The Engine Room of the Future: Why Centralised Shared Services Is the New Operating Model

In the current global economic climate, organisations are caught in a paradox. On one hand, there is immense pressure to optimize costs—recent data indicates that approximately 21% of organisations have already moved to decrease their overall HR budgets. On the other hand, the competition for critical talent remains fierce, with 66% of HR leaders expecting increased talent competition in the immediate future.

Organisations are being asked to do more with less, while simultaneously needing to be more agile than ever before.

How do you reconcile these opposing forces?

For decades, the answer was the "three-legged stool" model: Business Partners, Centres of Excellence, and a transactional Shared Services centre. But that model is creaking under modern demands. Research shows that only one out of every three HR leaders believes their current structure allows them to adapt quickly to changing business priorities. Even more concerning, only 40% believe their structure effectively separates transactional tasks from strategic ones.

To fix this, we must stop treating operations as a back-office utility and start treating it as a strategic asset. The driving factor for the Global Capability Centres (GCCs) of the future is the shift toward a centralised Global Shared Services model—specifically, an expanded Operations and Service Delivery Team.

This isn't just about cutting tickets; it is about building the operating model of the future. Here is why this centralised engine is becoming the requisite model for global operations.

The Evolution: From Support Function to Strategic Engine

The most significant shift in the operating model of the future is the consolidation of fragmented support functions into a single, centralized unit led by an HR Chief Operating Officer (COO).

This is not a traditional "Head of Shared Services" role. The HR COO serves as the function’s operational "eyes and ears," working closely with the CHRO. Their mandate extends beyond efficiency; they are responsible for optimizing technology, managing talent data, automating activities, and maintaining relationships across agile teams to ensure collaboration.

Under this leadership, the centralised team evolves into a robust HR Operations and Service Delivery Team. This team acts as the engine room for the entire enterprise, built upon four modernised pillars that fundamentally change how work is done.

Pillar 1: The Multitiered Service Architecture

The first driving factor of this new model is a sophisticated approach to service stratification. Traditional shared services often fail because they treat all inquiries as equal, clogging the system with administrative noise. The future model utilizes a Multitier Approach, separating activities based on complexity and criticality to maximize efficiency.

This isn't just about triage; it's about resource optimization.

• Tier 0 (The Digital Front Door): Handling 50-60% of volume, this tier involves little to no human intervention. It leverages automated services, portals, chatbots, and knowledge bases. Employees handle basic tasks—like changing benefit elections or accessing PTO policies—independently. This reduces the cost of ownership significantly while empowering employees with instant answers.
• Tier 1 (Administrative Support): Accounting for 20-30% of volume, this tier consists of generalists handling routine transactional support, such as employee data management.
• Tier 2 (Specialised Expertise): Taking on 10-15% of the load, this tier involves subject matter experts handling complex issues, such as extended medical leave or cases requiring specific Service Level Agreements (SLAs).
• Tier 3 (Strategic Resolution): The final 5-10% comprises high-level strategic support from policy experts. These are the "heavy lifters" for sensitive employee relations escalations or program management issues.

By rigorously categorizing work into these tiers, the centralised model ensures that high-cost talent is never bogged down by low-complexity tasks, freeing them to focus on strategic work.

Pillar 2: Human Capital Intelligence (HCI)

Data can no longer sit in silos or be relegated to basic reporting. In the future operating model, the centralised team integrates Human Capital Intelligence (HCI) as a cornerstone capability.

We are already seeing this shift: 69% of shared services teams now include or plan to include a dedicated data and analytics team. But HCI goes beyond generating spreadsheets. It provides targeted, advanced analytical support to enhance strategic capabilities.

In this model, HCI teams are consulted to source new ways to model different scenarios—such as simulating the impact of a new hybrid work policy on retention or maximizing engagement across specific demographics. By centralising HCI, the organization ensures that data is not just "reported" but is used to drive decision-making. The HCI function becomes customer-centric, flexing its priorities as manager and leader needs change, ensuring the business is analytically aligned with its goals.

Pillar 3: The Rise of People Relations Managers

One of the most critical innovations in this centralised model is the introduction of People Relations Managers.

Historically, HR Business Partners (HRBPs) have been overwhelmed. They are expected to be strategic architects, but they spend their days fighting fires—dealing with compliance issues, employee relations (ER), and routine manager coaching. The centralised Operations and Service Delivery Team solves this by absorbing these responsibilities.

People Relations Managers form a centralised pool dedicated to addressing employees' and managers' most urgent functional needs. They handle compliance, ER issues, and people management coaching. This role is vital for two reasons:

1. Employee Experience: It ensures that urgent issues are handled by dedicated experts rather than a distracted generalist.
2. Strategic Liberation: It strips the transactional burden away from the Strategic Talent Leaders (formerly HRBPs), allowing them to focus entirely on innovation and high-level talent strategy.

Pillar 4: People-First Technology Infrastructure

Technology ownership is shifting to the centre. Currently, 70% of shared services teams own the technical infrastructure for transactional work. In the future model, this evolves into a People-First HR Technology Team.

"People-first" is not a buzzword; it is an operating principle. It means that processes, structures, and team capabilities are aligned to create a seamless experience for the workforce. This team is responsible for agile project management, roadmapping, and driving the adoption of innovations like artificial intelligence and machine learning.

Crucially, this team is responsible for improving key business metrics around diversity, equity and inclusion (DEI), well-being, and collaboration. By centralising technology ownership, the GCC becomes the engine for digital transformation, ensuring that the hybrid workforce remains connected and productive.

The Strategic Unlock: Enabling the Wider Organisation

Why is this centralised model the driving factor for the future? Because it is the only mechanism that allows the rest of the organisation to become truly strategic.

The GSS model acts as a fulcrum: by bearing the weight of operations, data, and technology, it allows other roles to pivot toward high-value activities.

1. Reinventing HRBPs into Strategic Talent Leaders With operational burdens shifted to People Relations Managers and the Multitiered Shared Services, the HRBP role can finally be reinvented. They become Strategic Talent Leaders, aligned with specific business units but freed from the day-to-day grind. They rely on the HCI team for data interpretation, allowing them to use "data judgment" to drive business outcomes rather than spending their time cleaning data sets.
2. Creating a Dynamic Pool of Problem Solvers The efficiency of a centralised GSS allows for the creation of a "Dynamic Pool of Problem Solvers." This is the "flex muscle" of the function. It consists of agile teams that can be redeployed to work on specific strategic projects—such as revamping an onboarding process or implementing a new diversity recruiting strategy. Because the GSS provides the underlying infrastructure and data, these problem solvers can move fast. They hypothesize, test, and build solutions without getting stuck in administration.
3. Next-Generation Centres of Excellence (COEs) Traditional COEs often struggle to balance policy design with implementation. In the future model, the operational aspects of their work are redistributed to the centralised Operations team. This allows COEs to become leaner, "Next-Generation" entities that focus purely on deep expertise and rely on the shared services infrastructure for execution.

Competencies for the Future

Building this centralised engine requires a shift in talent strategy within the shared services function itself. It is no longer enough to hire staff who are simply good at administration. The workforce of the future GSS must possess a sophisticated competency model:

• Systems and Technology Use: Staff must display working knowledge of complex systems and access data efficiently.
• Customer Focus & Active Listening: It’s about empathy. Staff must treat internal employees as customers, asking clarifying questions and making extra efforts to satisfy needs.
• HR Knowledge: The ability to accurately and quickly identify inquiries that require escalation to a higher service tier is essential to maintaining the efficiency of the multitier model.
• Analytics and Coaching (For Managers): Leaders within this function must be adept at interpreting statistics to identify performance patterns and coaching employees for increased results.

Conclusion: The Operating Model of the Future

The centralised Global Shared Services model—reimagined as a comprehensive HR Operations and Service Delivery Team—is the driving factor for the future because it solves the fundamental problem of modern operations: the need for both scale and agility.

By consolidating Shared Services, People Relations, Human Capital Intelligence, and Technology under the strategic oversight of an HR COO, organisations can achieve the cost optimization required by today's economic uncertainty. But more importantly, this centralization transforms the back office from a cost centre into an intelligence engine.

Think of it this way: In the past, the "driver" (Strategy) had to manually check the engine, navigate the map, and crank the windows. The new centralised model acts like the computer system of an autonomous vehicle. It creates a centralised intelligence hub that monitors the engine (Shared Services), manages the navigation data (HCI), and regulates the internal climate (People Relations).

When the operations are intelligent, centralised, and automated, the business is finally free to focus on the destination. This is not just a structural change; it is the operating model of the future.