HR assurance services

Increasingly tough competition is forcing companies to be faster and better in administrative areas such as human resources. But in order to keep up their quality level – despite static or shrinking budgets – they will need to rethink their HR structures, processes and systems. This should not, however, come at the cost of compliance, as the intensification of competition is being mirrored by a fundamental change in legal standards.

HR shared service centre assurance

More and more, companies are opting for HR shared service centres (HR SSCs) in order to remain competitive. The goals: reduce costs and increase efficiency. Along the way, however, companies will have to overcome obstacles related to the issue of compliance:

• HR SSCs are usually organised in the form of separate legal entities. To delimit and clearly define the scope of duties of an HR SSC, service level agreements must be established. They form the contractual framework under which an HR SSC operates.
• HR SSCs often work internationally. Thus, it is necessary to install a well-structured and sophisticated authorisation concept in order to appropriately limit access across countries.
• HR SSCs work with very sensitive data. It is therefore important to ensure a high level of data security that takes into account the varying data protection requirements in the client countries.
• HR SSCs often use a standardised HR system. All IT processes should be configured accordingly in order to ensure operation in accordance with the relevant statutory provisions and pronouncements.

It is worth noting that certain aspects of an internal control system are often overlooked when setting up an SSC.

Regardless of whether you have complex HR structures, are setting up an HR SSC or have already done so, we can offer you a range of process analysis, optimisation and auditing services for developing custom compliance solutions. We help you build a compliance management system and work with you to ensure that your organisation can act efficiently, flexibly and quickly – and that it can react to changing regulatory requirements.

Critical success factors in the introduction of an SSC:

HR assurance services and compliance

Compliance check of HR processes and controls

Processes within the HR department have an impact on the entire organisation and are therefore bound by a number of restrictions. PwC helps companies streamline their internal control systems to ensure that all applicable requirements are taken into account, and supports them in managing and standardising the processes so that maximum effectiveness is achieved. An important aspect is the automation of processes and the reduction of manual activities.

The focus is always on the individual company. The adopted measures must be implementable, be supported by all stakeholders, and result in greater quality and security in a lasting way. For this reason, PwC’s specialists work very closely and intensively with the process owners. During implementation, PwC supports the process documentation, communication and development of controlling tools. In addition, our teams support companies in anchoring the processes and control rules in their organisation in order to ensure sustainability.

Compliance check of HR systems

On the basis of our best practices approach, PwC reviews the necessary settings and processes of clients’ HR systems to ensure orderly, productive and sustainably available HR authority. All IT processes need to be coordinated in such a way that the HR department can work in accordance with current laws, norms, in-house policies and quality standards.

Is a major release upgrade or a system migration planned? Or does the client want to build a completely new HR system landscape? If the answer is yes, the HR databases will need to be migrated correctly. Likewise, various tests need to be carried out to verify both the functionality of the processes and the payroll results. Are the tests successful? Are the steps in the cutover planned well? Is the migration carried out completely and correctly?

PwC’s experts can make a difference here. The success or failure of a system change is primarily dependent on the concepts, the planning, the testing phases and the correct technical implementation. Our experts have extensive experience in this area and assist clients in their HR projects – from planning through to successful implementation.

Compliance check of HR security

Many companies use their systems across countries and across their organisations. When dealing with personal data, however, there is a heightened sensitivity regarding data protection. In addition to securing physical access to HR data, the regulatory environment also considers there to be a risk of improper and misuse of system stored HR data.

User and authorisation administration in the SAP HCM module is very complex. The data model and the existing control/customising and role functionalities are correspondingly difficult to configure. Therefore, it is necessary to introduce a well-structured, well-conceived and audit-proof authorisation concept in order to limit access appropriately. PwC reviews the authorisation concept of our clients for vulnerabilities or creates with them a user and authorisation concept that is tailored to the company and is auditable. The experts in SAP HR authorisation concepts support clients in optimising their human resources in terms of efficiency, compliance and privacy issues.

Digital personnel file

HR data is sensitive information that must always be available and up to date. A paper-based personnel file only partially meets this requirement. For example, in decentralised organisations, paper-based personnel files are often transported for processing from one agent to another. Each milestone – from the resume to the employment contract to the appraisal – increases the amount of paper in the personnel file. The space for file archives is, however, limited. In the modern HR environment, therefore, electronic files set the standard. The digital personnel file is more than just a collection of documents: it is an alternative to the time-consuming and space-consuming paper file.

The advantages of an digital personnel file: transport and storage costs can be reduced and search times can be optimised. Linking e-personnel files to a master human resources management system allows all employee information in the HR arena to be accessed digitally at any time.

PwC experts assist companies with the introduction of digital personnel files; with defining the objectives; with developing, on that basis, an efficient and legally compliant target concept; with selecting the necessary software; and with introducing and integrating it into the existing HR process management system.

PwC’s services include

• Support with the development of HR compliance management systems
• Performance of internal audit tasks
• Preparation of reports according to ISAE 3402 type I/II or IDW 951 type A/B
• Identification of starting points for developing optimised process structures
• Support with the introduction of electronic personnel files
• Review of HR processes for compliance with requirements under the Act to Modernise Accounting Law (Bilanzrechtsmodernisierungsgesetz, or BilMoG), the Corporate Control and Transparency Act (Gesetz zur Kontrolle und Transparenz im Unternehmensbereich, or KonTraG), Section 91(2) of the German Stock Corporation Act (Aktiengesetz, or AktG) or Section 404 of the Sarbanes-Oxley Act
• Assessment of controls for HR measures, master data management, time management, payroll, payment and accounting
• Review of IT processes to ensure correct and timely payroll
• Support in ensuring orderly system changes and migrations
• Assessment of customising with regard to corporate structure, control data, wage types and rates, table logging, IT programme maintenance and SAP change management
• Review of all concepts and system-side settings to protect sensitive HR data
• Creation and establishment of user and authorisation concepts
• Review of critical authorisation combinations
• Review of SAP authorisations for the basic use case, organisational management, HR administration, time management, payroll, special situations and portal/self-services