Top companies are embracing the idea of shared services as an alternative to outsourcing HR administration.
The approach allows organisations to keep HR in-house by setting up resources in one unit that can be accessed by sites in different countries, often using Internet technology.
In the last six months, oil giant Shell has rejected the option of outsourcing its HR function and set up an HR shared services business in Europe, which includes both HR expertise and transactional processes such as payroll services and employs 300 people.
Sandra Law, manager of Shell’s European employee service centre, told Personnel Today that the company has no intention of following BP Amoco and Unisys down the route of outsourcing all of its HR function.
Speaking at a conference on e-enabled HR organised by IIR in London last week, Law said, “The next stage will look at using the web technology, but we are not looking to outsource all HR services.
“In the future we may outsource parts, but we think the service as a whole should be kept within the organisation. This then keeps a professional HR network.”
Shell People Services employs 550 people globally, including 300 in Europe, comprised of staff with strategic HR expertise, diversity specialists and transactional processes such as payroll.
Another company, Citigroup Business Services, set up three shared services in Europe, the Philippines and the US three years ago to manage HR in the 92 countries in which it operates, with HR as a key component.
“After 12 months the cost base was reduced by 30 per cent with no loss of services or control,” Leo Bartle, European head, told delegates.
The shared services approach was praised by Steve Tree, senior manager of Arthur Anderson’s human capital group. He told delegates that businesses that used shared HR services made budget savings estimated at between 20 to 30 per cent.
By Catriona Marchant