Reference no: EM133001979

LO 1: Evaluate the contribution of HRM functions to the development of an effective strategic HRM role
LO 2: Critique the contemporary challenges faced by HR practitioners in establishing a strategic HRM function
LO 3: Evaluate the importance of employees in the formulation and achievement of organisational strategic goals

Case study : Unilever and Peoplelink

Unilever is a major manufacturer of food, home care and personal products including margarine, tea and Dove soap. This British-Dutch multinational company (MNC) operates in more than 100 countries and employs 170 000 people worldwide. In 2003 Unilever introduced the human resource (HR) shared services centre PeopleLink. This was Unilever's first attempt to run human resource management (HRM) as a business. The transactional and administrative components of the HR function were no longer performed by HR managers in the field' but embedded in the shared services centre (SSC). The introduction and operations of PeopleLink were soon considered successful with regard to cost reduction. 9internal) customer satisfaction and cost effectiveness. This transition from the 'traditional' personnel management by personnel managers to the introduction of a SSC was just a first step in a new era of HR restructuring within Unilever. In 2006 the British-Dutch MNC signed a contract with Accenture to outsourcc and offshore all HR shared services. From that moment on mainstream HRM would be handled by a regional network of Accenture SSCs. The more strategic HR. issues for example, organisational change and strategic decision making , were still tackled from within Unilever, but the basic HR practices (e.g. recruitment and selection, training and development and compensation) were under the umbrella of Accenture.

However, is the outsourcing and offshoring of PeopleLink a blessing or a nightmare for those involved?

Over one-third of all HR professionals within Unilever were about to lose their job as a result of the outsourcing and offshoring operation. For those who stated new challenges emerged as strategic partners and change agents. It is unclear whether the line managers were happy about the HR restructuring. In the past line managers could meet face to face with HR professionals. From now on the main contacts between line management and HRM would be through a telephone line (with Prague) or through intranct communication. It is also unclear whether the employees were happy with the new situation either. For them it might also have led to a further depersonalised relationship with one of the key staff functions of the organisation. An SSC and the outsourcing/offshoring of it can result in cost reduction, but what about its impact on employment relations, for example between employees and HRM or between line managers and HR

The questions

1. What do you think of the impact of Unilever's transition to outsourcing and offshoring HRM on the FIR professionals within Unilever?

2. The HR professionals that stay within Unilever after the outsourcing and offshoring of PeopleLink will operate more as strategic partners and change agents. What is the impact of this organisational change on the position of these HR professionals within Unilever?

3. What are the potential negative effects of this organisational change on the (internal) customers of Unilever (employees and line managers)