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Public sector organisations lose out on benefits of shared services by overestimating challenges, according to MidlandHR

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Public sector organisations are overestimating the challenges associated with implementing shared services with one of the starkest areas of disparity being job security, according to research commissioned by MidlandHR

The research, HR and payroll shared services in the public sector - perceptions and realities, surveyed the opinions of over 100 UK public sector representatives, from functions spanning HR, payroll, finance, purchasing and IT.

The majority of respondents (72%) were from government and education, with blue light services and health organisations also included.

Organisations generally anticipated more negative impacts than proved to be the case for those who had already implemented shared services.

This negative perception was most significant for areas like job security, where 67% of respondents felt that sharing services would impact negatively. This figure increased significantly for operational employees where 8 in 10 feared for their jobs. In contrast, out of those that had already implemented shared services, over half reported a positive effect on job security (51%) and career development (53%), while the positive effects on skills development (81%) and job satisfaction (74%) were even more convincing.

Commenting on the findings, MidlandHR's product strategy manager, Karen Bull, said: "What this research highlights is the tendency for organisations and individuals to overestimate the difficulties of shared services and to underestimate the benefits that can be delivered. Those organisations not sharing anticipated that a shared service would be significantly less positive in areas that are closest to employees' hearts than those already sharing had experienced."

The top drivers for implementing and the top benefits realised once sharing were the same, identified as process efficiency, service quality improvement and cost savings. "It's great to see such aligned results," added Bull, "showing that organisations are in fact meeting their desired objectives."

The survey consistently showed that perceived barriers were more keenly felt than had been the actual experience of those already sharing. The top perceived barriers were predominantly non-tangible and emotive in nature, such as fear of loss of control and job security, whilst upon implementation of the shared service these were superseded by more practical challenges: the need to develop new service and technology skills, technical issues and implementation time. Interestingly, redundancies were at the bottom of the challenge list.

Bull added: "The perceptions and realities are reflective of our experience of implementing both, shared service projects in the public sector and outsourcing projects in the commercial sector. Realising the benefits of a shared service is an easy battle, but the winning of hearts and minds is the war to be won."