A new operating model for HR

There is a pressing need to redesign the role of HR as the traditional model of HR is not keeping up with business, writes Josh Bersin

Pressure has been building on the human resources function during the past few years. Organisations are struggling with a number of talent challenges (global skills deficits, leadership gaps, challenges to hiring in high-growth economies, low employee engagement), driving CEO and COO attention on the people side of the business.

I met with the heads of HR for three global banks and each told me a similar story: their company is going through a massive shift in corporate culture, staffing is harder than ever, and the company suffers from a lack of global leadership pipeline. Every major industry faces similar issues.

Over the last 20 years HR has evolved in its role. Traditionally viewed as an administrative function, HR has been restructured to focus on providing “business partners” – roles located in the business who are assigned to help line managers with staffing, development, coaching and various other talent needs.

These business partners are supported by centres of excellence or “COEs” – small teams, often located in corporate headquarters, that design and deliver various HR programs around the world. Often called the Ulrich model (named after Dave Ulrich), this structure has been in use for a decade around the world. In theory it provides a high degree of business support coupled with strong HR programs that are consistent around the company.

Unfortunately, the world has changed.

Today, organisations are flatter, HR must serve the needs of all employees (from the CEO down), and people expect HR data and applications to be available online. Managers and team leaders need continuous skills and management development, and the role of the “manager” has changed from that of supervisor to that of coach or team leader. Recruiting is more competitive than ever, and a company’s employment brand is now widely available on the internet.

“Ultimately, HR’s value is in helping to deliver high-impact people results. Local skills, empowerment and standards are the answer”

Most importantly, the world has become highly interconnected and local, so companies need HR programs that are customised for local fast-growing markets. The traditional model of HR, that of COEs and HR business partners, is not keeping up.

Our research shows that companies need a new combination of “local empowerment” and “local HR and talent expertise” coupled with strong standards and common systems across the enterprise. We call this new model “high-impact HR”. It focuses on developing deeper levels of expertise in the local HR business professional.

Our research shows a need to redesign the business partner role into three roles (recruiting lead, leadership and OD lead, and employee relations lead) and provide these people with training and in-depth expertise at a local level.

In this new model, HR decisions are made locally (within these standards) and people learn from each other through “networks of expertise”. The COE still exists, but it is smaller and more focused on collaboration and standards development, with less focus on designing every HR practice. In high-impact HR, decisions are made closer to the business, the HR function is more agile, and the core HR teams focus on planning, analytics and strategic corporate talent needs.

Companies like Xerox and Juniper have already adopted this model, and we expect many more to do so in the coming years. In today’s talent-constrained economy, HR plays a more important role than ever. Think hard about your HR service delivery model and ask yourself “how well are we keeping up?”

Ultimately, HR’s value is in helping to deliver high-impact people results. Local skills, empowerment and standards are the answer. For more information, read our complementary whitepaper about meeting the needs for HR in a globally local world available here.