The move to HR and payroll shared services may be all about cost reduction – but if that’s the only story you tell business managers, you’ll struggle to get their buy-in. In fact, there are other far-reaching benefits that make it more attractive than similar cost-cutting measures, and can help get a project off the ground faster.

Webster Buchanan’s Multi-country Payroll Forum is currently conducting a qualitative study of managers with responsibility for HR and payroll shared service centres, which will be distributed to Forum members in February. The message that’s coming through loud and clear is that while cost is a major driver for any centralisation project, particularly in the current economic climate, if you don’t create other pulls from the business, the project simply won’t happen.

Shared service centre managers consistently emphasize this message: while you need strong endorsement from above, HR and payroll shared services is not something you can easily impose on a business that’s fearful of losing its local point of contact and control. Rather, you have to create demand through strong communication of the benefits. “Getting over the people change barrier is one of the greatest barriers to change,” said one manager.

In a project to centralise HR and payroll at a large healthcare provider, he worked with the HR manager to try to get managers on board, encouraging early adopters to sell the benefits to their peers. “The business was against what was happening because they thought it would impact adversely on what they were doing. We knew we had to sell it to the business even though the decision had already been made that it would happen."

This internal endorsement is often a key driver of wider adoption of shared services. One manager of a UK shared service centre has found demand for its services across central Europe following early success in a Western European country. “The key to it all is you’ve got to have a pull from the business, rather than a push from the service centre.”

Another manager, working at one of the largest employee administration service centres in Europe, said: “I think it’s all about cost – if there is no cost benefit in it, it doesn’t happen. But I do think there are other benefits behind the cost which mean that it’s worth making the investment. So if it takes three months to repay the investment, and if you’re competing with other projects in the business, because of the additional benefits you get, you’ve got a chance.” Additional benefits might include the ability to introduce a new or combined technology platform, and with it greater process automation, better integration between HR and payroll, reduced support costs and less errors.

Another executive using an offshore model highlighted the benefit in timeliness of a shared resource. Not only will the centre be more efficient, meaning processes and data upload should be faster, but if it’s in a different time zone, it can process data overnight and return it the next morning – so-called “follow the sun” processing. In a discipline that’s so focused on deadlines, improved timeliness can look very attractive. And shared resources should also be easier to scale up and down, as the business grows through acquisition or cuts headcount.

Any executive implementing HR and payroll shared services has a difficult balancing act to perform, particularly in the early years while the centre is finding its feet. Pinpointing the benefits and then selling them internally is one prerequisite to success.