The right location is vital to the success of a shared service centre, with businesses needing to consider the costs, risks, infrastructure and the quality of people available. A poor decision can be costly and time-consuming.
We explore some of the key factors to consider.
The quality of people, their availability and cost of labour is arguably the main driver when evaluating a location for a shared service centre. Businesses need to consider the talent in the local market and whether the depth of people with the skills and experience you require is sufficient for your purposes.
Employers need to evaluate the local education environment – for example, are there Universities in the area and are they producing high quality graduates? They also need to think about the local business landscape – what other companies are based in the area? Often other businesses help attract high-calibre candidates to the region and ensure a constant flow of strong talent into the market.
Language skills are also regularly required within the workforce of a shared service – where this is the case, does the location have a supply of candidates with the languages you require? Businesses will need to evaluate the social, political and economic environment and explore any challenges there could be.
Also, what is the likely cost of labour? Businesses need to thoroughly explore market rates for the professions they are looking to hire for. You will also need to consider the talent pool when evaluating these costs – are there enough candidates available? Or would the business need to headhunt and/or encourage professionals to relocate from other areas? Where there are talent shortages, professionals are generally aware of their worth.
All costs associated with a location need to be considered. This ranges from the cost of labour, premises and infrastructure to tax implications and relocation costs. It’s not always as simple as finding the cheapest option. The cost needs to be balanced with other factors such as the strategic objectives of the shared service centre, the quality of the workforce and the associated risk of a location.
Risk and legal/regulatory issues
Each location will present different risks and potential difficulties. Businesses will need to evaluate the social, political and economic environment and explore any challenges there potentially could be. Business stability and ensuring minimal disruption are fundamental requirements. Businesses may consider a location that provides no risk is worth paying for compared to a low cost location that provides higher risks. Local legal and regulatory issues are also important – what are they and how much of an impact do they have?
Does the location have the premises and infrastructure to meet your demands? This includes having the available space (at the right quality and cost), transport links (roads, trains etc) and IT infrastructure such as fast internet access. You will need to consider the long-term strategy of the shared service centre and whether the location can ultimately support this.
If you would like to be put in touch with a shared service centre that is based in the Midlands that can offer experience and advice on locating a shared service to the region contact firstname.lastname@example.org on 0121 281 5000.