CHROs and VPs of HR have long strived to make their HR functions more agile, efficient and business-focused. This is increasingly true in recent years, as global markets have become more erratic and unpredictable. We still see many businesses today, particularly MNC’s, either utilising or transitioning to the traditional three-pillar structure designed by Ulrich to achieve optimal efficiencies.
Transforming HR Operations in this way was most often done to reduce costs and to streamline processes, but organisations today are increasingly using this model to improve the quality of services and upgrade the customer experience. The ideal scenario would result in a stronger and more effective employer brand, thus ultimately targeting continued commercial growth via strong people strategies.
One of our clients describes HR Operations as the ‘shop window’ to the vast majority of the employee base, and as such, it’s important to be clear and thoughtful around what HR service delivery model the company is working toward. It’s also critical to have a clear understanding of how that model will support the business and empower employees through its people strategies. Organisational leaders now realise that if they want to develop a more agile and resilient business, a critical element of this requires the development of talent across the entire employee population, not only those on key leadership teams.
Cost Management → Service Quality → Efficiency
COST MANAGEMENT - Almost universally, with so much economic volatility today, the question has become one of how to manage HR as effectively as possible to ensure that it is not a huge cost to the business, and that it adds significant value through increased employee engagement. A number of organisations believe that if customers and the business feel supported by HR, this will be a critical element towards continued success over the coming years.
SERVICE QUALITY - Another key component is how to leverage economies of scale across diverse, multicultural populations, and create CoEs and expertise around HR Operations. By consolidating these activities and therefore freeing business partners from the more operational elements, it can allow them to become more connected with the business.
EFFICIENCY - Multinational companies are looking more closely at how their CoEs builds value both globally and in local markets or specific business units. This can be done in a multitude of ways, from having up to two or three various low cost market-specific Shared Service centres per region, to having a more decentralised CoE operation incorporating Regional CoE heads with local teams, rather than solely global CoEs at HQ.
Agility in Talent
One SVP and Global Head of Talent & Learning at a multinational technology company, explains that the organisation has made a strategic choice to move from a 2 pillar to a 3 pillar model, which allows them to strengthen the HR Business Partner role, increase innovation through creating CoEs and ‘incubate’ teams to become champions of the functions.
Through a mix of creating intuitive Learning & Development strategies, unlocking hidden talent, developing a strong succession pipeline, and encouraging mobility within the organisation, companies should be able to react more quickly to changing market conditions.
Employee mobility is becoming increasingly important as an agility tool. The ability to move talent internally across locations, business units and functions, brings a new competitive edge, and in conjunction with continuous upskilling, is likely to encourage employee retention.
From Admin to Driving Efficiency
HR Operations has traditionally been associated with very administrative, high volume backoffice work that was typically outsourced to developing countries and had mixed results in terms of effectiveness. However, in today’s more sophisticated businesses, HR Operations partners with senior leaders on how to deploy the people strategy, managing local and multi-country restructures, proactive recruiting, graduate and talent pipelines, and so on. To provide these types of services, companies are putting some key talent into HR Operations roles and populating the senior HR Ops leadership teams with recognised senior leaders.
In Conclusion
While some HR transformations have originated as an exercise in cost reduction, companies have now realised the broader value and efficiencies around service quality, talent development, and customer experience. Equally, by embedding highly visible, well-regarded HR Leaders within HR Operations, this signals a cultural shift that can lead to a newfound respect for HR Operations.
The most agile organisations have realised that a key requirement to negotiating today’s volatile markets and staying ahead of the competition is through developing talent both within HR Operations and across the entire employee population to ensure continued success.
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