In the last few years, companies aiming to reduce the cost of certain central functions – such as finance, HR and processing – have increasingly turned to shared service centres (SSC) to reduce internal overheads through eliminating unnecessary duplication and improving process efficiencies. SSCs achieve this by standardising technologies, simplifying processes and consolidating or eliminating redundant resources, and there are many implications for recruitment and retention specific to implementing the SSC concept.
• Change vs efficiency
• Communication between SSCs and the business
• Identifying staff
• Retaining staff
• Going forward: outsourcing
Location is key. When setting up an SSC, the organisation needs to evaluate the skill set of the local workforce, in the context of whether it can help achieve the desired service levels and cost savings – although cost is just one of the factors to consider. Others include:
• Transport links – existing and future
• Technical skills – What other industries are there (or have there traditionally been) in the area? Is there potential for retraining? Can skill sets be sustained?
• IT literacy
• Linguistic ability (if relevant)
• Level of funds/grants available for inward investment
• Ability to deliver complex technology
• Availability of R&D facilities
• University base (if relevant)
• Availability of modern telecoms
• Other employers (competition for staff)
Change vs efficiency
Significant organisational changes – such as a new location, new and unfamiliar systems, wholesale change of personnel and redundancies can all conspire to adversely affect morale and efficiency. Introducing balanced performance measures can have an immediate and positive effect, with improved decision-making based on factors such as customer service, employee morale and competitor comparisons. When staffing an SSC, organisations need to accept that they will lose some people fairly quickly, usually those who fail to adjust to change. Group inductions, careful integration of new people with those used to the old regime, regular communication and feedback or meetings to reaffirm the objectives of the SSC concept all help to combat attrition caused by negativity.
Communication between SSCs and the business
Critics of SSCs say that centralising certain support functions distances the people managing those functions from colleagues who are end users of their services. Making occasional appearances “in the field” is a good way of getting over perceptions that SSC employees are somewhat ivory-towered and out of touch with business reality. In this respect, it’s important for SSCs to be represented not just by senior managers but also by those actually delivering advice and information. Likewise, inviting “customers” to the SSC on a regular basis to see how things happen and demonstrate savings and efficiencies, creates a more productive relationship. Vehicles such as monthly bulletins and intranet updates are also simple but effective.
Organisations creating SSCs face a number of staffing challenges, not least to make themselves attractive to potential employees. Promoting the SSC and the organisation as an employer of choice requires careful research into the local labour market – a who’s who of employers, where they’re based and their remuneration structures (including not just salaries and bonuses but benefits such as on-site facilities, discounts, gym memberships and car parking).
When marketing to potential recruits, organisations need to be mindful of misconceptions amongst potential candidates. Managers may be wary of losing ownership of processes, and concerned about divided loyalties between the SSC itself and the business units being serviced. Junior recruits worry about “just being a number” and need to feel that targets and deadlines will be realistic, while repetitive work will be offset within a happy team environment. Promoting job variety (including rotations) and clear progression is also key.
Getting the right mix of staff in the SSC is important; as well as graduates and high flyers, some employers have focused on older, more experienced people not necessarily seeking a fast-track career, as well as individuals returning to work and those who would consider less social working hours.
If not managed properly, the initial hype – getting the numbers in, the mass excitement and novelty of lots of people starting new jobs and going on training – can fade away rapidly, although turnover levels vary considerably across sectors and regions. As part of retention awareness in general, key milestones are at the end of the first two week’s employment, the first quarter and nine months into the first year – at which time staff need to be reviewed, informally or formally as appropriate.
When structuring such a strategy – particularly for those skill areas where it’s difficult to recruit – it’s essential to identify why those employees are leaving, and quantify the actual turnover figures, against which the success of retention methods can be measured. However, obtaining accurate reasons for leaving can be tricky – for an exit interview to be worthwhile, it needs to be conducted shortly after the employee has handed in his notice, ideally by someone other than the immediate line manager. Confidential “attitude surveys” including questions about intentions to leave are an alternative, along with questionnaires sent to former employees six months or so after departure. Feedback such as this, while sometimes making for uncomfortable reading, can be invaluable.
There are some positions where it can be practical at the recruitment stage to give potential joiners a “job preview”, helping to manage expectations prior to commitment. Regardless of the feasibility of this, making sure that new joiners receive sufficient induction training helps minimise numbers leaving within their first six months.
At some SSCs, team leaders who have a good record of staff retention are rewarded (with bonuses and more benefits), while those less successful are given refresher training in simple retention techniques.
Opportunities for employees to progress and develop their skills and progress need to be maximised. By the nature of many SSC positions, promotions are not always feasible for all, in which case “sideways” moves can vary experience and make jobs more interesting.
Giving employees a “voice” through consultative bodies, appraisals, attitude surveys and grievance systems is another way of promoting a happy work environment. How shifts are allocated is also important; one of the perceived “selling points” of working in SSCs is the flexible working hours offered – but only when people are able to work times that suit their domestic arrangements.
Clearly, all organisations should strive to ensure that they do not discriminate against employees on unfair grounds – whatever the reality is from management’s perspective, this is often a major reason for leaving. While pay rarely plays a significant role (unless way below market rates), perceived unfairness in the distribution of rewards and benefits can lead to resignations. Lack of progress and inflexibility both contribute to high attrition levels – but the good news is that solutions do not necessarily have to be costly or time-consuming, and results can pay off fairly swiftly.
Going forward: outsourcing
Many SSCs outsource recruitment, although different approaches are required depending on the centre’s stage of advancement.
Start-ups ideally require a project management approach, with one provider managing the recruitment process. A resource manager from the employer works closely with a dedicated agency account management team that acts as an extension of the SCC, as first point of contact for potential employees. This brings the advantages of a transparent agreement, with both parties working towards a common goal, as opposed to the traditional client/supplier model. There can be openness about recruitment budgets, the two parties can create attraction strategies and work together on joint advertising and internet campaigns, as well as developing a supply chain. This “big bang” approach encompasses co-ordinated online and offline sourcing, agency consultants on the ground talking to candidates and specific database activity. All applicants are processed in the same way, whether direct applicants, advertisement response, referrals or internal applicants.
For SSCs hiring on an ongoing basis (after the initial start-up period), activity tends to reduce and settle, while recruitment moves to more traditional methods. Suppliers will often move back to contingency recruitment, while still having key account managers fielding vacancies.
Partnering with an agency limits the supply chain to a certain extent, with the employer relying on just the one supplier – however, the role of the agency is more often based around processes as well as actual resourcing. Partner agencies in these circumstances manage the supply chain (ie other recruitment agencies), ensuring that all applicants, regardless of where they were initially screened, go through the same process.
Looking forward, the partnership approach is going to be more key for both agencies and employers. It’s likely that the length of the “big bang” period will lengthen as employers work to tackle attrition issues and retain the knowledge built by their staff. Within this context, pricing is moving more towards a risk/reward model, based on the meeting of project objectives, not just placement fees.
But in the long term, SSCs are certainly expected to become an even more popular solution with large, multi-site or global organisations, while recruitment strategies will be refined and tailored accordingly.