HR Shared Services Benchmarking

Study Highlights
ScottMadden and APQC HR Shared Services Benchmarking Study

October 2019

Copyright © 2019 by ScottMadden, Inc. All rights reserved.

Introduction

About the Study

History and Timeline
n First cycle – Fall 2011 Delivery Model &
Staffing
n Second cycle – Fall 2012 Operations
n Third cycle – Fall 2013 to Winter 2014 SSO Management
n Fourth cycle – Fall 2015 to Winter 2016 Performance Infrastructure and
Technology
n Fifth cycle – Spring 2017 to Summer 2017
n Sixth cycle – Spring 2019 to Summer 2019 46 Metrics
29 Qualitative Questions

A few topics were added this cycle to assess adoption of artificial intelligence or intelligent automation
applications, robotic process automation maturity, and payroll services within HR.

Copyright © 2019 by ScottMadden, Inc. All rights reserved.

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Introduction

Metric List
n Total customers (employees + retirees) served per total HR headcount n Total company employees served per North American HR shared services center
n Total company employees served per total HR headcount workforce administration specialist headcount
n Total company employees served per HRIS headcount n Total company employees served per North American HR shared services center
training administration specialist headcount
n Total company employees served per continuous improvement headcount
n Total company employees served per North American HR shared services center
n Total company employees served per HR business partner headcount
leave of absence administration specialist headcount
n Total company employees served per HR generalist headcount
n Total company employees served per North American HR shared services center
n Total company employees served per HR administrator headcount employee relations specialist headcount
n Total company employees served per field HR headcount n Total North American HR shared services center cost per employee
n Total company employees served per talent acquisition CoE headcount n Total North American HR shared services center cost per customer (employees +
n Total company employees served per talent management CoE headcount retirees)
n Total company employees served per compensation CoE headcount n North American HR shared services center in-house cost per transaction
n Total company employees served per benefits CoE headcount n North American HR shared services center in-house cost per call/inquiry
n Total company employees served per employee and labor relations CoE n Number of employees served per service center employee
headcount n Number of retirees served per service center employee
n Total company employees served per payroll CoE headcount n Number of employees served per tier 1 headcount
n Total company employees served per payroll processing employee headcount n Number of employees served per tier 2 headcount
n Number of employees served per HR shared services organization employee n Number of tier 1 employees per tier 1 manager/supervisor
n Number of retirees served per HR shared services organization employee n Number of tier 2 employees per tier 2 manager/supervisor
n HR service center employee turnover for North American shared services center n Number of transactions per service center employee
n Average speed to answer for North American HR shared services center n Number of calls/inquiries per service center employee
n First contact resolution for North American HR shared services center n Self-service transaction volume per 1,000 employees served
n Portal hits per 1,000 employees for North American HR shared services center n Self-service inquiry volume per 1,000 employees served
n Total requisitions per North American HR shared services center n Tier 1 transaction volume per tier 1 headcount
recruiting/staffing specialist headcount n Tier 1 call/inquiry volume per tier 1 headcount
n Total hires handled per North American HR shared services center
n Tier 2 transaction volume per tier 2 headcount
recruiting/staffing specialist headcount
n Tier 2 call/inquiry volume per tier 2 headcount
n Total company employees served per North American HR shared services center
recruiting/staffing specialist headcount

Copyright © 2019 by ScottMadden, Inc. All rights reserved.

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 About the Study

Participant Demographics
Our benchmark study includes data on shared services operations (SSOs) across revenue ranges,
industries, and operating maturities. The majority of participants come from mature SSOs.

Organization Revenue Employees Served Industry

>$20B 19% >100,000 5% Services 13%
$15B to $20B 7% 80,000 to 100,000 1% Industrial Products 10%
$10B to $15B 9% 60,000 to 80,000 8% Consumer Products/Packaged Goods 10%
$5B to $10B 21% 40,000 to 60,000 9% Financial Services/Banking 9%
$1B to $5B 38% 20,000 to 40,000 19% Healthcare 8%
$500M to $1B 5% 10,000 to 20,000 27% Retail and Wholesale 7%
<$100M 1% <10,000 31% Electronics 7%
Pharmaceutical 7%
Maturity Service Center Location Utility 7%
<1 year, 3% Insurance 5%
1 to 3 years, LATAM, 3% MEA, 2%
Petroleum/Chemical 4%
15% >10 years, APAC, 15% Automotive 4%
32%
Media and Entertainment 3%
Distribution/Transportation 3%
3 to 5 years, Europe, Telecom 2%
21% 17% U.S. & Mining 2%
5 to 10 Canada, Aerospace 1%
years, 29% 63%
Rental 0%

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Highlights from Latest HR Benchmarks

Service Delivery Model and Governance

More organizations are using a tiered approach as part of their service Use of Tiered Model
center staffing model
n Tier 1 median staffing is 1:545 relative to employees served
n Tier 2 specialist roles are heavily utilized, and top performers show higher
staffing at Tier 2 versus Tier 1 84%
A decreasing number of organizations indicated reporting to corporate
HR/lead HR executive

Which best describes the governance model for your HR shared services organization?

13% 14% 19%

7% Other
21%
40% HR SSO reports to another non-HR executive
24% HR SSO has a matrix reporting relationship to HR and multi-function SSO
79%
45% HR SSO reports to lead of multi-function SSO
35%
HR SSO reports to corporate HR/lead HR executive
2015 2017 2019

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Highlights from Latest HR Benchmarks

Staffing – Tier 2 Specialists

Among Tier 2 specialist groups, workforce Median Number of Employees per
administration and employee relations groups Service Center Specialist Headcount
show the highest staffing levels, while training
administration and leave of absence
Recruiting/Staffing 3,200
administration groups show the lowest staffing
levels.

Workforce Administration 2,261

Training Administration 4,750

Leave of Absence Administration 5,050

Employee Relations 2,363

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Highlights from Latest HR Benchmarks

Staffing – CoEs
More than 80% of SSOs employ CoEs as part of Median Number of Employees per
their model. Staffing levels vary by type of CoE, CoE Headcount
but talent acquisition and employee and labor
relations CoEs generally show higher staffing
levels relative to company employees. Benefits 4,258

Use of Centers of Expertise

Compensation 4,000

Employee and Labor Relations 3,100

86%
Talent Acquisition 1,086

Talent Management 3,438

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Highlights from Latest HR Benchmarks

Staffing – Field HR
Shifting transactional work to service centers Median Number of Employees per
and/or leveraging technology enables field HR to Field HR Headcount
operate more efficiently. Top performers show
lower use of the field HR administrator role and
lower total field staffing. Total Field HR 413

HR Administrator 1,056

HR Generalist 1,400

HR Business Partner 3,089

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Highlights from Latest HR Benchmarks

Global Operations
78% of participants reported Geographic Model
using a GBS model
n 10% have a single global center
n 20% have regional centers with
68%
of participants have regional
global management and or country-specific centers
integration with global management
integration
n 48% have site/country-specific
centers with global management
and integration

10%
of participants operate with
22%
a single global center of participants have a non-
GBS model, including
regional centers run
independently, country-
specific centers, or other
geographic model

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Highlights from Latest HR Benchmarks

Global Operations (Cont’d)

North America has been the primary focus of our study and therefore remains the top location,
followed by Europe.

Service Center Location by Region Top U.S. Locations Top Global Locations
Europe
U.S. & Canada n Chicago, IL n London, United Kingdom
17% MEA n New York, NY n Hong Kong, Hong Kong
63% n Charlotte, NC n Dubai, United Arab Emirate
APAC
2% n Atlanta, GA n Shanghai, China
LATAM n San Francisco, CA n Melbourne, Australia
15%
n Philadelphia, PA n Mumbai, India
3%
n Houston, TX n Hyderabad, India
n Seattle, WA n Gurgaon, India
n Denver, CO n Prague, Czech Republic
n Los Angeles, CA n Bangalore, India
n Dallas, TX n Dublin, Ireland
n Milwaukee, WI n São Paulo, Brazil

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Highlights from Latest HR Benchmarks

Staffing – Service Center

Total service center staffing across global regions varies, and the overall median is nearly 200
employees per service center headcount.

Number of Employees Served per Service Center Employee

400
Top Quartile

300

257
Median
200 205 204
175
151

100
Bottom Quartile

0
US & Canada Europe Asia-Pacific Africa & Middle East Central & South
America

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Highlights from Latest HR Benchmarks

Technology Standardization
Half of the participants have fully standardized to a single solution for HRIS and customer care tools.
Global SSOs show slightly less standardization of payroll technologies compared to HRIS and Service
Center/Customer Care technologies.

To what degree are your technology platforms standardized across your global centers?

HRIS 51% 27% 22%

Payroll 47% 28% 24%

Service Center/Customer Care 52% 26% 21%

Single instance used across all centers (full standardization)

Common tool used but different configurations for centers or regions
Multiple tools used with some centers using standard tools
No common tools or standardization

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Highlights from Latest HR Benchmarks

Intelligent Automation
More than 40% of SSOs reported having implemented or are piloting IA applications within their
service center. Another 35% are thinking about using.

To what extent does your shared services center use intelligent automation applications?

Implemented Consumer Products/Packaged Goods

By Industry
17% Insurance
Retail and Wholesale
Healthcare
Industrial Products
Conducting Pilot to Validate Utility
Pharmaceutical
24% Automotive
Electronics
Financial Services/Banking
Thinking about Using Petroleum/Chemical
Services
35%
Utility

By Size Serving more than 50,000 employees

Not Using Serving 10,000 to 50,000 employees
24% Serving 5,000 to 10,000 employees
Serving less than 5,000 employees

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Highlights from Latest HR Benchmarks

Intelligent Automation (Cont’d)

Among organizations who are harnessing the power of IA, the majority are using desktop automation
for simple transactional data or use rule-based RPA for structured data.

Which of the following best describes your HR organization's maturity with regard to process automation?

AI-Based Cognitive Automation Consumer Products/Packaged Goods

By Industry
6% Insurance
Healthcare
Retail and Wholesale
Knowledge-Based Autonomic Process Automation
Industrial Products
9%
Automotive
Pharmaceutical
Rules-Based Robotic Process Automation Financial Services/Banking
20% Services
Electronics
Utility
Desktop Automation
Petroleum/Chemical
29%

By Size Serving more than 50,000 employees

Do Not Use Automation to Any Significant Degree Serving 10,000 to 50,000 employees
36% Serving 5,000 to 10,000 employees
Serving less than 5,000 employees

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Highlights from Latest HR Benchmarks

Intelligent Automation (Cont’d)

40% of participants selected research/analytics/reporting as a purpose of using IA, followed by 39% for
call center replacement/augmentation via chat bots or virtual agents.

For which purposes are you using intelligent automation applications?

Research/ Call Center

Analytics/ Replacement/ Prescriptive Document Layout Predictive
Reporting Augmentation Solutions Recognition Forecasting

1 2 3 4 5

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 Highlights from Latest HR Benchmarks

Intelligent Automation (Cont’d)

Lack of executive support was rated as the top challenge in adopting IA or cognitive capabilities,
followed by availability of skilled resources or technical expertise.

1. Lack of executive support

Availability of skilled resources or

2. technical expertise
Main Challenges in Adopting
Artificial Intelligence or Lack of organizational buy-in/readiness/
Cognitive Computing 3. cultural fit
Capabilities
4. Degree of partner or stakeholder readiness

5. Degree of customer readiness

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Highlights from Latest HR Benchmarks

Payroll in HR
Within which function are payroll services
located within your company?
How are payroll services delivered in Finance? How are payroll services delivered in HR?
Service Center(s) Service Center(s)
69% 57%
Finance,
Center of Expertise Center of Expertise
32%
46% HR, 68% 72%

Other Other
6% 0%

Total Company Employees per

2,310
Payroll Processing Employee Headcount

Total Company Employees per

5,143
Payroll CoE Headcount

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Bottom Quartile Median Top Quartile

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Top Performer Analysis

Who Are the Top Performers?

An analysis of top-performing organizations Top-Performer Group Comparison Group
across key metrics in the study was used to
identify common characteristics. Top performers: SSO Maturity

71%
n Are more mature
n Are larger entities in operation 59% in operation
for five or more years for five or more years
n Have fewer centers (less distributed)
n Use a tiered approach Number of Employees Served

n Have higher use of Tier 2 specialists

n Remove administrative work from field HR
38,215 employees served 28,598 employees served
n Use more robust portals
n Use more self-service Number of Centers in SSO

1.3 centers within SSO 2.0 centers within SSO

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Want to Find Out How You Compare?
n Contact us at info@scottmadden.com
n Sign up to be notified of our next cycle

n Unique benchmarking study

n No cost to participate
n Receive detailed report of all metrics and qualitative
results
n Peer group comparisons are provided where relevant

Copyright © 2019 by ScottMadden, Inc. All rights reserved.

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