Transactional HR Services

MAC Calcano

What is Transactional Services about?

Transactional Services can be a method by which to create synergies with Corporate HR and other businesses.

Combine functional HR processing (salary management, benefits administration, HRIS) and other related HR programs in order to reduce administrative costs

Focus HR management efforts on maximizing personnel transactions and service effectiveness including reduction in personnel spending thus increasing HR team’s service orientation and response time to business needs.

Transactional Services is the leveraging of HR programs and plans to meet defined customer/client requirements at agreed-upon

performance standards by managing:

HR Service Design and

Delivery

Customer Service and

Satisfaction

Employee

Motivation and Commitment

HR Business

Contribution

Transactional Services Process

1. Establish a common understanding of services: What are they and how will they be delivered and at what costs?

2. Focus on:– Personnel Administration Functions (Back-end)– Functional “expert” centers – Benefits, HRIS – Personnel Services that can be delivered at a specific site for

a entire region with no extra cost in personnel costs

Transactional Services Process

1. Technical competencies of HR “talent” must be developed in order to deliver high-end services – including possibility of outsourcing

2. Accountability and responsibility should be clearly delineated (e.g. management and administration as a cost driver which is linked to satisfactory delivery of all employee programs

3. HR performance should be constantly measured with HR Metrics to determine ROI

4. Identify Transaction Service Teams and Co-leaders 5. Identify those HR processes which can be leveraged 6. Define HR roles and agree upon how project work should be performed

across company to meet transactional service requirements and expectations

7. Define desired quality of “exceptional” service to customer /client expectations and deliver on targets

HR Transactional Service categories which are “leverageable”

Transactional

Expertise

Benefits & Salary Administration

HRIS Administration &Services

EmployeePrograms

Training & Development Activities

Transactional Services Process

1. Identify staff cost savings

2. Evaluate current customer satisfaction

3. Determine the relative importance of deliverables to operations

4. Benchmarking with Competitors and Corporate

5. Centralized, single source accountable center which is dedicated to addressing all personnel related issues – end state.

Transactional Services Implementation

Step 1: Getting Started• Assemble Project Teams to determine which are the “transactional services”• Complete Shared Services Project Planning and Gantt Charting• Begin transparency in communication and coordination of project mission

Step 2: Opportunity Analysis • Develop the business case and cost analysis• Create cost / FTE, productivity and satisfaction baseline

Step 3: Transactional Services Design• Redefine work processes – Workout process• Detail organizational changes and rationalization• Plan Implementation Transactional Service Center

Step 4: Transition to Transactional Services through Change Management Process• Establish new organization and process and protocols• Pilot test and complete workflow reengineering• Deliver on transactional service levels

Transactional Services Potential Off-Set

35% - 50% of transactional costs can be substantiated by the savings generated in:

– New work processes efficiencies (20%)– Head count reductions (15%)– Delay in hiring practices (15%)– Acquiring new HRIS system (20%)– Miscellaneous Workout sourcing (10%)– Consolidated/reduced staff without negatively affecting

service levels or morale (20%)

Cost savings through Transactional Services

Example of potential savings in work processes efficiencies and consolidated/reduced staff

Possible elimination of redundancy in HR functions and combined services

– Train/Dev. Manager (15%) $ 25K

– Labor Manager (25%) $ 20K

– HRIS Services (15%) $ 10K

– L.A. Compensation Analyst (10% ) $ 15K

– Benefits Coordinator (10%) $ 10K

– HR Manager (25%) $ 20K

Approximate Expense Contribution: $100K

Organizational effectiveness sets forth the HR Strategy which then increases Company competitiveness

Changes

Global Marketplace

New entries

And Competitors

Investment in:

People Intensive

* Competencies are

key to entry

* Global mindset

* Growth Market

* Seamless HR practice

HR Business

* HR Policy & Procedure

* Manufacturing and Supply

Process Improvement

* New business initiatives

Implications for HR

* Innovation and CHANGE

* Service mindset

* Value Added results

* Talent Management

Cause

Effect

1.) Localization2.) Consistency3.) HR value chain for business competitiveness and services4.) Profitability through cost control and growth through acquisition 5.) Focus on talent & skill base for HR 6.) Change management & project process7.) HR Technology implication and Speed to React8.) Attracting, retaining, measuring and intellectual human capital9.) Turnaround is not transformation 10.) Evolution Not revolution

The investment in Human Resources The Cause

HR helps manage the business by transforming the organizationHR helps manage the business by transforming the organization

• Individual focus

• Status Quo

• Vertical communication

• Success through risk

avoidance

• Remain constant

• Little change

• Team status

• “Employer of Choice”

• Constant enhancement

• Vertical & Horizontal

communication

• Success through leadership,

courage and risk taking

• Management processes are

competitive advantage

• Speed to react

Entitlement Culture - little at risk

Results Culture- we deserve what we earn

Framework for HR which partners with the Business The Effect

1. Defines organizational architecture and footprint

Six factors for successful operation:• Shared mindset with Corporate HR

• Competence in-Country

• Consequence if not achieved - In or Out

• Governance by Corporate

• Work process/ capacity for improvement

• Team leadership – self-direction

2. Creates assessment and succession process and practices

3. Provides leadership in improving HR practices

4. Sets Training and Development priorities

5. Establish the organizational structure and translates strategy into tactics

6. Learns to perform organizational diagnosis by asking the right business questions and by generating creative and apt alternative practices and recommends solutions

7. Be able to set actions and initiatives and then follow through – relentless