Why is HR Service Delivery Important?

In his 1997 ground-breaking book ‘Human Resource Champions’, Management Professor (and HR guru) Dave Ulrich set out a model for the operation of the Human Resource function that would influence a generation. One of the roles he defined for the HR function was the ‘Administrative Expert’, a role designed to cope with the vast range of back-office support services that ensure the business is compliant with statutory requirements and internal policy. HR typically delivers two distinct types of service: 

❐ Simple transactional services: Administration arises as a direct result of employing people and covers a vast range of processes – including issuing employment contracts, managing pay and conditions and maintaining personal data, all of which require effective administrative processes. As a minimum, processes must be legally compliant, but ideally they should also be cost-effective, efficient and of good quality. These activities are generally considered to be ‘compliance’ processes – they enable the business to operate within the law and policy, although they do not in themselves provide any direct strategic capability. 

❐ Transformational HR services create value for the organisation through processes such as learning & development, performance management, talent management and recruitment, leading to increased employee engagement and the creation of competitive advantage. These types of services tend to be delivered in organisations where the Human Resources model is relatively mature and where adding value is more important than compliance with policies. Providing HR and Payroll transactional services is expensive for an organisation, representing an overhead to the business both in terms of operational cost and managerial time. Anything that can be done to reduce the cost of delivering these services represents money the business could invest in other customer facing activities that can create wealth. As a result, there is often pressure on HR functions to meet the dual and sometimes conflicting requirement of reducing the cost of delivering service while at the same time improving its quality. A key decision facing organisations is how best to structure the delivery of HR and Payroll services to meet these needs, a problem that remains just as much a challenge now as it did in the mid-1990s.