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SPEAKER: The following is a presentation of the ILR School at Cornell University. ILR, advancing the world of work.
BETH FLYNN-FERRY: Hello, I'm Beth Flynn-Ferry, the managing director for CAHRS. And we're pleased to welcome you today to our sixth and final webcast for 2017. Today's topic is going to be HR shared services or HR operations in models and trends. And we've had two of our CAHRS research assistants working on this topic in the fall. I'd like to introduce them. They are Catarina Levita Schallenbach and Danielle Collier.
I'd like to remind you that as we go through the presentation today that we'd like to take your questions. So be sure to send those in as they come up for you. And we'll break several times during the conversation to do that. And then lastly, I'd like to remind you, as well, that the slides as well as the videotape of the webcast and a white paper will be available online in a couple of days for you to share within your organizations. So with that, I'd like to kick it off by turning it over to Catarina.
CATARINA LEVITA SCHALLENBACH: Thank you, Beth. So welcome, everyone. Thank you for watching live webcast today. And also, thank you all that are accessing later through CAHRS' website. As Beth said, we're going to talk today about HR shared services or HR operations, its models and trends, and HR shared services within the HR organization.
We interviewed 39 companies and 44 HR executive leaders within 15 different industries. So what we are going to present today to you, it's the three areas of evolution that we identified into the HR shared services. One is the model evolution, the focus of the HR shared services centers, and the process and technology. Then, we are going to present the HR organization and its future trends.
But before going into the model, let me explain to you what are the areas of evolution. The model means how HR shared services has organized itself to provide the HR services to the organization. The center evolution, it's what are the main drivers, what are the focus of the HR shared services. And the process evolution is tied to technology. So it means how HR shared services has structured its processes and technologies to provide the services to the organization.
Its interesting that we identified that 46% of the companies are passing through a large, major change into at least one of these three areas of evolution, right now. So let's move into the model evolution. So we identified that the organizations, either they are completely decentralized, so their model has not a true shared services. And the services are provided either by the COEs, the centers of excellence or expertise. Or the services are provided by the HR business partners, the HRBPs.
Then the next step, some organizations have centralized and have structured their HR shared services into one area. It provides standard services to all organizations. Usually on the centralized and more standardized process, they have few, they provide few HR functions, such as payroll or benefits. And the third area of evolution is when they moved and took a more complex and global model, which means that, complex means the organization, the model, is providing many HR functions.
So they add, not only payroll and benefits, but they add recruitment or compensation. And they provide global processes. So the processes that are there are to all the entire world and the entire countries that are inside this organization. And they try to take all the repeatable tasks from the COEs and the HRBPs and provide through the HR shared services.
So what we identified is that 21% of the organizations we interviewed are in between not having an HR shared service at all, being completely decentralized, to starting to centralize and standardize their processes. 46% of the companies, they are in between centralized and standardized and moving to more complex and global solutions. And 33% of the companies, they are already into complex and global shared services model.
So let's share with you also some survey data that we got from the company. So we asked them to self-select which functions are included in the HR shared services. And it was interesting to see the top three, benefits, reporting, and job leaves. And 85% of the companies are leveraging the information that they have inside their shared services, the data that they have, to send to their organization through reports.
It was interesting to see that and also interesting to see that within this 85% of companies, 39% of them are providing self-service reports. So the managers or the HRBPs, they can access a portal or a system and get the reports that they want for them. We also ask them where are the shared services centers located. So you can see here, all of them except one, they have their centers in the United States, usually leveraging their headquarters, following their headquarters.
But also India, the Philippines, China, Mexico, UK, they are the main regions that has the most shared services locations. We also added some other countries. Usually they have one or two centers on them. And usually follows the size of the company in that region in the country. It is a specific language issue, so that's why the company chose that region.
We found some trends, as well, regarding the model. One is around the tailoring services or customizing services for the employees. So 39% of the companies, they are providing more tailored services, and not only standardized, but tailoring them to the employees. There is a focus on this customization, not only for the companies that are adding to the complex and global model. So companies that are even in standardized or they are moving from decentralized, they are already looking into tailoring their services to the employees.
21% percent of the companies, they are inside a global business service model. What does it mean? They are together with finance, global supply chain, or other areas of the organization. So the organization created a GBS, and HR is inside them. It was interesting to see there is no specific industry trend for being part of the GBS. So all the companies that are inside the GBS nowadays, they are from different industries.
And most of the companies that are in GBS, they are into a more complex, providing many services, many HR services already. And they are also tailoring, most of them are tailoring services to the employees. So they are in the more right end of the evolution model. 15% of the companies we interviewed, they have their HR shared services completely outsourced. So they gave their HR services to a vendor.
And half of the companies that are into the outsourcing model, they are focusing more on cost reduction and efficiency, while the other half are also looking into tailoring services. And they are using their vendors' artificial intelligence capabilities, such as a chatbot, to provide these more tailored services to the employees. I will move on to Danielle now to talk about the center evolution.
DANIELLE COLLIER: Thank you so much, Catarina. So when we look at the center itself, we're thinking about, what are the main drivers that are leveraging the focus of the center. And as you can see, these three areas kind of match well with the model that we just spoke about. So you'll see them kind of move along the same evolution here. So the first box here, we are looking at a high touch, high cost model.
So this is your traditional HR generalists performing tasks in the business. So this is where you're in a business line, you might have an HR person that you know by name. And if you have questions about your benefits, your health insurance, or anything related to shared services, what we think of traditionally now, you would go to that person and ask them that question individually.
So of course, that was a lot more time consuming for that individual. So then we moved on to a more center-based work. And this was mostly related to efficiency and originally cost reduction. So taking work from that one person and spreading it out among many people that could answer those more transactional questions. And that's where we first started to see some outsourcing occur.
Now, we're looking at a more customer driven experience. So this has really been driven by the digital evolution. So now we have the possibility for HR systems to be more digital, just like we experienced as consumers. And this has helped really drive the focus on the end user. So most companies have a portal for self-service so employees can access the information they need whenever they need it and have a more consumer based experience.
This leads right into our conversation about employee experience. So I think employee experience is certainly a hot topic in HR right now. And I think it's for a very good reason. A lot of what we heard from the executives was related to this quote above, which is that the HR service center is really the face of HR to most front-line employees.
When they're contacting HR or speaking to someone in HR, it's going to be someone in the service center. So it's important that that service center provides great customer service and they have a really positive experience with that service center. So when looking at our companies that we interviewed, we found that 15% of companies are just starting to explore this customer centric idea.
And we think, we found that a lot of the reason for that is because they might not be set up in the type of model that is ready to support that type of focus. 44% of our companies are showing what we call an interest in employee experience. So they discussed and understood the importance of employee experience. And they're certainly making changes and investments in their shared service center that will directly lead to employee experience. And they're considering those employees when they make changes or design changes to their systems.
Finally, we found that 41% of companies have a strong emphasis on employee experience. So they're creating what we're calling and what companies refer to as consumer grade experiences. So trying to have the same experience with your HR shared service center that you would as a customer of any company that you might interact with on a day to day basis as well as involving employees directly in the design process when they make changes to their systems.
So here we see some bubbles. So I would point out that the size of the bubble corresponds with the times that it was mentioned in our interviews with our executives. So as you can see, we have our employees at the center here. And there are a couple of things I want to call out that I think are interesting.
One is that many of the companies mentioned that they are driving self-service. So self-service is certainly a goal. And they would like employees to do as much self-service as possible. Because it's really a win-win for both HR and the employee. They're also using design thinking, as well as creating seamless experiences for employees.
Another one that's really important here is moments that matter. So we heard a lot of companies use this phrase moments that matter. And to really make a connection there, what that means is when an employee contacts HR, it's usually for something that's very important in their life. So they're getting married or they're having a child. And that kind of experience is very, very important to an employee, not just for their work life, but for their personal life or their relationship. So it's going to make a big impact on their day to day experience.
So that moment is one that really matters to that employee. So we want to make sure, again, that the HR service center is equipped to help them every step of the way to have a really seamless and positive experience as they go through that big moment in their life. And that might be one of only, say, 10, for example, that the employee uses a service center to contact. So it's important that we create, for example, a consumer grade experience for that employee when they reach out to us.
A couple of quotes here about user feedback which we just thought were interesting, which is you could never get enough user feedback. So always thinking about that and always collecting it. And do not take that end user for granted. So we hear a lot that HR can assume that what works for us might work for the end user. And it's important to remember that that might not always be the case.
Some of the insights we gleaned from our conversations with executives, first of all, I want to point out some best in class. So what we mean by best in class is these are a couple tidbits that companies mentioned that we just thought were really interesting and really future thinking for different kinds of practices that they're using. So the first one I want to point out is, they're taking customer service practices from their business side, if they have a call center already for their business customers. And implementing those same types of practices in their HR shared service center, which just makes sense, very efficient, a very clever way to kind of use ideas that you're already driving and just bring them right into HR.
Another one is the head of employee experience. So we see a few companies appointing a VP level, so a high level head of employee experience, which just shows commitment to that for all your employees. Another one is the self-service kiosks, which were very interesting. So when we think about something like a portal, we assume that all employees are sitting at a computer. But that might not always be the case. They might be in different areas of the company, things like that.
So in the manufacturing or retail environment, those kiosks are really going to allow them to access that portal, as well as using the term, direct access. So we think direct access as compared to self-service, because we hear a lot that managers are maybe pushing back a little bit, that they're having to do more work that once was HR. So using the term direct access really allows them to understand that mindset shift of I'm getting the information I need, when I need it, rather than having to contact someone else or search around for it. So it's a slight tweak, but it really can make a big impact.
Quickly, just a couple of challenges and trends we looked at. So 50% of the companies talked about having to control the pace of change in their service center. So when their systems put out an update, they still have the control over that and getting better at how those things are rolled out. As well as 25% of companies, which we thought was really interesting, highlighted that onboarding is a focus for them.
So when it comes to the full employee experience, they're starting right away when someone's a candidate and how to make that first touch with the company as positive as possible. Directly related to employee experience is the idea of metrics. So when you have a call center, you're able to use those customer service metrics that you might use in that traditional environment. And 75% of the companies are doing that. We see again that 11% are not yet using metrics, which may be related to the fact, again, that they might not have that model in place.
46%, however, are starting to do at least a strong interest in service level metrics. So the two I want to point out here are using surveys. So just at the end saying, how was your experience? As well as pointing out, we heard a lot about trending topics and FAQs, so understanding what time of year it is and then highlighting a certain article or seeing what are people asking a lot and putting that right on the home page.
And then finally, we see 33% doing an emphasis on continuous improvement, so understanding different types of data, so qualitative and quantitative, looking at feedback, and then actually making real changes in response to that feedback, prioritizing them, and deciding the roadmap for the future based on what their customers or employees are saying.
A few more insights here. So some of our best-in-class were realizing whether an issue is due to the function of the system or due to the policy itself. So making sure you understand the root cause appropriately. A lot of the executives we spoke to have a target or percentage in mind and the ability to articulate those to us immediately on the phone really impressed us and showed us that those folks are striving for continuous improvement and setting those targets to meet. So you know we want to drive 80% self-service. Or we want to have a 24 hour turnaround time. We thought that was really great.
Also, following up directly with customers or employees, rather than just looking at data in aggregate, as well as doing pulse surveys. So a pulse survey is when you're in the system working on something as an employee. So you know, I'm updating my health insurance, and I get a one to two question survey about my experience as it's happening. Employees are much more likely to respond to those, because they are short and quick. So they're just another way to get feedback, which we thought was great.
One challenge we saw a lot was taking time to determine what those metrics are. So in HR, we always want to make sure that the metrics we're looking at are the right ones. And what are the goals and the outcomes we're looking for with those metrics? So not just putting in any, but kind of moving forward from those, as well as some of the trends.
So I mentioned doing something with the data as something that the emphasis companies were doing. However, many companies spoke about it. So it's certainly a trend to look at data and see what could we be doing. So companies are getting there, but they're at least talking about all this data that we have, how can we improve from it.
And this relates directly to predictive analytics. Many companies that we spoke to are thinking about predictive analytics, hope to get there, not quite yet there. But it's a big idea still in the field. And I think we'll see a lot more in that area in the years to come.
BETH FLYNN-FERRY: Terrific, well, that's a great start, thinking about the model as well as the center itself to share the findings there. We do have a few questions that have come in. And so I'm going to address a couple of them. A couple of them ask about definitions.
And we will provide a page of definition, so we're all in the same place as to what do some of the terminologies mean. So we will have that follow up. There's also a question on technology that we'll cover in a later section, as well as how does the service center interact with say the HRBP role. So we're going to save those to the later sections. Another one though, that came in, Catarina, was around, are there any areas of HR that companies are intentionally not putting into their shared service center. Could you talk to that?
CATARINA LEVITA SCHALLENBACH: Yes, yes. It's an interesting question. So there was one specific area that the companies mentioned to us, that they're intentionally not putting into the HR shared services, which is training and development. So they think they want to leave this area. They're still testing how their employees are learning and what is the way to learn. So they don't want to standardize the process now. And so they intentionally leave training and development out of the HR shared services.
BETH FLYNN-FERRY: Interesting. Another one, Danielle, for you, you know, we talk about employee experience a lot. And we all know from the Apple example of, you can't really ask people what they want because they don't really know that. How are companies figuring that out?
DANIELLE COLLIER: Another really great question. I think one of the main ways is really employing what we hear a lot about now, which is that agile methodology, so getting ideas in front of employees early and getting them involved in the process. So beta testing things, not being afraid to try something and seeing whether it's going to work out or not. Because as you said, employees don't often know how to articulate exactly what they're looking for.
But if you could put something in front of them and say, what do you prefer? Do you like having this button over here? Would you rather it be over here? Something as simple as that can make a really big difference in how employees look for and access things on your portal.
BETH FLYNN-FERRY: Terrific. We'll keep the questions coming. And with that, we're going to turn it over to Catarina to talk more about process and technology.
CATARINA LEVITA SCHALLENBACH: Great, what a great topic as well. So it was interesting that when we were asking the executives about technology, the answer was always related to process. So one executive said, technology cannot fix bad process, cannot and won't fix bad process, bad process, I'm sorry. The other one I mentioned about, you will have to bring any activity or any technology to HR shared services only if this activity or this technology is already standardized.
Let's not customize the technology to what we-- let's not customize our process to what technology can provide us, but the opposite. Let's design the process. Let's storyboard first, and then let's overlay the technology. So we decided to, we analyed the evolution of process and technology together.
So first, HR was a designed process for individual systems, so usually focused on buying best system on the market for each HR function. And then HR realized that they had several great systems. However, they were not integrated. And it was hard to integrate the data and looking to retrain them out in a more holistic way.
So then the second step, the move from having process for individual systems to having an integrated system, but with heavy customization. So HR implements one core system, following the business trend of having the ERP, an enterprise resource planning system. Then few other systems would complement this ERP, this main core one. However, in this model, there was a lot of customization.
Because we were buying the system and then customizing to our process and designing our processes. From having processes for individual systems to having an integrated system, there was one company that moved from 40 different systems to three different systems. However, with heavy customization, these had to change. And then, the companies moved to one process for one global cloud system.
So design a seamless global process first, and then overlaying the tech that is able to deliver the process that you want. So what the companies found is that it is-- so design those global process and bring in this global process first, and then localizing and customizing only a few things, usually because of legal requirements in the country. So we find also some trends. A rounded one, already the name says, the cloud.
So 72% of the companies, they are writing to the cloud, systems that are in the cloud. And all of the executives, 100% of them mentioned that moving to the cloud is important. So probably in the future, in the short future, this number is going to be 100%.
The second trend is the global versus local. So as I mentioned before, design the process global first, and then localizing them, usually because of some specific country legal issues. It's the important thing and what the companies are doing to the HR shared services. So 62% of the companies, they have already global process into the HR shared services. And they want to bring new processes or new functions, only if they are global, as well.
The third trend was very interesting. It's what we are calling global support. So we found that the two companies, they are choosing some specific centers to provide some specific HR function services. What does it mean? For example, one company chose Argentina to provide recruitment services, the recruitment function, the recruitment area. The services they are going to provide regarding recruitment is going to be to the whole world. So all the countries will contact the Argentina service center to give them recruitment process support.
So two companies are writing this model and we found it was really interesting. So talking about tech capabilities, we have to share with you what we found about the HR main, the core HR system, the HRIS. So 53% of the companies, they are in Workday, while 10% are in SAP. An the other 10%, PeopleSoft. And 7% of the companies, they have Success Factors as the main HR system.
Regarding case management systems, so case management system is the CRM, the customer relationship management system for the shared services. It's usually the ticketing system or technology share, technology management system. ServiceNow and in SalesForce, they were the main ones that are being used for the companies. ServiceNow with 23% and SalesForce with 13%.
In talking about tech capability, so what can the shared services provide to the employees around tech? So 87% of the companies, they are providing self-services portal. And many of the companies mentioned they are moving into that. So the employee can access the portal and find all the information that they need regarding the HR functions that are providing the HR shared services. And 46% are providing some type of-- are using automation to take all the repeatable tests that the HRBPs or the HRCOEs are doing in trying to automate them.
For example, sending of letters to candidates. So instead of having one person doing that, they automate it. And they are doing it through the HR shared services. Many companies, more than 50% of the companies, are looking into possible automations to do into the HR shared services. 41% of the companies, they are using some type of chat with employees. And 21% of the companies are using mobile, are giving mobile services. So it was interesting.
Many companies mentioned that this is something that the employees wanted. One company mentioned that they wanted to understand a little bit more. Who are those employees? How many employees really want to have mobile access? And it also, some industries and countries have some legal issues around it. So that's why some companies are not investing in mobile yet. However, they know the importance of that in the future.
13% percent of the companies are doing some type of robotics. Robotics is when they have a bot to fill in, for example, a form for them. It is a big trend. Almost all of the companies mentioned that they want to look into more detail into robotics to provide some robotics technology in the future.
And 8% of the companies already have chatbots or are testing their chatbots. Chatbots are robots, but with artificial intelligence. So they learn from what they are doing. And they are providing the service to their employees, as well.
So sharing some best-in-class challenges and insights with you around process and technology. So some best-in-class practices around systems is that some companies are using a system called Walk Me. So as the name says, their system, this tool walks the employee through, for example, when they are filling in a form and they don't know exactly what are the next steps. So this is live, showed to the employee live how to do it step by step.
So the companies are getting rid of using many manuals and doing that more interactive when you are using the system. Also, many companies are investing, a few companies are investing in some HR data warehouse. So they can use more analytics. And they can use more predictive analytics and do some correlations. So they are investing heavily in these HR data warehouses inside the HR shared services.
There are also some best-in-class processes which, for example, some companies as they are mapping and they're designing the global process, they are also mapping some opportunities to automate. So they are doing that side by side. And one company, for example, mapped already over 100 opportunities to automate.
And they're putting that into a roadmap of all technology improvements. So many companies, I mentioned, too, as we went to fully digitize HR, we put everything into a roadmap. And we're going to start doing that right now. There are some challenges, many challenges around technology, still. One that we found is to understand the appropriate use of artificial intelligence and chatbots, robots, and automation. There is a lot of confusion between those words.
So we are providing at the end of this presentation, there is an appendix with the explanation of each one of their meanings. But also gleaning resources and where to invest next in technology. So what is more important for the company now? And what will have the best impact?
There is also a lot of challenges still with data entry. So you can have the best system. However, if the information that you put inside the system is not correct, then you can analyze the data later and probably we're going to have a lot of integration problems. So one company, for example, is investing in artificial intelligence to audit the data that are inserted in each system.
There are still some problems with customization. So the company, they are still having to customize some processes because of, sometimes, legal issues. And then, when you update the system, then you have to update each of the customizations. So keeping an eye and trying to make as less as possible customizations.
And by that, also being agile. So the companies, several leaders mentioned to us that they cannot stop HR for eight months to do a huge change into a system. So they have to update the systems as we go, as they use them. So how to be agile and change this mindset, as well. And finally, one company only mentioned protecting data. But we thought it was really interesting. And it was important to show you as a challenge as well.
So as the information is in the cloud and as you use more mobile, how can you keep protecting the data of the employees in the company? So some insights, as I mentioned before, is to simplify the IT as much as possible and having one cloud system for core HR processes. It's important to have a diverse team to look into process.
So some executive mentioned, why are we designing a global process? Do not do that alone into your headquarters, but try to bring as much representation as possible, so you can do the best, you can design the best process. And finally, the maintenance of robots, especially the artificial intelligence ones, which they have to learn as they use. So you cannot just go live with a new robot if you don't keep updating and check if they're learning and so on.
BETH FLYNN-FERRY: Well, terrific. That was great information, Catarina, on the technology piece. And we do have a number of questions that are coming in now. A couple of people have asked, can you share a little bit more on maybe some examples of how companies are using artificial intelligence?
CATARINA LEVITA SCHALLENBACH: Oh, that's a great question. So I mentioned before, more companies are using artificial intelligence to audit the data that is inside the system. But we also have other examples, such as, there is a company, they are piloting, now, matching the candidates' capabilities with the job capabilities and the employees' capabilities.
So they are using artificial intelligence for the recruitment process. Also, there is another company that is using bots to send specific text messages around benefits to the employees. So they're using bots to learn what is happening and sending messages to the employees around benefits.
BETH FLYNN-FERRY: OK, great. Another question is, for companies using one global cloud system for all their HR, are they using it for all their HR areas? Or are they still customizing some of the areas and then integrating them?
CATARINA LEVITA SCHALLENBACH: Yes, they are still customizing some areas. So some companies, they mention and some executives mentioned there is no one vendor that can provide a holistic system with everything that they want for their processes. So that means that they are still customizing a few processes buying a few new other systems and integrating them. So yes, that is happening. But what we are also seeing is that the companies, the vendors they're providing systems. They're looking to more employee experience and trying to provide systems that will also support better the companies.
BETH FLYNN-FERRY: Great, terrific. Great, well, let's move now to Danielle. And she's going to share more about how HR shared services fits in with the HR team in general and future trends.
DANIELLE COLLIER: Great, thank you so much, Beth. So again, as Beth mentioned, we're really going to talk about HR shared services as it fits in with the overall HR organization. So I want to share with you this quote that we heard from one executive, which is that, "the systems are like the roof on your house. You don't want to spend money until the roof starts leaking. Our system, however, is the foundation of our house. We need to drive profit, not just keep the roof on."
So we thought this was a really salient quote. Because I think it really shows the transition from the model, from a more centralized, cost effective, standardized model to how are we really driving value and adding value to the business. So I thought that was really important. And as you can see, the way that the three-legged stool model has been set, really is set up to execute that structure.
So we see that policy in program design and strategy are happening in the COEs, as well as sometimes escalated questions, if there's something really specific from the shared service center. The HRBPs are still handling that face to the business and the connection and communication between HR and the business. And then the execution of those policies is happening in the shared service center.
They do the transactional work, as well as handle a lot of the employee experience activities that we discussed. The goals of the structure, as we mentioned before, are to really reduce that burden on HRBPs and COEs and drive those cost savings and try to pay for yourself, so add that investment to the company. As we look at how this execution happens, there's a couple of main things that we want to highlight.
So there's a very strong partnership that many companies talked about between the COEs and the shared service center to drive that execution. So a few points are communicate early, listen, and consult. We heard many companies talk about this role of being a consultant. So asking good questions, being involved early on in the process, and making sure that you're there every step of the way to listen to what the COE employees are saying and really be a strong partner and consultant in those activities.
We heard examples of both formal and informal partnerships. So some companies have employees that sit in both areas. So technically they wear two hats. So actually, I work for the comp COE, but then I'm also in the shared service center. And we also heard about more informal partnerships. So companies spoke about how we don't have designated titles that might fit that. But we have a very natural working model. And we know that we couldn't be successful if we weren't doing those activities.
So it was interesting to see the two different areas, but how different things work for different companies. When we think about governance, similarly, we saw a lot of different examples of governance. But we heard a lot about some sort of scheduled meeting, whether that be monthly with a committee or bi-weekly or weekly phone calls, things like that.
So this is really to help fill in gaps and spot those watch-outs before they happen. So as you're implementing a policy, you've already thought about those things ahead of time. This also helps when you designate process owners. So have a global process owner for one process. And that person can then realize, if we're changing something about the process, since I'm an expert on it, I'll know exactly where that one change might affect other processes and other things in the system.
Another thing that's really important is to clearly delineate roles and responsibilities. And you want to do that early. Because then when changes happen and things are going in and out of the service center, who owns what, you've already defined those roles and responsibilities ahead of time. So there's no confusion over who's supposed to be responsible for different activities.
We heard a lot of different challenges from our executives about the overall HR organization and the structure of the three-legged stool as it related to shared services. So one of the big ones was that HRBPs and COEs are kind of scared that their jobs might go away. But I think the main thing to keep in mind, here, and again, as we heard from a lot of the executives is that we're just trying to focus the work where it makes the most sense and will give us the most bang for our buck and execution in HR.
Another thing we heard was that more services might equal more staff. So we think it's pretty easy to just assume that since we have all this great technology, we can just throw things in the system and it'll work. But sometimes that does require more people in the shared service center and therefore more investment. So just something important to keep in mind.
Another one was governance, once you implement a new model. So it's easy, again, to kind of set it all up, hope it's going to work great. But you can't just kind of let it run on its own. There needs to be a strong governance model in place to ensure that things continue to work smoothly once it's there.
We did keep hearing about the global business services environment. So interestingly, we heard from companies that HR, because of the nature of HR, so you're working with your employees, as compared to something like finance or legal, could not be a great candidate for global business services, as compared to other companies who are definitely saying, of course, it is. It's certainly fits in with this. So just another challenge that they're running into.
Another big one was vendor management. So as you're working, whether it be one global system or several smaller ones, you're going to have different vendors doing different things with different service level agreements and providing those experiences to your employees. So vendor management is a big skill and something that I think we're going to continue to see a lot of.
Speaking of skills, these were the top six that our executives mentioned as most important for their shared services employees working in HR. So customer focus was the biggest one at 56%, followed up with problem solving and really getting to the root cause of different issues when employees contact them in the service center with 49%. Surprisingly, we only heard technology from 33% of companies. But those that didn't mention it, did explain that they think that most employees coming into the service center in 2017 do have a level of tech savvy that is needed. So it's not necessarily a high-level skill that they're really looking for. They think most people do check that box, which we just thought was interesting.
Another best-in-class that we heard from a couple of companies was that they're using shared services as a starting point for their more junior employees. And this is a really great idea because they get that breadth and depth of knowledge about different areas of HR from sitting in the service center. And they get to interact with employees every single day. So it can really help create the right mindset for an HR employee to then move on to more senior roles.
Sorry, I'm going to go the next slide. So finally, as we look to the future, these were the biggest trends that our executive mentioned over and over. So technology came up in over 50% of the companies. And they're actually trying to go through different changes in technology. An important thing to keep in mind here that we heard from executives was, what technology is right for us and when?
So on the one hand, you don't want to be behind in your technology offerings. But on the other hand, it's not something you can just throw into place and hope that it works, so making sure that you're making those investments carefully. As well as the inclusion of more complex functions, again, similar to technology, you want to make sure that the functions that you're putting into the service center are a good fit, so actually a good fit for the center and are repeatable.
But at the same time, sometimes it can be seen as a risk to put in a more complex function, but shooting for excellence and saying, is this repeatable? Is this something we could use automation for and not be afraid to try that with all the technology that's out there? We also see a huge push/pull with outsourcing.
So understanding should we do more outsourcing or less? And we just heard both from different companies. So it'll be interesting to see where that goes in the future as vendors become more equipped to handle these things. And then at the same time, companies are more focused on employee experience.
Global business services, as I just discussed, whether or not HR is a good fit for that, as well as this war for global shared services talent. As Catarina pointed out early on in the presentation, the countries where these shared service centers are located are starting to become more concentrated. So there's going to be a little bit more of a war there for the talent in those locations to work in your service center. So you want to get that top talent, obviously, to provide the best level of service to your employees.
BETH FLYNN-FERRY: Terrific.
DANIELLE COLLIER: I will take more questions.
BETH FLYNN-FERRY: Yeah, we've got about four minutes left. That's the content of the presentation. So we'll take a few more questions. I've got some here. A couple of people asked about older generations or your manufacturing base employees who may not have the same access to technology. And for those folks, can you talk to maybe how to get them involved or the change management plan to make sure that technology is accessible for them as well?
DANIELLE COLLIER: Yeah, definitely. I think something that we heard from a few companies that still have a large manufacturing presence is this kind of fourth addition to the three legged stool, which is what they're calling field HR. So there's an HR person still on site at, for example, a plant that would be dedicated to those employees. And I think that because of the environment that they're in, that's actually very important when it comes to change management, so still having a face to that HR.
And I think that's another area where those self-service kiosks that we discussed really come into play. So allowing them to still be able to access the same information as other employees. And I do think this is an area where mobile could become a much bigger presence. So even though we talk about older generations, they still have a smartphone in their pocket. So how can we get them to access that through mobile? It could be another really interesting solution.
BETH FLYNN-FERRY: Terrific. Here's another one. Any advice for making a business case for standardizing business processes and limiting customization, knowing that your COEs are going to want to offer maybe the best technology and not stick to the cloud technology that you may be on?
CATARINA LEVITA SCHALLENBACH: So that's an interesting question. And we believe that there is one thing to-- moving into this cloud and doing less and less customization, it's being agile when things change. So there is some systems twice a year that provide new updates. So if you have a lot of customization, you cannot do the updates. Because it would take time to make all the integrations with the customization as well.
So the investment, you have to do every time that you need to update. And you see the evolution of technology is really fast nowadays. So there is a lot of investment to do if you have customization. As well as, if you are talking about integrating data, if you are customizing a lot, you have to do all those integrations with data to use the data later. So it's not only enough to have a data system, but to have the data available all the time. So I think that you can build a good business case if you show the speed of technology change and the cost of updating all of that, as well as the data being available when you need them.
BETH FLYNN-FERRY: Yeah, I think another thing that you guys heard, as well, was if you involve some of your COE leaders on your governance team, that helps them really understand how difficult it is to integrate outside systems and the cost and the length of time and training employees to use those, et cetera. And so I think that's another good tip to help with your business case, there.
And one other good tip, there, was asking why the current system wont work. Can you prove why it won't work or how it would add to the bottom line? One more question here, Danielle, what are the main drivers for the push/pull of outsourcing? So why are companies moving things in and out of the model?
DANIELLE COLLIER: Yeah, that's another interesting one. So we heard from companies that are, for example, trying to move to more outsourcing. If tasks are so repeatable and can be done by automation and robots, then perhaps we should take that to the experts. So take that to an outsourcer where that's all they do.
And they can really drive more cost savings for us. Because they're great at it. So they can still provide that great employee experience, that great service that we expect from our other outsourced vendors. And then we can do more of our strategic work in-house that's more customized to our company.
On the other hand, some companies are pulling it back in, I think, for kind of a similar reason. So they think that the employee experience that they're providing in-house is going to just be, there's no way than an outsourcer could know their employees as well as they do, know the level of service that they need. So it's much easier for them to then make changes, as we just discussed, make tweaks on the fly, to their systems when they own all of it, when they own everything inside and they can make it exactly how they want it for their company.
And with technology today, it's much easier to customize in that way, rather than customizing your data on the back end. You can make customizations very easily on the front end. So making it just for employees, just for our company. So I think those are the two main drivers of that. And it will be really interesting to see where it goes in the future.
BETH FLYNN-FERRY: Sure, thanks. Well, thank you very much for dialing in today for the webcast. This is our last one of 2017. But we will have six scheduled for 2018. I'd like to thank the CAHRS RAs for their terrific work here and wish you all a happy holiday season, thank you.
SPEAKER: This has been a production of the ILR school at Cornell University.
ILR's Center for Advanced HR Studies research assistants present their research on HR Shared Services.
Following the transformation of many companies to a strategic HR operating model, organizations are now shifting their focus to optimizing the model, especially in the area of HR Shared Services (HRSS) and Operations. HRSS is going through its own transformation, evolving from a focus on effectiveness and cost reduction to the improvement of employee experience and revamping and leveraging technology to create a seamless experience in support of their business. Main areas of interest include identifying or increasing the scope of HRSS, the trends shaping the future of work, and other challenges that are pushing HRSS towards an agile provider of business solutions. Moreover, as companies advance on new models and solutions they require a set of new HRSS capabilities, skills, and competencies.
