Lace Partners & Neocase: Double Expertise for a Single Perspective.
In April 2024, Lace Partners released its annual HR Shared Services Trends 2024 Report. This valuable report, based on a survey of dozens of companies using this operating model, outlines the major trends in the different types of SSC (Shared Service Centers) organizations, the evolution of service catalogs, the benefits, and the digital implemented innovations.
Neocase, pioneer and leader, with over 15 years’ experience in this field and hundreds of SSCs under its management, has been developing a digital HR shared services management solution since 2006. The Lace Partners report is in line with the observations and trends of large companies with SSC managed by Neocase.
As part of the exchange of expertise between Lace Partners and Neocase, both companies felt it would be useful for Neocase to share knowledge gained on the projects implemented throughout the years, for its numerous customers.
Observed Objective: Increase Productivity Without Sacrificing Experience.
Lace Partners explains that the “main objectives” of Shared Service Center managers are always the trio:
- Operational efficiency,
- Employee experience improvement,
- Digitization/Automation.
This result is also observed in the Neocase experience. For the past 4 years, when Neocase visits its customers, the HR operations manager responsible for operational efficiency is not alone. At their side sits a manager with a function that appeared after 2017: “The Employee Experience Manager”, whose concerns in the context of HR Services correspond to all interactions between the employee and HR, their career path, their engagement and their development.
These two essential objectives are supported by the third, “digitization,” and in particular thanks to the opportunities brought by AI in personalization and automation. Whereas the post-covid years were associated with the great resignation, quiet quitting and, in recent months, the global economic downturn, Neocase observes that the Shared Service Center is becoming strategic for cost reduction (18% -> 27% in the report). Operational efficiency directly linked to cost reduction is taking over from the employee experience in terms of priorities. However, the challenge remains to combine both goals: “how to improve operational efficiency and employee experience.” This observation is global, not only in Europe but also in North America.
Digitizing Global Growth with Ongoing Disparities by Sector and Territory
Neocase also observes that the service catalog of companies is expanding, although this varies according to the industry and country. Whereas for many years, the Shared Service Center's mission was to answer employees' questions and manage their administrative data, we are now seeing a broadening of the processes managed by this structure.
In detail, Neocase observes a big difference between the “finance, banking and insurance” industry and the more industrial sectors (manufacturing, energy, retail, healthcare…). The industrial sector is faced with a permanent, unpredictable flow of activity. They need HR to be highly agile, both for recruiting quickly and downsizing. A frontline manager may have a recruitment need to satisfy in a few hours. The HR department must find a resource in half a day, without having the time to apply a classic recruitment process, and at the same time onboard the person by managing the employment contract, the related administrative tasks and welcoming the employee. This flexibility and agility must also be accompanied by a rigorous observation of the specific legal and safety requirements of each sector (background check in the nuclear sector, diplomas for certain medical functions).
A Shared Service Center, process standardization and digitization enable these organizations to cover these needs, as HR Service Delivery tools combine both the collaborative and productive management specific to these organizations and the configuration capacity enabling the personalization of processes for each sector.
The banking and insurance industry has more extensive service catalogs for everything to do with crossboarding, enabling employee loyalty to be built up, as well as processes linked to everything to do with “benefits,” whether in the field of health, education, or leisure. The service catalog is also country specific. In Lace's report, “Employee Relations” is an important service. In this area, Neocase observes a disparity between countries. In fact, this process is offered in the Anglo-Saxon countries: US, Canada, UK rather than in the rest of Europe. The Grievance, Disciplinary and Whistleblowing processes are the 3 most frequent.
To Each Sector their preferred channel
About channel & employee experience, Neocase is in line with the figures in the Lace Partners report, but also observes disparities between sectors, depending on the rate of deskless employees and their level of education.
In the banking and insurance industry, the magic number is “1” (number of channels), as all employees have a computer and are comfortable with digital technology. The single channel is the HR portal, which is the least costly because it enables the shared service center to handle requests asynchronously, in an organized fashion. Generative AI is making chatbots more popular, and this solution is on the 2024 roadmap of many Shared service centers.
On the other hand, in the manufacturing sector, there is a high rate of employees without a computer, without an email address and sometimes having difficulties with writing or digital tools. In this context, interactions with HR take place through the manager and the manager portal, or by phone or through (personal) emails. The portal accessible from a shared computer or kiosk is not very popular. The magic number is “3”: email, HR portal and self-service case creation.
Between banking and insurance industry and manufacturing, we find retail, healthcare, transport... with a multi-channel strategy, but with a growing trend towards chat channel, especially with the new generations. Phone, emails are costly channels. To improve efficiency, for deskless employees, Neocase offers a new mobile application that is very blue collar oriented in terms of accessibility.[1] This new channel embedding the portal has been very well received by Neocase customers in recent months and Neocase is scheduling a growing adoption for the next months.
Digitization supports the transition to regional shared service centers
Regarding Shared service center organizations, if Neocase is used for different services (Finance and HR) it’s by dedicated teams and dedicated Neocase instances. GBS (Global Business Services) is not an observed trend with Neocase customers. With cost reduction imperatives, some companies move from local shared service centers to regional. They are organized mixing virtual shared service centers with remote local HR agents, in small countries as frontline teams and physical service center in nearshore or offshore for tier 1 of large countries tier 2, COE’s . Regional Shared service centers are organized by culture, languages, however with translation tools with ai, the scope can be extended.
High Adoption of Technology and AI Integration in Shared Service Centers
About Technology adoption, 90 % of Neocase customers have implemented the portal including knowledge base. Chatbot, live agent for chat are some options with a high level of adoption. Early adopters are using Neocase AI for knowledge base, translation and more than 40% of Shared service center is scheduling to implement it this year in this channel. The benefit in the portal is really about the experience. Concerning case management, Business process management, the adoption is also very high however the scope of digital processes can be different according to the industry. AI helps to improve the operational efficiency (autoclassification of request, autorouting by skills, workload…) automatic document recognition and processing (sick note, ID….)…
The Employee Document management integrated in the HR service Delivery tool is slowly growing because of existing Enterprise content management solutions. These “aged” solutions, not compliant with GDPR and not HR oriented, are progressively replaced by point solutions. Generative ai is scheduled to help HR agents or chatbot to generate answers, but the maturity of this technology requests to be careful [2].
Building strategic foundations for modern organizations
As pioneers in the digital transformation of HR shared services, Neocase embraces Lace Partners' invaluable work of observing and analyzing the HR Shared Services landscape. We wholeheartedly integrate these insights into our strategies to continually shape the future of HR services. This adaptation is especially crucial in the current landscape, as HRBPs transition into the role of "digital business strategic partners," as highlighted by Dave Ulrich in his recent article on the evolving relevance of the HR Business Partner Model.
Multi-channel strategies, innovative and inclusive solutions, and support for local HR teams—this is how we remain the market leader. In a context of ongoing crisis, our solution not only measures and supports employee experience but also achieves cost reduction goals and helps organizations meet their needs for agility and flexibility. Together with HR shared services centers, we are building the strategic foundations for modern organizations.
[1] Download our ebook: Enhance Every Employee’s Experience in the Industrial Sector
[2] Download our TipBook: 5 Keys Tips for Balancing IA and ethics
[3] https://www.linkedin.com/pulse/update-hr-business-partner-model-continuing-evolution-dave-ulrich-vqwoc/
