May 30, 2024

HR shared services at a crossroads: embrace automation and build core resilience

Research released today from leading HR consultancy LACE Partners has found that whilst operational efficiency has always been the premise of HR shared services (HRSS), driving employee experience is now equally part of its DNA. Technology is keeping HR leaders awake at night, with nearly half of the respondents saying their top challenge is that current HR systems and digital enablers are not fit for purpose.

Other key findings include:

  • The trend to become a specialist provider continues and the function is increasingly becoming an innovation centre – two of the top three areas for future service expansion sit under ‘innovation’: improving experience (49%) and HR systems (21%)
  • HRSS is taking an increased formal responsibility for people experience across the HR function, placing greater emphasis on addressing the line manager experience
  • The data suggests a steady rise in HR services becoming part of a Global Business Services (GBS) model – 12% of survey respondents in 2020 were part of GBS, increasing to 32% in 2024
  • Most (71%) still do not have defined career pathways for their HRSS team members – this has not changed since at least 2020
  • Taking baby steps with generative artificial intelligence (AI), with returns largely in line with expectations – 29% currently use AI, with just over a third piloting it.

 

The ‘HR Shared Services Trends 2024’ report was conducted at the end of 2023 and involved 34 global HR shared services leaders across multiple industries. It is the third in LACE’s bi-annual surveys dedicated specifically to the HR shared services marketplace, which started in 2020.

The report explores where organisations are focusing their efforts to optimise service delivery and experience, along with the priorities for 2024 across service offering, ways of working, talent and digital enablers. It highlights challenge questions that HRSS leaders should consider as they seek to continuously improve ways of working and enable their teams to be the best they can be. For example:

  • What is your value proposition for HR shared services and how well are you explaining this to your business and wider HR stakeholders?
  • If you have many countries with small employee populations (or a ‘long tail’), are there opportunities to leverage scale and enhancements through a wider Global Business Services model?
  • Have you put experience in the ‘too difficult to measure’ bucket and if not, do you have a clear and tangible way of measuring experience to enable action?
  • Do you have a clear workforce plan that maps out the skills you need in two to three years’ time? How will AI change your approach to the talent and skills you might need?
  • Have you truly fixed the basics of your HR shared services operating model (process, data, governance, tools, etc)? If not, what’s stopping you?

Speaking on the challenges that HRSS teams think they will face in 2024 and beyond, co-author Emma Leonis-Hughes, Client Executive Director, LACE Partners, said:

HR shared services is an innovation centre for service excellence and experience. It’s encouraging to see that HR shared services leaders no longer feel they are having to justify their existence and are creating a ‘pull’ for services from the wider HR team and the business.

Generative AI presents a huge opportunity, particularly for HR shared services. Whilst adoption is in its infancy, HR leadership teams cannot afford not to be thinking about their plan, as the pace of digital innovation is only going to accelerate.

The challenge for HR shared services leaders will be striking the balance between embracing innovation in key areas whilst ensuring they build resilience for the future across data, process and (perhaps most critically) skills.” 

 

On what HR shared services need to do to think differently, fellow co-author Dawn Goodall, Director, said “now is the time to act on the digital agenda for HRSS, it is encouraging to see an increased focus and investment in Generative AI by HR leaders, which will be critical in moving the dial forward to support improved efficiency, continuous improvement and evolving the employee experience”.

About LACE:

LACE Partners is a fundamentally different HR consultancy because our people are not your run of the mill consultants – we have some of the best minds in HR transformation, employee experience, digital transformation, payroll, change, talent and people analytics supporting HR teams every step of the way through your project requirements. Our core values:

  • Passion – We are energised by working with people who share our passions and values for solving HR, people and change challenges.
  • Innovation – We take pride in the work we deliver for all stakeholders and want to succeed in the right way and with the right approach to our work.
  • Care – We believe in being at the forefront of future thinking and ideas, including technology that empowers people, supported by research and partnerships with like-minded companies.

Our capability is drawn from world-class consultancies and people who have held senior leadership positions at major corporates.

UK headquartered and London based, LACE undertakes global projects for organisations with 5,000 or more employees.

For more information about LACE visit the website at www.lacepartners.co.uk