The Evolution of the HR Operating Model

Evolution of the last decade

HR emerges into the modern organisation with the formation of the first Personnel Department around 1900. whereas in the late 80s the predominant HR Operating Model was the three-legged stool of the Ulrich Model. Ulrich started researching HR from the perspective of customer satisfaction and skills required in HR.

In 2010, with the clouds of the financial crisis still firmly in our minds, significant cost-cutting programs were implemented, as well as cost savings in the HR function itself. Year on year the focus on HR cost and HR service quality continued. The drivers for HR transformation in business were:

  • Adjustment of HR strategies to high cost / low-cost markets
  • Simplifying HR policies and standardise HR processes
  • Enhancement of leadership
  • Building and managing of capabilities globally
  • Driving higher levels of productivity and performance

The core of the HR Operating Model nowadays consists of the HR Business Partner (BPs) roles, supported by a central team and platform for transactional services, and a group of specialists in Centers of Expertise (COEs). HR resources were taken out the teams, and functions were created in the central COEs and in HR services provider team (Shared Services inhouse or outsourced).

The methodologies used are lean and agile, and are being applied to also other areas of business, including the HR function.

The HR BPs are business coaches with a full range of specialist tools at their disposal. They provide input for strategic analysis to business management at group and business unit level. The partners translate strategic choices into HR consequences.

The HR advisor/ service provider include a wide variety of roles – both internal and external to the organisation – and are placed at the center of the model where they should be as the focal point for delivery of HR capabilities. They deliver excellent service at lowest possible costs with work instructions and agreed services level agreements.

Communities / Centers of Expertise (COEs) drive leading practices and processes by applying deep HR functional domain knowledge, a strong understanding of business imperatives, and market trends to deliver thought leadership.

The challenge still is, the ability of the center's self-service platform for managers and employees. Another challenge is the unified and standardised approach driven by risk and compliance requirements. A one size fits all approach might create an increase of risk and compliance functions.

In the end, not all work anticipated to be carved out from the HR BPs is designed to be executed by the HR service provider teams, due to their lack of local knowledge or local language requirements.

This work is ending up either with the HR BP, an HR advisor/administrator (to be recruited) or to be transferred to the business leader/managers or HR consultant.

An optimal solution has to be found in the near future, as it will take some years to support HR and business leaders in their new role, with additional tasks and self-service tools to make sure they get things done. The imperatives of efficiency and cost reduction have always been part of the HR evolution. But now, driven by the global economy, emerging markets and demand, HR will be spending more and more time by supporting and driving a whole new range of business initiatives.

More News