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The future of Shared Services in Australia

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30/08/15 | Posted by Administrator

Shared Services - Australia’s skilled accounting staff losing roles to overseas….will these roles return to Oz?

I remember when the term “Shared Services” (“SS”) was bantered around – it was in the early 1990’s when I joined the world of recruitment.  My first thoughts were;

How did it evolve? What did it mean?  What did it involve?  Who specialises in it?  Where did these shared services professionals obtain their skill set?  How do you become a Shared Services expert?

SS is a business model that enables resources to be leveraged across an entire organisation.With many benefits including lower costs due to economies of scale, standardisation of processes to realise best practice, consolidated technology platforms, organisational flexibility and scalability that offers multiple delivery channels, Shared Services has been the “talk of the town” in the accounting recruitment industry for the last 20 years.

Companies such as General Electric and Baxter Healthcare introduced the concept of SS in the US in the mid 1980’s.  In the early 1990’s many global, multi-nationals implemented a SS in their Australian operations including GlaxoSmith Kline (GSK), Mondelez, Shell, BP, Orica, and Lion Nathan to optimise costs and overall performance of the finance function through standardisation.

Over the last 20 years, we have witnessed these Australian based international organisations develop and expand their SS’s departments. Having personally recruited all levels of Shared Services professionals for many of the above named organisations, we now see a massive reduction in SS hire.

With higher operating costs, a large majority of Australian based Shared Services Centres (SSC) have been relocated to overseas outsourced providers based in India, Philippines, Malaysia and Vietnam where labour hire and other operating costs are significantly cheaper.    Some organisations have moved part or all SS positions offshore including GSK and Orica to India and Mondelez, Shell and BP to the Philippines.

What does this mean for the shared services professionals based in Australia?  For many, their roles are now redundant due to the off-shoring of these SSC’s.  Particularly over the last 12 months, our consulting team have interviewed and provided career counselling to a high number of SS Managers, Team Leaders and accounts payable, accounts receivable and payroll specialists.

What AC has identified is that many of these shared services specialists have been employed with these organisations for lengthy periods, meaning CPI and remuneration increases to salaries are not consummate with the current market remuneration structure.

Not only are the Australian based shared services professionals losing jobs but also undergoing reduction in their anticipated salary earning capacity.

There are definitely rumblings that it’s not all rosy for specific roles based overseas, including accounts receivable, credit and customer services where Australian customers prefer “relationship” based service.  After moving their credit card operations to India in 1999, Coles Myer was forced to return some of its credit card operations to Australia in 2004 following customer complaints.

Maybe some of this off-shoring may return to Australia? Leave a comment…we would love to hear your thoughts.

Maree Lacy
Managing Director
Accountancy Connect