops work for the company, they essentially manage the company’s employees. Most Human Resource shops are charged with these fundamental tasks; the recruiting and retention of the organization’s workforce, compliance with the plethora of laws and regulations that exist, local, state and federal, making sure that the employees and are have the training needed, providing assessments and documenting performance. Along with many, many additional tasks that a typical Human Resource shop controls. (Human Resource Management , 2011) It is very important to understand that having clear objectives and a set plan are some of the reasons why companies choose to go to the shared services model. Most companies understand that it’s...
References: Certo, S., & Certo, T. (2012). Modern management. Chapter 13, Human Resource Management (12th ed., pg.294). Saddle River, NJ: Prentice Hall.
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