IDS HR Study 835, December 2006

HR service centres

• Considers the advantages of separating out HR administration from more strategic work and of standardising and centralising this activity in an in-house HR service centre
• Covers issues such as managing the transition, staffing the service centre and the role of technology
• Features details of HR service centres in operation at seven named organisations

Many employers have sought to streamline and centralise their routine HR transactions and processes in an HR service centre. The service centre is often the lynchpin of a company’s efforts to move towards a more efficient HR function. It also tends to act as the focal point for handling HR enquiries from line managers and employees. The service centre often operates alongside an HR intranet and employee self-service.

Among the benefits of this model are cost savings from lower transaction costs and the need for fewer staff, a greater consistency of approach across a company to HR matters, and a more responsive service from HR that is better aligned to overall business goals.

Setting up an HR service centre can be a complex and time-consuming undertaking, particularly in organisations where many different HR practices have hitherto been the norm. The concept needs to be clearly defined and communicated and the transition process carefully planned. Drawing on the experience of the featured companies, we give some tips on how best to ensure the smooth operation of a service centre.

The publication includes detailed case studies of the HR service centres at: The National Trust, Ernst & Young, Cable & Wireless, Sky, Transport for London, Britvic and the Learning and Skills Council.