Shared Services Center
A Shared Services Center (SSC) is a centralized unit within an organization that delivers standardized, transactional, or repeatable services such as HR, payroll, finance, IT, and procurement to multiple departments or business units. For HR leaders, SSCs reduce operational costs, enhance efficiency, and ensure uniform service delivery across the organization.
TL;DR
- A Shared Services Center centralizes administrative or transactional services for efficiency and cost savings.
- Improves standardization, service quality, and operational speed.
- Common in HR, payroll, finance, customer support, and IT.
- Helps organizations scale, reduce redundancy, and improve employee experience.
Qandle's HRMS simplifies building HR Shared Services with a unified helpdesk, automated workflows, employee self-service
What Is a Shared Services Center?
A Shared Services Center (SSC) is a dedicated hub that consolidates processes and support functions to serve different business units from one place. Instead of every department running its own administrative operations, the SSC handles these tasks at scale using standardized workflows, automation, and specialized teams.
In HR, a Shared Services Center typically manages:
- Payroll
- Employee onboarding/offboarding
- Benefits administration
- Leave management
- HR helpdesk & ticketing
- Employee data management
This model is widely used by medium-to-large enterprises looking to streamline functions and achieve higher cost efficiency.
Why Organizations Implement Shared Services Centers
1. Cost Reduction & Higher Efficiency
Centralizing repetitive processes eliminates duplication of work, reduces staffing requirements, and leverages economies of scale. According to industry studies, SSCs can reduce operational costs by 20–50% within their first few years.
2. Standardized Processes
An SSC enforces consistent workflows across departments, improving accuracy, compliance, and audit readiness. Standardization ensures that every employee receives the same level of service.
3. Improved Service Quality & Response Time
With dedicated teams and automated tools, SSCs are designed to respond quickly to employee or business unit needs. This improves satisfaction and overall experience.
4. Better Use of Technology
Shared services rely heavily on automation, AI, HRMS platforms, and digital workflows. This leads to faster operations, fewer manual errors, and better reporting capabilities.
5. Freeing Up HR for Strategic Work
When transactional tasks shift to the SSC, HR teams can focus on:
- Workforce planning
- Talent management
- Employee engagement
- Leadership development
Pro Tip: Start with one function like payroll or HR helpdesk before expanding the Shared Services model to other teams.
Functions Typically Included in a Shared Services Center
A modern SSC covers multiple business support functions. In HR, the coverage is often extensive.
1. HR Shared Services
Handles all employee lifecycle transactions:
- Onboarding documentation
- HR queries
- Payroll & benefits processing
- Leave, attendance, and data management
- Exit formalities
This ensures a smooth and consistent employee experience across the organization.
2. Finance Shared Services
Includes tasks like accounts payable, accounts receivable, invoice processing, and financial reporting.
3. IT Shared Services
Manages service desk requests, asset management, software provisioning, and IT support.
4. Procurement Shared Services
Centralizes vendor onboarding, purchasing, PO creation, and contract management.
5. Customer Support Shared Services
For large organizations, customer support hubs function like SSCs by handling inquiries from multiple regions.
Key Benefits of a Shared Services Center
1. Process Consolidation & Improved Control
With all operations handled centrally, organizations gain better visibility and consistency across processes. This enhances compliance and reduces risks.
2. Scalability & Flexibility
As the organization grows, the SSC can handle increased workloads without proportional increases in cost or manpower.
3. Enhanced Employee & Manager Experience
Centralized service desks, faster turnaround times, and clear SLAs lead to improved satisfaction for internal customers.
4. Data Accuracy & Reporting
Since data flows through a single system, SSCs produce clean, consistent, and actionable analytics.
5. Continuous Improvement
Shared services adopt KPIs and SLAs that drive performance improvements through automation and process optimization.
Challenges in Setting Up a Shared Services Center
While SSCs offer significant benefits, HR leaders must manage common challenges:
1. Change Management Issues
Employees may resist shifting to centralized systems. Without communication, SSCs can be viewed as bureaucratic or impersonal.
2. Complexity of Standardizing Processes
Different business units often follow varied processes. Aligning them into one system requires effort and stakeholder collaboration.
3. Technology Integration
Merging legacy systems into unified HRMS or ERP platforms requires planning and investment.
4. Measuring ROI
Success depends on tracking service levels, cost savings, and adoption metrics something not all organizations measure effectively.
FAQs
1. What is the main purpose of a Shared Services Center?
To centralize administrative and support processes for improved efficiency, accuracy, and cost savings.
2. How does an SSC differ from outsourcing?
An SSC is internal to the organization, while outsourcing transfers processes to an external vendor.
3. Which HR processes are usually handled by an SSC?
Payroll, employee data management, onboarding, HR helpdesk, leave and attendance, and exit processing.
4. Is an SSC only for large companies?
While common in enterprises, even mid-sized companies adopt SSCs to improve efficiency as they scale.
5. How do SSCs improve employee experience?
By offering faster service, standardized processes, self-service tools, and centralized support.
6. What KPIs are used to measure SSC performance?
Turnaround time, accuracy rate, employee satisfaction scores, cost savings, and compliance adherence.
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