Updated 4/1/2021
Over the years, HR transformation initiatives have had varying levels of success. Today, however, organizations are successfully transforming HR by deploying a multi-tier HR service delivery model. By placing heavy focus on a successful "Tier 0" – where employees, around 60-75% of the time, get their own answers to HR questions and complete their own transactions – employers are able to deploy cost-effective HR shared services models.
The multi-tier approach helps reduce escalations to HR experts by more than 70% – freeing talent to take on more value-added projects. By deploying Software-as-a-Service-based technologies required for the multi-tier model, solutions can be implemented quickly with a low total cost of ownership. So, what is the bottom line? With this model, employers can actually increase employee satisfaction with the way in which HR delivers services – while, at the same time, reducing HR service delivery resource allocation and lowering costs.
What We Mean by HR Transformation ?
Human Resources transformation is not a new concept. It has seen much iteration for the past few decades.
Often, HR transformation is associated with digitization of processes, workflows and actions. But HR transformation is larger than just this digital component. Simply put, HR transformation is a series of programs and initiatives designed to transform HR from a largely tactical and administrative function to a more strategic operation, providing value closer to the business unit level in areas such as human asset management, training and learning, compensation planning, succession planning, goal alignment, pay-for-performance, workforce analytics and more.
An underlying assumption to these projects is that the strategic goals will be achieved by minimizing the people resources and costs dedicated to the administrative functions associated with the delivery of HR services. And while many mid- to large-sized organizations have taken on HR transformation initiatives – the success of these programs varies widely.
Challenges to HR Transformation Success
Self-service and portal technologies are only part of the solution. To relieve the administrative burden on HR, many employers have implemented employee portals and/or self-service systems. The initial idea was that if employees could use a portal to get information and then complete their own transactions via self-service, calls to HR would be minimized – leaving HR to perform the strategic work required for transformation.
And while these solutions have certainly reduced administrative work, they don’t eliminate it entirely. To successful integrate with the system there are a few things that are still required.
- Consistent communication throughout the process.
- Use of decision support tools required to complete transactions.
- Create searchable, single sources of truth to many HR related questions.
If portals and self-service are not easy to use – employees will give up and call HR.
Does this mean that portals and self-service investments were made in vain? No, but they require additional components – such as single sign-on and an integrated knowledge base – to maximize their effectiveness.
Human Resource Talent Mix
Many organizations either do not have the right mix of HR talent to achieve transformation. In some cases, the field HR person who formerly performed mostly administrative functions does not have the skills or there is a lack of resources to retrain the person to perform the more strategic work, such as analyzing workforce metrics. In others, the right talent still spends too much time on administrative work to be truly effective. In its 2008 paper, "Leverage a Multi-Tier HR Service Delivery Model to Improve Efficiencies," Gartner stated that most HR talent spends 70 to 80%of their time on administrative work. In 2015, G&A partners estimated that number to still be around 73%. More and more employers are, however, overcoming these challenges – and economy-driven mandates HR teams "do more with less" by using the multi-tier approach to HR service delivery.
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The Multi-tier Approach to HR Service Delivery
There are many versions of the multi-tier model, the most common being a three-tier approach:
Tier 0: Employees and managers answer their own HR questions and complete transactions via a portal and self-service systems. Today, some employers have reached 80 to 90% Tier 0 usage when deploying the model "best-in-class".
Tier 1: With widespread adoption of Tier 0, far fewer inquiries rollover to Tier 1 – the HR shared services center or help desk – with a majority of those inquiries being resolved on the first call.
Tier 2: In this model, then, the time that centers of excellence spend doing administrative work associated with employee inquiries is reduced by 70-80%, freeing up a great deal of time to be focused on people and processes that drive the bottom line.
While help desks and/or call centers qualify for Tiers 1 and 2 – there can often be redundancies across business units, which is why, for maximum efficiency, many organizations have opted for the HR shared services model.
Shared Services refers simply to the consolidation and sharing of services by different units or locations within an organization. Shared services approaches typically are driven by the desire to achieve economies of scale, enhance consistency or standardization across the organization, improve quality, leverage technology investments, manage labor costs within certain functions and provide greater value to the business.
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