Shared Service Centers: Identifying Hidden Costs and Leveraging Opportunities
Shared Service Centers (SSCs) are intended to reduce HR costs—but in practice, those costs often rise. The main causes are underestimated onboarding and training costs, long training periods, and high turnover, which leads to additional expenses and a loss of knowledge.
Structural problems are also driving up costs: Services that are not widely accepted lead to duplicate requests and inefficient overlapping structures. At the same time, existing processes that add little value are often adopted as-is (“lift-and-shift”) instead of being scrutinized and optimized.
The key to success, therefore, lies not in centralization itself, but in consistent process optimization. Through simplification, standardization, and automation, transactions can be significantly reduced and efficiency gains achieved. Modern approaches also rely on proactive services and self-service solutions.
Conclusion: SSCs are not an end in themselves. Only by clearly focusing on value creation, the use of technology, and lean processes can a sustainable and truly efficient HR organization be created.
In my article in Personalwirtschaft, I compiled some data on this topic that sheds more light on the “one-trick pony” of labor cost arbitrage.
Click here to read the article: Personalwirtschaft - Shared Service Center
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