Not another HR Operating model POV…
A reflection on the future of HR: Siloed HR service delivery models are no longer sufficient to deliver on today's business demands.
Driven by technology disrupting HR operations, we see an increasing need to integrate, collaborate, deliver faster, and, most importantly, bring different skills and mindsets to the table. This emphasis on new skills and mindsets underscores the importance of continuous learning and adaptation in the future of HR.
But what does this mean for how we organize our HR functions? We do not believe there is one magical operating model that will solve the problem. Still, the future of HR should be more agile, data-driven, and, most importantly, focused on experience-driven outcomes. This focus on experience will guide our decisions and actions, ensuring alignment with business outcomes and HR end-goals.
Most midsize to large companies have some version of the “Ulrich model” where shared services answer HR inquiries and run operations, COEs deliver programs and policies, and HR Business Partners provide a range of services, from fielding HR questions and transactions to strategic talent planning. With the seismic shifts in HR technology necessitating both process and skills changes; and ultimately impacting HR organizational design, it is time for HR to evolve and rise.
REVOLUTIONIZE THE EXPERIENCE: MOVING BEYOND HR SERVICES TO HR CUSTOMER EXPERIENCES.
Rethinking HR's Purpose
In the future, HR will no longer just be a service and risk reduction function. HR must define and OWN its core customer experiences, which deliver services to its end users. Reframing what HR does through the lens of the customer experience allows us to solve problems in a more integrated way with shared outcomes and measurements. This new lens means we must look beyond HR to think about the daily issues that employees and managers may face and create practical experiences with digital and human channels to solve them. By doing this, we reshape HR organizational design and the skills needed for HR's success.
For example:
· New technologies such as LLM-driven chatbots can significantly reduce the need for service agents but increase the need for new skills in HR, such as experience design, content editing, and chatbot development.
· Moving to a SaaS HCM requires new skills and teams made up of subject matter experts and technologists to manage quarterly releases.
These changes must be underpinned by a solid operational core connecting accurate HR data and a strategic vision unifying around shared outcomes. This model delivers continuous process improvements and automation, requiring expertise from data scientists, data architects, risk and operations experts, technologists, user experience and design experts, and business strategists.
CREATE AGILITY: FROM COEs > INTEGRATED PRODUCT TEAMS
What a new model could look like
HR teams need to look for opportunities to break down functional silos that have created friction in HR operating models of the past and find ways to collaborate differently, with speed and agility. Technology continues to push what is possible, but organizations must create teams that can solve problems together to take advantage of technological innovation. Bringing together the people who develop strategies, processes, and programs into the same team as those who build, test, and program will be critical to the future success of the HR function. How HR organizes capabilities into these teams also matters, and while there is not one correct answer as to how, there are a few suggested starting points in the market including Bersin's Systemic HR 4 R Framework* where HR is organized into Reskill, Redesign, Recruit, and Retain and Deloitte’s People Product Operating Model*, which organizes HR into Join, Experience, Plan, and Perform. McKinsey summarized 5 emerging trends in this article.
From a skills perspective, HR needs to shift away from its too-heavy reliance on program managers and subject matter experts and towards new skills such as product management, experience design, and engineering expertise. HR senior leadership will need to adopt an entrepreneurial mindset more akin to that of a software startup CEO, leaving behind the quest for perfection and moving towards a celebration of iterative experience improvement.
THE EVOLUTION OF THE BUSINESS PARTNERS: DATA-DRIVEN STRATEGIC ADVISORS, INNOVATORS, AND VALUE CREATORS
This shift in HR's way of working has the potential to unlock and evolve the role of the HRBP to that of a business value creator and innovator. These teams drive a business unit- or geography’s people and talent agendas. They know the people issues of their business intimately, but instead of each creating their solutions in a silo through "projects" relying on scarce resources, in the new model, they share their business issues with the product team, relying on data to help tell their story, and letting product teams solve their most pressing challenges; they remain the voice of the business and the primary customer.
This differentiated approach is where innovation happens; data provides insights to shape solutions that product teams can scale to other parts of the business. Everyone wins. The business partner of the future is a business major with a double minor in HR and technology. They leverage a consultative skillset across organizational design, change and adoption, talent planning, leadership coaching, and technology investments to support their key strategic initiatives.
This change in focus and capabilities will also necessitate a change in the silos of corporate functions at enterprises of scale. The HR Product leader will own their own HRIS and HR Product Strategy. The HRIS technology budget and people will need to be fully embedded into the HR Product Operating model.
Some concluding thoughts
This new way of working requires a new way of thinking about HR and the larger enterprise as a connected ecosystem of services, systems, and experiences. We do not recommend a wholesale shift at once; instead, focus on your business reality. Is your business doing a lot of M&A? Is the business creating a new business vertical? How can you rethink what services you put into a new architecture to deliver better solutions that can drive optimal business outcomes?
We’d love to talk more about how we help shape our clients’ HR Operating Models of the future, get in touch!
www.horizonhuman.com
