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. 

Structure of New HR Service Delivery Model

The scheme of work involves setting up a new structure, which accommodates a higher proportion of activities being migrated to a 'HR Centre'. This centre incorporates both transactional and strategic elements — see Figure 1. Business partners and strategic HR advisors are assigned to the various MPS operating units. Web-based self-service tools complete the service delivery model.

 
Figure 1: Overview of new organisation.

The responsibilities of the different facets of the model are set out below:

HR Shared Service Centre

The operational hub of the model is the Shared Service Centre, responsible for delivering the policies and programmes developed in the Strategic Centre, and designed around tiers (0 — Self-Service (on-line answers and transactions); 1 — Human Resources Advisory Centre (24x7 service); 2 — Expert Services (specific queries, more complex or time-consuming transactions); 3 — HR Operational Support (deployed from the Expert Services, this group is based in the business; one-to-one interactions where sensitive or complex cases require this level of support)).

Business Partners and Strategic HR Advisors

This area is responsible for understanding/defining HR requirements from a business perspective; ensuring the Shared Service Centre is meeting local SLAs in the delivery of HR services; developing business solutions to meet business requirements in conjunction with the Strategic Centre and working with SMTs to manage the organisation.

Strategic Centre

The Strategic Centre designs and develops policies, processes and programmes to support business requirements; utilising intelligence coming from the Service Centre and Business (Business Partners / Strategic HR Advisors) and understanding issues/gaps to design corporate HR solutions; proactively identifying trends across organisation; Interfacing with Training, Leadership and Organisation Development.

Reflecting on these proposals, Martin Tiplady acknowledged that gaining stakeholder buy-in had been challenging.

For many people, the intended changes to our service delivery model have been perceived as a centralisation programme, with all the connotations that brings in regard to taking away well-thought-of local resources and replacing them with a faceless, centralised bureaucracy. In fact it is not a centralisation programme; it is just that as a line manager the things you expect to be done by your HR manager 'down the corridor' will now get done in another way.

Allied to that, we needed to use technology rather better than we do, in a sense that we spend quite a lot of time in HR updating individual records and doing lots of checking. Well, the new model relies quite a lot on self-service and we shall be relying on our technological infrastructure rather more in the future.

If I'm frank, we have the support of our top management, the Board, who have undoubtedly questioned and challenged the programme but they have been willing to listen to the arguments and have been persuaded. However, when I go out into the Boroughs, and visit our Operational Command Units (OCUs) there is still a job to do winning over hearts and minds. It is there that the perception of centralisation is probably at its most acute.