Service Levels for HR Services Delivery – An Evolution

Jim Koenig, EquaTerra Client Executive, Human Resources Advisory

A challenge in establishing an HR services delivery function is determining the performance measures to govern the services. This applies whether the service delivery model is internal shared services, outsourcing or a hybrid. There are many factors to consider, such as:  what are the desired outcomes from the services, what are the desired performance levels, how readily can the service levels be tracked and reported, and most importantly what are the acceptable value versus cost trade-offs (there is a direct cost relationship between the service level and the cost to deliver the service)?

Over the last decade service levels have matured for measuring the delivery of HR services, becoming increasingly more standard. Service levels are generally focused on the “outcomes” of specific process functions, with service timeliness and quality being key drivers (as these elements translate directly into the experience with the services). Service levels are also something where “more is not more.” In an HR services delivery function it is important to have “penalties” on the service components that are most impactful to the organization. The penalties need to be sufficient to drive the performance required – too many service levels dilute the impact. In an HR services delivery function it is typical to deploy a concept of critical and key performance measures with penalties assessed for those service levels deemed critical.

However, operational performance is not sufficient to monitor the overall health of the services delivery function (regardless of whether it is internal or external). Historically performance measures/service levels tended to be tactical in nature. Organizations have always struggled with how to measure the strategic performance of the HR services delivery function. An emerging trend is to include in the performance measurement process a “scorecard” that is designed to monitor the health of the overall services delivery function and/or relationship. These scorecards go beyond basic blocking and tackling to reflect more subjective measures and ultimately successful outcomes. A key goal is to move beyond the “the service levels are all green but we are still frustrated” issue that exists with many HR service delivery functions/relationships. This “scorecard” approach measures key elements of the services/relationship such as:

  • Overall operational performance
  • Delivery of accurate and complete responses to users of the services (e.g., employees, managers and participants)
  • Ability to resource errors/issues and to assess root cause to ensure they do not repeat
  • Stakeholder satisfaction (measured routinely and broadly)
  • Services innovation (innovation is a key driver for buyers/users of HR services)
  • Voice of the customer
  • Governance process and health
  • Strategic health of the services
  • Ability to meet commitments/deadlines/milestones
  • Ability to keep client/users informed of upcoming changes to services as well as future enhancements and new services

The following diagram shows the evolution of service levels along the continuum of tactical only to measuring both tactical and strategic health.

The evolution is gaining momentum as many service delivery functions (both internal and external) are now in the second or third generation. Don’t be left behind. Start taking steps now to elevate your HR organization’s service levels and drive more sophistication into the process to ensure that the HR services delivery function delivers the utmost benefit to the organization.

For more on measuring the delivery of HR services, read Measuring the Success of HR Outsourcing by my colleague in Europe, Stelios Milonakis.

4 Responses to “Service Levels for HR Services Delivery – An Evolution”

  1. Jim, With so much emphasis on organizational and HRM (not merely HR department) business outcomes, where is the tie made in your model between HRM service delivery and achieving these business outcomes? Also, at a time of major breakthroughs in HRM software, where is the incentive for providers to make the leap — taking their customers with them — to the best of true HRM SaaS (the best of, so not just any) in order to gain quantum improvements in a whole range of important metrics? Is it services innovation to deliver address changes to your mobile or to deliver address changes with enough embedded intelligence to ensure that an employee can propose an address change and get a complete picture of all the downstream implications for comp and benefit plans, taxes, etc. and then guide that employee through those downstream ripple effects when they make a specific change? Lot’s to think about here, and your post got me thinking.

  2. Naomi, thank you for your response. The evolution to looking at more than just the tactical service performance is still in the early stages. We would see the “scorecard” as a tool to create that strategic focus, where more than just the tactical performance measures are tracked and reported on. This will represent a significant change in approach, there is a challenge in that the service delivery organizations (whether internal or external) do not always see the downstream outcomes nor do they feel they can be measured on them. The strategic view is a way to tie things like attraction and retention of talent to business components such as efficiency and customer satisfaction. A bigger challenge is going to be with the software elements you mention. HRM SaaS solutions are still early in their lifecycle and much of the focus is going to be on developing the functionality desired (on a global basis). This is an area where thought leaders and other organizations (such as the HROA) can provide feedback and insights to developers of the software. The first generations of service levels emerging for SaaS are around performance and availability – the more comprehensive experience service level you describe will be a necessary evolution. Regards; Jim

  3. [...] Service Levels for HR Services Delivery – An Evolution, from Jim Koenig – Equaterra So you have an SLA in place, however your [...]

  4. You’ve got great insights about HR Service, keep up the good work!

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