Create a Shared Service for HR

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Introduction

Today, the success of many non-profits depends on having a talented, committed workforce. And most leaders know that good HR practices are an important ingredient in building that workforce. Yet, they find themselves stretched too thin, without the expertise they need, and often struggling with this important aspect of their work.

Better HR practices contribute directly to better organizations. Future growth, organizational success and high quality of service will be affected if staff lack skills needed in their job roles, are not recognized for good performance, do not have opportunities to grow and develop, are overly worried about the future of their career, or are consistently overworked.

One way that non-profits can gain build better people management practices is to join together with other organizations in order to share HR resources. This provides the benefit of access to HR expertise that might not be sustainable in each organization independently. This model is referred to as HR shared services.

This toolkit will guide you through the process of:

• Understanding the background and principles in developing a shared HR resource

• Assessing your organization’s readiness and capacity for adopting this approach

• Taking the necessary steps to successfully establish a shared HR resource

At the end of the process outlined in this toolkit, you will have clarified the governance requirements of this model; created a Shared Services Business and Strategic Plan and have an implementation strategy.

This toolkit builds on the results of feasibility studies funded through the BC Non-profit Sector Labour Market Partnership project. The reports from those studies contain more in-depth information and would be valuable resources for organizations looking into shared HR resources. The studies are listed in the Appendix.

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Overview of Shared HR Services

What is a Shared HR Service?

With a shared HR service, two or more organizations pool their resources to improve their access to cost-effective and high quality HR support and advice.

Generally, this means that one or more designated people with HR responsibilities will be shared by a small number of organizations. This may include HR generalists or HR specialists e.g. payroll, benefits, staffing, conflict resolution etc. There is a wide range of ways to structure and govern these types of shared arrangements, and these are discussed later in this document.

Why Create a Shared HR Service?

The United Services Community Co-op1 conducted a shared services feasibility study for non-profits and they found the following:

Reasons why to undertake a shared services approach:

• Increase capacity and work more effectively

• Stronger cooperative relationships

• Long term sustainability

• Expand the labour pool

• Reduce consulting and one-off costs

• Increase staff retention

• Be recognized as innovative and efficient

• Provide increased opportunities for personal and professional growth & development

Opportunities a shared services approach would provide:

• Relationship building for the organizations

• Could be social enterprise based

• Shared learning for all

• Sustainability over time

• Increased program productivity due to more effective support on HR issues

1 Adapted from Shared Services: An Opportunity for Increased Productivity, 2010 used with permission.

Important Note: It is the role of those who provide this HR service to give support and sound advice to management. Managers and leaders continue to play the key role of

providing direction, leadership and management of the staff.

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What are the Risks of Not Having an Effective HR Service?

The feasibility study by the United Way of Northern British Columbia2 identified five main areas of risk associated with not having access to experienced HR advice:

• The application of inappropriate interpretations of collective agreements;

• Poor management decision making due to incomplete or redundant Policy and Procedure Manuals;

• Poor hiring based on Incomplete, outdated, or irrelevant Job Descriptions;

• HR issues frequently being handled reactively because EDs don’t have time to address this aspect of their operation proactively, and;

• Poor HR practices leading to increased difficulty in recruiting and retaining skilled staff.

Effective service delivery, the achievement of service outcomes and the achievement of longer term social policy goals hinge on the capacity of non-profit organizations to deliver those services. The capacity to deliver those services depends directly on effective human resource management.

Foundational Principles for Developing a Shared HR Service

Successful implementations of HR shared services will require3:

• Ongoing executive leadership and sponsorship at the top of the organization (board of directors, executive team, etc.)

• Solid project and operational governance

• Consensus on the degree of standardization of practices across the organizations – which ones must be similar, which ones can differ

• Meaningful performance measures of the HR shared service – that are communicated regularly to key stakeholders

• A business case that takes into account possible future investments

• Strong change management and communications throughout the implementation and beyond

• A credible and knowledgeable HR professional to help guide the design and implementation

The following section outlines the 10 key steps for implementing a shared services model.

2Adapted from Feasibility Study for Shared HR Services: North-Central BC, 2010 used with permission. 3 Adapted from HR News - IPMA Newsletter, April 2012 article on Evolution Of HR Service Delivery In The Public Sector: Shared Services Taking Center Stage

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The 10 Steps to Developing a Shared HR Service

A clear ten-step process can support organizations to define their objectives, capitalize on strengths, drill down to avoid possible pitfalls, and determine areas where they may need external support.

Not all implementations will require in-depth work on each step. Remember that too much process will cause the initiative to stall, while too little process can result in participants going a long way down the collaboration pathway only to discover that they are unable to work together.

The process is not likely to be perfectly linear – expect some false starts, some iterations and adjustments. Throughout the process, continue to review past assumptions and decisions to be sure that these are consistent with the developing vision.

On average, it may take 6 – 9 months to go through the steps and maintain the required support and buy in.

1 •The Scoping Dance

2 •Situational Analysis

3 •Decide Whether to Explore Further

4 •Formalize the Shared Services Committee

5 •Decision to Proceed

6 •Establish an Operational Group and a Champion/Leader

7 •Undertake a Feasibility Study

8 •Decide Whether to Proceed or Not

9 •Develop a Shared Services Business and Strategic Plan

10 •Implement the Shared Services Plan

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Step 1: The Scoping Dance This is the beginning of the process. Someone has an idea or sees an opportunity or threat and they start talking with stakeholders in other organizations to find a shared solution. The characteristics of this step are:

• Someone – perhaps an ED or Board member – identifies an opportunity or threat

• The individual starts talking with others in his or her network

• Additional individuals are identified who recognize the opportunity or threat.

• Informal meetings take place and trust is built

• It is acknowledged that there is a need or shared opportunity for a defined relationship

• The stakeholders discuss various organizational and governance models and test the group’s boundaries for such models

Tips and Learnings

These learnings from the earlier feasibility studies, combined with the wealth of resources available on the StepUpBC web portal, can help you to identify the needs and opportunities.

• Assessing the Need. Meet together and review why you should improve your organization’s capacity to manage human resources. Review the best practices and materials available on the StepUpBC portal. What practices are you already confident about? What efficiencies are you hoping to gain? What areas for improvement are most important?

• Reviewing Current Support Systems. Where do you and the other leaders currently seek HR information and support? Which of those sources would you expect to continue using? Which ones might be shared among the participating organizations within a shared service?

• Being Realistic about Trust and Collaboration. Trust and collaboration among the participating organizations are critical elements if a shared HR service is to be successful. However, in many communities, organizations can find themselves competing for money, skilled workers, and for board members. Recognizing and addressing these realities can be challenging – and it is absolutely essential.

• Deciding on Boundaries. Later sections of this toolkit outline a number of options for governance and management of a shared HR service. Discuss how those models might fit with the current strategies and structures of the participating organizations. Identify risks and opportunities, and seek to understand the perspectives of the key stakeholders. Assess your organizations’ readiness for the various governance and management models.

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Step 2: Situational Analysis

The situational analysis helps to identify and clarify the rationale and assumptions for creating the shared service for HR. That is, what evidence do we need of the threat or opportunity of a shared service and what do we know about each organization and its potential for a shared relationship?

• Define the project clearly

• Identify what HR services could be handled through this process?

• Define who could benefit from the service?

• Identify the current supports. Who is providing these services now?

• Identify any additional potential partners

• Identify the cost/benefit potential, considering aspects such as:

o Direct benefits from greater efficiencies in processes such as recruiting and compensation

o Indirect benefits from better hiring, lower turnover, better management of training, and so on

• Assess the risk and liability issues

• Clarify the resources each organization brings to the table

• Understand what the ‘deal breakers’ are for each organization

Tips and Learnings

• >> See the Appendix for a template that will help identify which HR services could be supported by the shared service.

• See the report, Northern BC Non-Profit Social Service Sector HR Metrics and Interpretation Guide that describes 19 metrics in six categories: Productivity, Compensation, Recruitment, Retention, HR Efficiency and Workforce Demographics. Choose a few metrics, or develop new ones, that relate to your organization’s needs and priorities.

• Assess the effectiveness and impact of your organization’s people management practices. Track indicators such as absenteeism, turnover, skill levels and others on an ongoing basis to observe patterns and trends; monitor them internally and compare them to relevant external sources.

Step 3: Decide Whether to Explore Further

While the process is still at an exploratory stage, engage key stakeholders such as the Board to ensure you have their buy-in to the proposal. If the board of an organization does not support the further exploration of the concept, there is little reason to keep that organization in the discussion.

Step 4: Formalize a Shared Services Committee

Create a shared services committee or working group to move the initiative forward. Its primary responsibility is to work through and document an initial agreement. The formal agreement document can take different forms – Services Charter, letter of intent, letter of understanding – and should include the following:

• Vision, Values, Mission/Focus

• A statement of the scope (and therefore what is outside the scope)

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• Governance and decision making

• Objectives; potential benefits to be achieved (e.g. productivity gains) and related indicators

• Partnership in the shared service (how to opt in or opt out)

• Funding

• Identify and clarify possible options

• Timelines for implementation

• Protocols around:

o Conflict resolution

o Handling any liability questions

o Confidentiality/ethical considerations/ non-compete

o Process leader

o Communication and transparency

o Annual process review

Step 5: Decision to Proceed

A formal approval of the agreement document is a critical step in the process, prior to proceeding with implementation planning. Typically, the Board will be asked for its approval at this stage. The process should be aligned to the typical governance processes of each organization. Regardless of the method, it is important to formalize the commitment of each organization to further exploration of the shared services proposal.

Step 6: Establish an Operational Group and a Champion/ Leader

This becomes the working group for developing the final shared services agreement and operational framework. It is critical that this working group combine primary decision makers with the administrative ability to develop the formal agreements.

Step 7: Undertake a Feasibility Study

The next step is to undertake a detailed feasibility study. The study would include the following activities:

• Mini-audit/operational review relative to the identified opportunity or threat

o This might include a cost benefit analysis – addressing both direct and indirect aspects

o >> See the Appendix for a Sample Financial Feasibility Tool

• Operational definition of the shared service opportunities, including:

o Workability and what would be the agreed upon definition of “feasible”

o Who would benefit / What other sources of HR support exist

• Identify sources of funding

• Create pro-forma

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• Stakeholder involvement (identify which stakeholders to engage at this point)

• Identify the most suitable governance/partnership model for the project and the organizations (see below)

• Consider qualifications and fit of current staff (within the cluster of organizations) or additional needs for the HR shared service

• Consider what space and other requirements are currently available and what will be needed

• Reach consensus, after the study is complete, about the feasibility of the proposal

Step 8: Decide Whether to Proceed or Not

At this point some organizations may decide to withdraw from the process. The remaining organizations should have formal approval from their boards to proceed.

Step 9: Develop a Shared Services Business and Strategic Plan

This step should build directly from the results of the situational analysis and feasibility study. It is critical to pull information together to finalize the shared services plan. This step also finalizes the governance/ management model to be used.

Step 10: Implement the Shared Services Plan

Implementation can take many forms, but the work done in the previous nine steps will provide a clear path forward for the organizations involved.

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Governance and Organizational Models In small or mid-sized organizations, with limited needs for HR services, the organizational and governance process can be relatively straightforward. If the shared HR service is 1 or 2 staff, then organizational structure is simple. Establishing governance is primarily an exercise of agreeing upon and documenting the decision-making processes among the participating organizations. However, with larger organizations or with multiple participating organizations or a shared HR service of significant size, then options for governance and organizational models become more important. As the participating organizations pursue their discussions, they must begin to consider the governance and management structure that will provide leadership and direction to the shared service. This section addresses the different models through which a partnership approach may function. The nature of the HR shared service, and the willingness of the organizations to give up control, will play a part in determining which model will work best for any given group. Possible shared service models can be viewed on a continuum that establishes governance and management. For example, outsourcing and project based models represent high control of the shared service by the organizations involved whereas the establishment of a new legal entity involves the transfer of control/ governance to the new entity.

The Continuum of Governance/Organizational Models4

4 Adapted from Shared Services: An Opportunity for Increased Productivity, 2010 used with permission.

Low Degree of: Structure Control Commitment Governance

High Degree of: Structure

Control Commitment Governance

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Outsourcing – organizations develop a shared services contract with an expert supplier. Outsourcing includes a variety of contract arrangements, fee for service, retainers, retainers with specific project opportunities, etc. The supplier of HR support governs its own operations but the shared service organizations choose what services they wish to purchase. The partners are potentially able to secure a better fee for service or retainer rate because they have pooled their needs and represent a larger customer for the service provider. Strengths The primary strength of this model is that the supplier creates the service and each participating organization can determine how much they require at any particular time. The organization can receive a range of specialized services, depending on the size of the service provider

Weaknesses The price tag might be higher to reflect the service uncertainty (i.e. what will the utilization level be). Any specialized services will also increase costs. The service provider will also want to achieve some profit from the services they provide.

Project Based Collaboration – organizations seek to accomplish specific outcomes in a time limited and specific manner. There is a temporary allocation of resources (money, manpower, time) from the partners to the project. Individuals working on the project form a team with team responsibilities but they continue to have primary allegiance to the organization that pays their salary. Strengths This model is time limited and the organizations do not have to transfer resources on a permanent basis to this shared service.

Weaknesses This model is time limited and there is always the expectation that the shared service will end and the organizations will return to their former operation.

Lead Supply Agency – one or more of the existing agencies will provide the resources for the task. In a group of agencies where there are multiple shared services, one organization could be the lead agency for one shared service (e.g. information technology) while another organization could be the lead agency for another (e.g. human resources). This model is a form of outsourcing that keeps the work within the partnering organizations. The lead agency is compensated by the other organizations for the services provided. Strengths In this model one organization expands its services to meet the shared service needs. Current infrastructure can be used – there is no need to establish a separate organization with its own payroll, benefits, etc. The strengths and available capacity of current HR-related staff can be used more fully.

Weaknesses In this model one agency has control over the shared service. The organization operating the service tends to have more power in resolving any conflict. There is the potential that the non-lead organizations will feel that their needs are not being recognized or supported and may withdraw, reducing the effectiveness and/or efficiency of the service provided by the lead agency. It requires high degrees of trust, as staff within one agency will have access to information regarding the partner organizations.

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Consortium/ Integrated network – a contract between the organizations undertaking a shared service. The stakeholders are focused on a common specific purpose, generally over a specified time period, which requires the sharing of resources. The time period is generally significantly longer than the project based approach and is intended to be relatively permanent. Consortiums are also more typically multi-project/ purpose than project based models. In some cases, however, they can be one purpose. Strengths In this model a legal structure is not required, although a formal agreement is necessary. The strengths of the participating organizations are combined to provide an important service.

Weaknesses In this model it may be difficult to plan for the future, as the commitment of the participating organizations may be only perceived as temporary by some of the organizations. Most contracts will provide for the individual organizations to withdraw from the consortium at certain points.

Incorporation – a new legal entity is established to deliver the shared service. This is a new organization with some involvement in the governance by the partner organizations. The new entity provides the service that is required. The organization receives its primary funding from the participating partner organizations; it may also offer services on an outsourcing or consultant basis to other organizations. This model requires careful attention to how resources and funds flow back and forth to / from the new entity and how those resources are directed. For example, there will be administration costs for the participating organizations, as well as for the new entity. It is important to make plans for any cost savings and/or additional investments for special initiatives. Staff members could be seconded to the new entity, or directly employed by it, on a temporary or permanent basis. Incorporation of a new entity entails risks. They include:

• The agency might incur start-up costs that can’t be recovered; • The new entity might fail and cause one or more owner agencies to fail; • The owner agencies may fall‐out and cause the shared approach to fail; • An owner agency may lose a particular expertise if it is no longer run through their organization; and, • There may be challenges in maintaining brand and providing the range of follow up services if staff is

absorbed by new entity.

In summary, strengths and weaknesses of this model:

Strengths The primary strength of the incorporation model is that it is a separate entity from the partner organizations with its own focus and operating processes. It is a permanent structure that provides a focus for the shared service without being too closely tied to any of the partner organizations.

Weaknesses The primary weakness of the incorporation model is that its independence may lead it away from being a service for the cluster of organizations and to having a “life of its own” that may not continue to meet the needs of the partner organizations. This weakness can be reduced by the sharing organizations establishing clear ownership/control but, over time, the marketplace may lead the organization away from the initial purpose for which it was created.

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Within the incorporation model, there are three specific models that could be considered: co-ops, non-profit corporations (with or without charitable status) and a social enterprise. Entity A: Non-Profit Organization – member based and may or may not have charitable status. Charitable status would allow it to provide receipts for donations and, therefore, to fundraise for its own specific services. Strengths The primary strength of the non-profit model, in this context, is to provide a consistent perspective that supports the non‐profit approach of the shared service organizations.

Weaknesses The primary weakness of the non-profit corporate model is that the membership could be quite broad and may not provide the focus required by the organization.

Entity B: Social Enterprise – A for-profit corporation that is owned by the non-profit partner organizations. It produces or sells products in the marketplace and its profits are used to benefit a social mission, not the individual stakeholders. Strengths The social enterprise model’s focus is on selling products or services which provides clarity of purpose for the organization, and the ability to sell these products to any potential purchaser, shared service member organization or not.

Weaknesses The weakness of the social enterprise model is the additional complexity of maintaining attention on the social mission and its partner members while also succeeding in the broader marketplace.

Entity C: The Co-op Model – a member owned organization where each member invests in the co-op. In a co-op, each member has one vote and the overall process is democratic. Co-ops can be profit or non-profit organizations. If it is a profit co-op, then the profits, if there are any, can be shared either by the number of shares each organization has or their percentage of usage of the co-op services. Strengths The primary strengths of the co-op model stem from its democratic and ownership principles. No matter the size of each owner-member, they each have an equal say. The principle of ownership of a co-op can create a strong commitment and high levels of engagement from the owner-members. Shares in a co-op can be listed as an asset on an agency’s balance sheet and not an on-going expense.

Weaknesses The primary weaknesses of the co-op model are that with a strong focus on member benefit, a co-op can be viewed as not benefiting the broader community, but only its owner-members. As well, in many ways a robust co-op is one that has strong engagement from its owner-members. Sometimes, if membership becomes quite large, or when engagement isn’t high, decisions and actions may not be made/ done in a timely manner, or a small group of more engaged members can take it over.

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Conclusion

Key Considerations in Developing a Shared HR Service

Non-linear progress. While the process is presented as a linear sequence of steps, the reality is often quite different. As the discussions reach increasing depth, it may be necessary to go back and review earlier steps to ensure that data and assumptions are still aligned with the overall direction. The process may flow backward and forward, sometimes leapfrogging steps to meet the unique needs and situation.

Confidential. It is critical that trust and confidentiality (among the participating non-profits) be established during the early stages of the process. Remember that shared services can impact many people, including staff and volunteers, and it can also be a competitive advantage for the organizations involved.

Inclusion. In the early stages it may be necessary for a small group of leaders or managers to work on the shared services project, but once the decision has been made to move forward, it is important to include a wider range of people. For example, supervisors or first-level managers can be engaged during the feasibility study. Union representatives and/or employees should also be involved. Commitment to the planned organizational change will only flow from meaningful involvement in planning that change.

Patience. Developing a shared services agreement takes time and patience. Plan for a minimum of 4-6 months. Some say that very large or complex agreements could take as much as a few years. The resulting shared services agreement should last for a significant period of time so it is important not to rush it.

Respectful of organizational realities. Power and culture are important components of all organizations. It is critical that the process is respectful and the shared services agreement recognizes the cultural and power needs of all the partners. Sometimes these cannot be aligned but it is worth trying.

Leadership commitment. The development of a shared services agreement is an important organizational change, requiring the early involvement, commitment and active participation of the ED/ CEO and the senior management team. Commitment to significant change requires a compelling vision of the benefit. Sometimes, the ‘burning platform’ of an external threat, or a major change in the environment, drives organizations and their leaders to consider new opportunities to change and survive.

Clarity of roles. It is critical to understand the difference between what a central HR service can provide and those activities that must remain within the role of supervisors and managers. For example, supervisors must always be part of the hiring decision and they must own the goal setting, coaching and feedback process if employees are to develop the competency and commitment to make the organization successful.

Strategic goals. A clear commitment to an overall strategic set of goals is required before an organizational model can be conceived or selected.

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Appendix

HR Shared Services Template In considering the development of a specific shared service it is important to understand all of the potential components of that service. This means looking at the present types of HR activities being handled in order to:

• Understand the HR needs of the partner organizations • Look at the differences/ similarities in current HR practices between organizations • Knowing which high value HR activities should be retained within the organizations • Knowing which HR activities could be supported by an external service

There are potentially a number of areas in which organizations could develop shared service agreements and the following list can be helpful5. It is strongly suggested to consult with an HR professional during these discussions to understand the scope and range of activities associated with these activities.

5 Adapted from Shared Services: An Opportunity for Increased Productivity, 2010 used with permission.

Reminder: It is the role of the shared HR resource to provide support and advice. The hiring, direction, leadership and management of staff and volunteers remain the responsibility of supervisors, managers and other leaders in the organization.

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HR Service

Include in Shared Services? (Yes/No) If “Yes”, brief description of service to be included in shared services

If yes, # of times per year

Time Allocated (separate HR staff and Line Mgr time

Employment and Advisory Services Recruitment and Selection

HR Forecasting Job analysis and design Interview design Interviewing skills Referencing checking Criminal records checks Probationary reviews

Employee Relations, Compliance Advice regarding day to day issues (performance, coaching, discipline)

Compliance advice (Employment standards, Human Rights, etc.)

Regular updates on changes in practice and law that may affect any area of service

Compensation Services Job Evaluation

Job Evaluation Plan design Salary structure design Evaluation of positions Job description creation Regular review of positions as required

Benefits Review of existing benefits plans Advice on maintenance and application of benefits programs

Salary Administration Compensation Surveys Recommendations for changes to salary structure

Updates on sector increases and recommendations

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HR Service

Include in Shared Services? (Yes/No) If “Yes”, brief description of service to be included in shared services

If yes, # of times per year

If yes, time estimates (separate HR staff and Line Mgr time

Health and Safety Services H&S Policy and Advisory Services

Safety regulation advice Research on existing and new policy in keeping with legislation

H&S Program Program audits Program design Committee design and support Claims management model

H&S Administration Claims Management WHMIS

H&S Training First Aid Violence in the Workplace Role of the supervisor Effective H&S Committees WHMIS

Orientation and Training Services Design

Design of organizational training plans Management training programs Design of orientation programs

Delivery Delivery of management and supervisory training

Coordination of training Organization Development and Strategic HR Services

Strategic HR Planning and Metrics Measurement of HR related issues (i.e. Turnover, cost of vacancy, ROI of all HR services)

Policy Development Research and advice on policies Draft policy development

Organization culture assessments Organizational design and structure Change management

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Sample Financial Feasibility Tool Comparison of Current State to Proposed Structure – Finances Current Operations:

• There are three organizations of equal size, A. B and C, that are proposing to consolidate some services

• All three have four program managers, an HR Manager and 2 clerical payroll processing staff.

• This analysis does not quantify the improved services provided by the new Director of HR which may include savings on benefits costs, lower turnover, best practices etc.

HR Service

Organization A - Program

Management Organization A - HR

Management Total - Org A

Total for A, B and C Proposed

Structure (see

below) Change

Program Manager

Total for Four Mgrs

HR Manager

Clerical (2 Staff)

Total HR (A x 3)

Employment and Advisory Services

Recruitment and Selection 10% 40% 25%

25%

65% 195% 123% -72% Employee Relations, Compliance 2% 8% 10%

10%

18% 54% 37% -17%

Total 12% 48% 35% 0% 35%

83% 249% 160% -89% Compensation Services

Job Evaluation Benefits

5% 50% 55%

55% 165% 135% -30% Salary Administration or Payroll 8% 32% 5% 150% 155%

187% 561% 436% -125%

Total 8% 32% 10% 200% 210%

242% 726% 571% -155%

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HR Service

Organization A - Program

Management Organization A - HR

Management Total - Org A

Total for A, B and C

Proposed Structure Change

Program Manager

Total for Four Mgrs

HR Manager

Clerical (2 Staff)

Total HR (A x 3)

Health and Safety Services

H&S Policy and Advisory Services 5%

5%

5% 15% 14% -1% H&S Program 1%

1%

1% 3% 11% 8%

H&S Administration 5%

5%

5% 15% 20% 5% H&S Training 3%

3%

3% 9% 18% 9%

Total 0% 0% 14% 0% 14%

14% 42% 63% 21% Orientation and Training Services

Design 5%

5%

5% 15% 11% -4% Delivery 3% 12% 10%

10%

22% 66% 50% -16%

Total 3% 12% 15% 0% 15%

27% 81% 61% -20% Organization Development and Strategic HR Services

Strategic HR Planning and Metrics 2% 8% 7%

7%

15% 45% 48% 3% Policy Development 15%

15%

15% 45% 35% -10%

Organization culture assessments 2%

2%

2% 6% 8% 2% Organizational design and structure 1%

1%

1% 3% 5% 2%

Change management 1%

1%

1% 3% 5% 2% Total 2% 8% 26% 0% 26%

34% 102% 91% -11%

Total 25% 100% 100% 200% 300%

400% 1200% 946% -244% FTEs 0.25 1.00 1.00 2.00 3.00

4.00 12.00 9.46 -2.44

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Proposed Operations:

• In each of the three organizations that have equivalent operations:

o Reduce program managers from 4 to 3.5 FTE, reduce HR time per manager from 25% to 10% FTE

o Move the savings in Manager time of .5 FTE to the HR Manager position, and eliminate the previous three HR manager positions

• In the new Shared Services Entity, serving all three organizations:

o All clerical positions are transferred to a new entity; 6 positions are reduced to 5 positions with each of the three organizations having one designated contact person.

o One HR Director tasked with strategic objectives and one HR Admin person with prime responsibilities to hire new staff are appointed

o This analysis does not quantify the improved services provided by the new Director of HR that may include savings on benefits costs, lower turnover, best practices etc.

HR Service

Organization A - Program

Management

Org. A - HR

Manage-ment Total -

Org A

Total for A, B and

C Shared Service Entity

Grand Total Program

Manager Total for

3.5 Managers

.5 HR Manager (A x 3) HR

Manager New HR

Admin Clerical

(n=5) Total

Employment and Advisory Services

Recruitment and Selection 5% 18% 5% 23% 68% 5% 50%

55% 123% Employee Relations, Compliance 1% 4% 2% 6% 17% 10% 10%

20% 37%

Total 6% 21% 7% 28% 84% 15% 60% 0% 75% 159%

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HR Service

Organization A - Program

Management

Org. A - HR

Manage-ment Total -

Org A

Total for A, B and

C Shared Service Entity

Grand Total Program

Manager Total for

3.5 Managers

.5 HR Manager (A x 3) HR

Manager New HR

Admin Clerical

(n=5) Total

Compensation Services

Job Evaluation Benefits

10% 125% 135% 135% Salary Administration 2% 7% 10% 17% 51%

10% 375% 385% 436%

Total 2% 7% 10% 17% 51% 0% 20% 500% 520% 571% Health and Safety Services

H&S Policy and Advisory Services

3% 3% 9% 5%

5% 14% H&S Program

3% 3% 9% 2%

2% 11%

H&S Administration

5% 5% 15% 5%

5% 20% H&S Training

5% 5% 15% 3%

3% 18%

Total 0% 0% 16% 16% 48% 15% 0% 0% 15% 63% Orientation and Training Services

Design

2% 2% 6% 5%

5% 11% Delivery 2% 7% 3% 10% 30% 10% 10%

20% 50%

Total 2% 7% 5% 12% 36% 15% 10% 0% 25% 61%

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HR Service

Organization A - Program

Management

Org. A - HR

Manage-ment Total -

Org A

Total for A, B and

C Shared Service Entity

Grand Total Program

Manager Total for

3.5 Managers

.5 HR Manager (A x 3) HR

Manager New HR

Admin Clerical

(n=5) Total

Organization Development and Strategic HR Services

Strategic HR Planning and Metrics

6% 6% 18% 25% 5%

30% 48% Policy Development

5% 5% 15% 15% 5%

20% 35%

Organization culture assessments

1% 1% 3% 5%

5% 8% Organizational design and structure

5%

5% 5%

Change management

5%

5% 5% Total 0% 0% 12% 12% 36% 55% 10% 0% 65% 101%

Total 10% 35% 50% 85% 255% 100% 100% 500% 700% 955% FTEs 0.10 0.35 0.50 0.85 2.55 1.00 1.00 5.00 7.00 9.55

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Annotated Bibliography

Primary References and Studies

This toolkit builds on the results of the following projects funded through the BC Non-profit Sector Labour Market Partnership project. The reports contain more in-depth information and would be valuable resources for organizations looking into shared HR resources. Shared Services: An Opportunity for Increased Productivity, 2010, United Services Community Co-op

• This study explored the feasibility of shared services for 14 Lower Mainland social service organizations. The resulting Shared HR Services Feasibility Study Template can be used by organizations to evaluate the feasibility of a shared approach.

Feasibility Study for Shared HR Services: North-Central BC, 2010, United Way of Northern British Columbia • This study explored the feasibility of shared services for three clusters of non-profit organizations:

non-profits serving a large rural geographic area, non-profits operating in a rural community, and aboriginal non-profit organizations. The resulting report recommends two approaches for shared HR services in disbursed rural and northern non-profit organization.

Pilot Project Shared Human Resources for Rural Social Service Organizations, 2012, South Okanagan Similkameen Volunteer Centre

• The South Okanagan Similkameen Volunteer Centre conducted a shared HR Services Pilot with ten small organizations operating in distributed locations in the South Okanagan. The pilot also began with an assessment of high priority HR management areas and develops training materials and tools to help EDs of very small organizations to improve HR management practices.

• The purpose of the program was to pilot a shared model of HR in non-profits following on the recommendations of the feasibility study of the United Way of Northern BC 2010. (see above) The program was designed to encourage collaboration, sharing and knowledge-pooling of rural non-profit HR successes, and communicate the benefits of improving and sharing rural non-profit HR systems.

• Three training events brought together the non-profits in a spirit of learning and sharing. These events focused on building Human Resource capacity including Human Resource management skills.

• Web site: http://www.volunteercentre.info/scms.asp?node=72

Shared Human Resource (HR) Services Pilot Program for Small Non-Profit Agencies Serving A Large Geographic Area, 2011, United Way of Northern British Columbia

• The United Way of Northern BC conducted a Shared HR Services Pilot with 11 small non-profit organizations service in a large geographic area in the Prince George Area. This model employs an HR professional to provide advice and guidance to Executive Directors (ED) and Agency Managers. The Project has also looked at how HR metrics can be used to help non-profits improve HR Management Practices. Some useful resources:

o HR Metric and Interpretation Guide The metrics provided are a good representation of the current HR practices in the

not-for-profit social service sector in Northern BC and can be used to gauge the efficiency and effectiveness of existing HR practices compared to other similar organizations.

o Analysis of HR Metrics in Northern Non-Profit Service Providers o The Value of Measuring People o Recruitment, Selection, Retention: Shared HR Services Pilot Project

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Further References

20 Questions Directors of Not-For-Profit Organizations Should Ask about Human Resources, 2011, Canadian Institute of Chartered Accountants; Available for purchase from the CAstore

• This is a briefing to assist not-for-profit boards in discharging their responsibility for the stewardship of the human resources of their organizations.

• It helps to clarify the roles and responsibilities for Boards, Directors and HR providers. Building Capacity for Effective HR Management in the Non-profit Sector - Summary Recommendations Report, HR Council

• This summary report identifies specific strategies that should be developed and implemented to address the gap between the supply and demand for HR management training and information in the sector.

The Evolution of HR Service Delivery in the Public Sector: Shared Services Taking Center Stage – HR News IPMA-HR (2012)

• Shared services offer the greatest efficiency, effectiveness and cost reduction opportunities. • Virtually all successful deployments of an HR shared services model have been characterized by:

o Solid project and operational governance o Meaningful performance measures

HR Metrics Standards and Glossary, 2013, British Columbia Human Resources Management Association (BC HRMA)

• This combined set of information forms the standards upon which the British Columbia Human Resources Management Association (BC HRMA) has developed the HR Metrics Service.

Finding your place on the HR shared services continuum, 2008, Mercer

• Successful deployment of a shared service model requires careful, thorough planning based first and foremost on understanding the organizational and environmental context of the change and the consequent success factors.

HR Shared Services - The Foundation for Integrated Talent Management and High Performance, Accenture

• Implementing HR shared services demands more than simply centralizing the HR function within the shared services model. It requires designing and implementing key organizational, process and technology components

Building Capacity for Effective HR Management in the Non-profit Sector - Summary Recommendations Report – HR Council 2008

• Recommendations: o Demonstrate why good Human Resources Management matters o Increase understanding of the practice and principles of Human Resources Management o Promote a culture of learning and collaboration o Encourage the development and delivery of sector appropriate Human Resources

Management learning

HR Management Standards – HR Council 2011 – (PDF) • Defines standards for non-profits to develop internal HR policies and procedures and sets the stage

for the work to be supported by the HR services • Standards are grouped into six broad clusters:

o HR Management Policy Framework & Employment Legislation o Getting the Right People o Managing People and their Work o Workplaces that Work o Training, Learning & Development o HR Planning

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Workplaces that Work Case Study #1: Black Coalition for AIDS Prevention, accessed May 2010, HR Council web site

• The Black Coalition for Aids Prevention collaborated with six other AIDS service organizations in Toronto to address a common need for HR support. They jointly applied for a grant from the Ontario Trillium Foundation to hire an HR consultant.

Workplaces that Work Case Study #3: Big Brothers Big Sisters - Edmonton, accessed May 2010, HR Council web site

• Big Brothers and Big Sisters Edmonton collaborated with six agencies in an HR Cluster Program funded by the Muttart Foundation. It is a shared services program focused on pooling resources to provide agencies support and access to HR management expertise.

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About StepUp BC

The non-profit sector contributes as much to this province as traditional sectors such as construction, mining and agriculture—and its greatest resource is its people.

StepUp BC supports British Columbia’s non-profit sector in finding creative solutions for attracting, retaining and developing the talent it needs to thrive.

We focus on six key areas:

Developing existing talent. We provide a range of strategies to help non-profit organizations maximize their existing talent.

Recruiting new talent. We help potential candidates see the exciting opportunities a career in the non-profit sector offers.

Preparing for leadership succession. We provide guidance on formal succession planning and long-term sustainability.

Increasing workforce diversity. We support improved representation through greater gender, age, ethnic and cultural diversity.

Ensuring employee satisfaction. We promote the appreciation, recognition and development of varied skill sets.

Telling a new story. We’re changing perceptions by spotlighting the non-profit sector as a catalyst for revitalization and growth.

Whether you are leading a non-profit organization, working for one or considering the non-profit sector as a career choice, StepUp BC can connect you to the tools and information you need to succeed.

Learn more at StepUpBC.ca

Funding provided through the Canada-British Columbia Labour Market Development Agreement