Award profile: This award recognises the HR teams that have successfully created an HR shared services function or outsourced part or all of the HR function to a third party. The judge looked at the contribution the shift made to the organisation and for the delivery of efficiencies and/or improved quality of service. Entries also had to provide proof of measurement, innovative use of technology and clear vision.
Fujitsu Services and Baxter Neumann work in collaboration on HR shared services and HR outsourcing projects. Fujitsu Services is one of the world’s leading IT services companies, focusing on the delivery of IT infrastructure management and outsourcing, with a full range of related services. Baxter Neumann is a management consultancy, advising clients on organisational effectiveness, HR service delivery and people strategy.
Nigel Roxburgh – category judge
Nigel Roxburgh is research director at the National Outsourcing Association (NOA). He is also the founding director of the NOA, which represents more than 200 corporate members. He joined Accenture management consultancy in 2006 to develop best practice business process outsourcing deals and has advised a wide range of major organisations, including Granada, Dixons and Xansa.
DSG INTERNATIONAL PLC
The team – HR Shared Service Centre Number in team: 35 Number in HR function: 182 Number of employees HR is responsible for: 28,000 (35,000 at peak)
About the organisation
DSG International (DSGi) is Europe’s leading specialist electrical retailing group and owns Dixons, The Link, Currys and PC World. The company has around 1,450 stores in 27 countries and employs more than 40,000 people.
The challenge
When Helen Andrews was appointed as HR director of shared services in October 2004, her challenge was to establish a single UK service model to meet the specific business needs of the group’s four main retail brands, business-to-business operations, distribution service and head office.
What the organisation did
- Introduced a two-phase transformation programme over 18 months.
- Set up a cross-functional HR working party which met monthly with representatives from all UK businesses.
- Created a new organisational structure to encompass specialist service lines, including employee relations and pay and reward programmes.
Benefits and achievements
- Payroll bill has reduced by more than £2m, and UK HR headcount fell from 320 to 182.
- DSGi saved a further £500,000 in third-party costs.
- Around 28,000 (rising to 35,000 over Christmas) employees can obtain information on all HR subjects, from pay to policy advice to benefits information, by calling one number.
- More than 6,000 calls and 3,000 e-mails are received monthly, with 92% of queries being resolved immediately.
The judge says: “DSGi proved successful in making big savings while operating on budgets that were reduced by 40%. The savings were all the more impressive because they were made without investing in capital expenditure.”
LONDON BOROUGH OF HARINGEY
The team – HR
Number in team: 6 Number in HR function: 60 Number of employees HR is responsible for: 5,500
About the organisation
The London Borough of Haringey aims to improve the quality of life for everyone in the borough. Its priorities are achieving excellent services, building safer and stronger communities, raising educational achievement, and putting people first.
The challenge
Following the Gershon efficiency review, Haringey decided to implement a managed service to enable the council to “re-order” temporary agency workers. The contract would also enable other London boroughs to access it.
What the organisation did
Brought together HR, the external resourcing team and other council departments as part of the project team.
Set up a project board as an escalation route for risks and issues.
Formed Member Working Parties and held focus groups with suppliers and internal managers.
Held roadshows and used posters and internal press to engage staff.
Benefits and achievements
Employees have one simple route to order temporary staff, no longer needing to negotiate rates or deal with purchase orders or invoices.
Trained 500 staff to use the system.
Removed managers’ involvement in invoicing for staff, and from dealing with 41,000 invoices to just one a month.
The judge says: “The north London borough showed an innovative approach to hiring temporary staff, which has cut duplication of effort and paperwork and, consequently, costs. It showed good teamwork.”
ABN AMRO
The team – ABN AMRO UK HR
Number in team: 9 Number in HR function: 90 Number of employees HR is responsible for: 6,500
About the organisation
ABN AMRO is an international bank with Dutch roots. The UK operation employs more than 6,000 people. The bank has more than 3,700 branches in 52 countries and employs 105,000 staff.
The challenge
In 2004, the HR department found it was becoming increasingly dissatisfied with the services provided by its incumbent recruitment supplier. The bank decided to outsource recruitment for the UK investment banking arm to deliver improved service and cost savings.
What the organisation did
- The HR team launched a global transformation programme to better equip them to support the bank’s strategic priorities.
- Partnered with an external recruiter.
- The UK chief operating officer and head of HR formed a steering group to implement consistent processes across the business, improve the speed of recruitment and calibre of candidates, and to make cost savings.
- A combined team from HR, procurement, project management and internal communications worked together to a 16-week schedule.
Benefits and achievements
- Recruitment service take-up by line managers increased from 20% to 80% for permanent hires.
- The HR function delivered outstanding improvements and has produced £6.25m in savings to date.
- There is greater visibility of job postings and enhanced reporting accuracy.
The judge says: “The retail and investment banking company created a successful project, which produced more than £6m in savings. This submission demonstrated strong leadership, and HR’s contribution to the business was also evident.”
AUTOMOBILE ASSOCIATION
The team – AA HR Operations
Number in team: 50 Number in HR function: 95 Number of employees HR is responsible for: 6,500
About the organisation
The AA is one of the UK’s most high-profile motoring organisations, with more patrols than anyone else. It now also provides financial services to its customers. It provides expert advice and knowledge on transport issues, which are respected by safety experts and government.
The challenge
Centrica sold the AA in 2004 to two private equity firms, CVC and Permira. This meant that the AA’s existing shared service had to be disentangled from its former owner. The company set up AA HR Operations to offer operational and payroll support to the AA’s seven businesses. The aim was to reduce costs while improving the customer experience.
What the organisation did
- Introduced CV screening, recruitment testing and a leaver management process.
- Reduced time to issue contracts from eight days to two.
- Reduced time to enter absence from an average of 18 days to three.
- Average time to start cut from 40 days to just 15.
Benefits and achievements
- Moved away from the segmented ‘factory-style’ process roles, to roles with accountability for all HR processes within a designated business area.
- Introduced the HR Operations Change Forum to flag business plans or policy changes for inclusion in workload planning.
- Greatly improved customer satisfaction levels and provides a better quality of service.
The judge says: “Having been devolved from Centrica, the AA needed to create its own shared-service environment. Its approach to do this was innovative, and it showed a creative use of resources in its strategy.”
ROYAL MAIL PLC
The team – People and Organisational Development Services
Number in team: 1,600 Number in HR function: 2,200 Number of employees HR responsible for: 206,000
About the organisation
Royal Mail Group is a public limited company wholly owned by the government. It employs almost 1% of the UK population. Each day it collects, processes and delivers around 84 million postal items to 27 million addresses.
The challenge
Four years ago, Royal Mail was losing more than £1m a day, failing its customers, had poor industrial relations and inefficient operations. The challenge was to turn the company around in time to face the impact of a fully liberalised postal market by January 2006.
What the organisation did
- Tony McCarthy was brought in as HR director – the first time a single person had been responsible for the overall people strategy for the business.
- Brought in external HR professionals to focus on strategy, HR business partners to crystallise individual unit needs, and created a shared service centre.
- Project team focused on re-engineering the processes and removing duplicated roles.
- Leadership team provided hands-on support for line managers.
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Benefits and achievements
- Cut HR costs by £57m and reduced headcount by 40% within three years.
- HR to employee ratio went from 1:65 to 1:145.
- Introduced a new pay package for staff.
- Supported the reduction of the workforce by 30,000 over the last three years without using compulsory redundancy.
The judge says: “This showed significant business impact and savings for an outsourced or shared services project. The savings achieved were in the region of an impressive £57m per annum. The project scored highly on innovation.”
