Create an agile, adaptable, future-ready HR operating model by revolutionizing the way HR works.
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HR Operating Model: Revolutionize HR and Adapt to Change
Increase HR’s strategic impact as you build your future HR operating model
New global challenges are shifting HR’s top priorities. Yet only 30% of HR leaders believe their current structure allows them to adapt to this change.
Download this playbook and look more closely at the areas that progressive CHROs focus on when shaping a more adaptive, flexible, value-generating HR operating model. You’ll better understand:
The four imperatives for increasing HR impact
Sample action plans to deliver on each imperative
Rationale and ideal outcomes for each scenario
Upgrade your HR operating model to support changing business needs
The HR operating model of the future is a set of guiding principles to help every HR leader achieve their functional goals. Progressive CHROs focus on these four key activities.
- Reinvent the HRBP Role
- Designate Problem-Solvers
- Form Next-Generation COEs
- Enhance Service Delivery
Elevate the senior-level HR business partner role to strategic talent leader
HR business partners (HRBPs) are the core of effective HR functions. Progressive HR operating models redesign the senior- or VP-level HRBP role toward a more analytically oriented strategic talent leader and reallocate transactional tasks and time-consuming, routine activities to people relations managers (see Tab 4).
Strategic talent leaders tackle the most pressing talent opportunities and challenges throughout the organization. Similar to present-day HRBPs, they are aligned with a specific business unit or function, and they own talent management strategy for that group.
Effective strategic talent leaders must be able to think holistically about the strategy of the business and talent processes that support the business’s goals. Success in this role requires a combination of:
Breadth and depth of experience within HR and potentially other functional roles (e.g., in finance or IT)
Strong business acumen and stakeholder management skills
Strong consultative problem-solving skills and the ability to collaborate and network both within the HR function and throughout the organization
High levels of proficiency in data judgment and analytics to assess HR progress and quantify the value of HR’s impact on the business
To enable strategic talent leaders, we recommend reallocating the operational responsibilities of the HRBP role, such as compliance and employee relations tasks, toward the role of people relations managers and shared services within the HR operations and service delivery team. By removing operational burdens from the strategic talent leader role, these leaders have more space to focus on innovation and strategic thinking.
Strategic talent leaders focus primarily on data to understand the state of talent in the unit. As a result, they have much less day-to-day operational contact with mid- and lower-level managers and frontline employees. This role might not be well-suited for HRBPs who would feel out of touch with their business unit or function without these firsthand interactions.
To implement the strategic talent leader role at your organization, take the following steps:
Define the role of the strategic talent leader, including the scope of responsibilities and competencies required.
Evaluate your current pool of HRBPs for role fit and discuss career options for HRBPs who would be better suited for roles in the problem-solver pool (see Tab 2), next generation COEs (see Tab 3) or with the HR operations and service delivery team (see Tab 4).
Reallocate operational HR activities and current HRBPs to the HR operations and service delivery team.
Add a pool of strategic problem solvers to your HR operating model
A pool of problem solvers that works on various strategic projects is critical to the success of the HR operating model of the future. This team creates and upgrades resources, practices and policies used by HR and the workforce. It effectively enables HR to solve its most pressing challenges and deliver strategic impact using agile practices.
Agile practices deliver value in small but consumable increments. Initially used mainly in IT project management (think: successive updates by software development teams), agile incorporates a set of values designed to make teams more responsive to change.
HR operating models that include a problem-solver pool use agile methods and processes while working alongside end users to yield customer-centric solutions. According to a Gartner survey, clients use their pools for projects like revamping onboarding processes, refreshing competency models, updating employee value propositions and implementing diversity recruiting strategies.
Effective problem solvers should meet the following criteria:
They must be comfortable working in creative and iterative ways in order to incorporate feedback and develop client-centric solutions aligned with business priorities.
They must be able to manage stakeholders and relationships, including collaborating within HR and throughout the organization and tailoring communications to their audience to foster trust and implement change.
Problem-solver pool leaders should have strong project management skills and must also work to create an environment conducive to risk taking, in which it is safe to fail.
You can source problem solvers both internally and externally, from a variety of backgrounds and experiences. Problem solvers may come from traditional COEs or may have experience as HRBPs. In some cases, problem solvers may have never worked in HR and may be sourced to bring in the necessary skill sets and perspectives the pool lacks. Externally sourced problem solvers may include those with or without HR backgrounds, contractors and agile Scrum Masters.
We suggest creating the role of head of HR problem solvers as a liaison between the head of HR and the problem-solver pool. The head of HR problem solvers’ responsibilities include overseeing the team, managing project assignments, allocating staff to projects, and developing and hiring staff. We also suggest a small population of problem-solver team leads or managers responsible for leading projects. Depending on the size of your organization, some staff could double as leads on some projects and staff for others.
To add an HR problem-solver pool in your HR function:
Define the objective(s) and scope of projects of the problem-solver pool.
Define the role and competencies of the HR problem solver.
Identify the types of roles and subject matter expertise to be added to the problem-solver pool.
Ensure the problem-solver pool is aligned with functional and business priorities, reprioritizing and iterating improvements as needed.
Create a more agile HR operating model with flexible centers of excellence
Organizations often see COEs as a mechanism to achieve cost-efficiencies, but their real purpose is to develop and scale the capabilities most critical to the organization’s growth.
Common HR COEs include:
Talent acquisition
Learning and development
Talent analytics
COEs are essential for HR to leverage expertise, set standards, and create concepts, policies and processes. However, as the business landscape evolves, traditional COEs are no longer fit for purpose.
Next-generation COEs need to become more agile, dynamic and adaptable to provide deep expertise in important subject areas for HR. They achieve this goal by redistributing and specializing tasks across other roles in the HR operating model of the future.
Next-generation COEs rely less on full-time, static teams and rely more on external, contracted work. This strategy allows them to flex as talent needs change. The head of each COE is responsible for ensuring this specialist expertise exists.
Effective COE team members exhibit their subject matter expertise as well as their agility in responding to shifts in the business environment and adapting when necessary. They understand design thinking and apply an iterative framework to find customer-centric solutions. And they demonstrate an openness to working in ambiguous or changing processes, projects or tasks.
A key change for next-generation COEs is their role in providing skilled expertise for problem-solver support. Problem solvers may pull in COEs as needed to help solve critical challenges and provide deeper knowledge and understanding of critical processes.
To upgrade your COEs and make them more agile, follow these best practices:
Redefine the COE value proposition, prioritize strategic initiatives and redistribute routine operational activities to the HR operations and service delivery team.
Redefine the role of the head of each COE.
Reevaluate your current COE teams to ensure they have the right balance of specialist expertise and skills to be agile.
Apply agile practices to COE initiatives and drive cross-functional HR partnerships.
Support the business with a strategic operations and service delivery team
In the HR operating model of the future, functional excellence is a collaborative effort. HR can no longer be the “owner and operator” for all the things it is asked to deliver on. Instead, HR needs to serve as a “convenor” and “catalyzer” on many issues within the organization.
This shift in HR’s role makes prioritization harder, yet more important than ever. Progressive CHROs help define what HR should focus on. Enhancing operations and service delivery alone is not enough in convene-and-catalyze work. It requires formal mechanisms to involve non-HR stakeholders and empowered HR staff.
Progressive CHROs can chart the course by taking the following steps:
Create an HR COO role for strategic oversight. With HR focused on breaking down silos, the HR COO is responsible for tying together different roles to maximize functional efficacy. Responsibilities for the HR COO include optimizing technology and talent data, automating HR activities and maintaining the relationships among HR roles or teams to collaborate effectively and agilely.
Maintain shared services but aim to automate. Shared services centers (SSCs) are most effective at standardizing processes and optimizing HR costs. But a major challenge for HR shared services is designing products better suited for the end user. Our research shows that HR leaders expecting to rely more on shared services for effective service delivery plan to shift responsibility to SSCs in the areas of analytics, employee data and document administration, and employee support.
Add people relations managers to provide necessary functional support. To address employees’ and managers’ most urgent needs, add a centralized team of people relations managers to the HR operations and service delivery team. People relations managers are responsible for much of the operational work previously completed by HRBPs (see Tab 1).
Evolve analytical capabilities with human-computer interaction (HCI). Analytics functions continue to gain momentum in HR. With HCI as an analytical cornerstone, the HR operations and service delivery team becomes a more integrated, more mature evolution of the current HR shared services model.
Build a people-first HR technology team. Setting up a people-first HR technology function can improve key people and business metrics around DEI, well-being, collaboration and innovation. Responsibilities for this team include agile project management, HR technology roadmapping, self-service initiatives, business analysis, application administration and change management.
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How does an effective HR operating model benefit businesses?
HR functions are expected to adapt to the changing work environment while still providing effective service to their organization and employees. An effective HR operating model goes beyond improving individual roles and integrates activities that create business value from end to end.
In today’s volatile business conditions, the HR operating model requires greater levels of clarity, automation, flexibility and collaboration than in the past to ensure HR roles collectively drive strategic impact and operational excellence. An effective HR operating model is agile, strategically aligned to the business, customer-centric about employee needs, and allows for new ways of working that can better serve organizations now and in the years to come.
What challenges might arise during HR operating model implementation?
HR transformations are ongoing: 89% of HR functions have restructured in the past two years, are currently restructuring or plan to restructure in the next two years. However, many transformation efforts fail; key barriers include their increasing complexity, increasing pressure to transform quickly and rising business expectations. On top of this, no ideal blueprint for HR transformation exists, so each individual organization must figure out what elements of the HR operating model of the future will work best for its specific context. To overcome these barriers, thoughtful and adaptive planning and execution are necessary.
What role does technology play in an HR operating model?
Technology has become a critical enabler of key talent outcomes. With radical flexibility and hybrid work environments becoming the norm, HR technology enables HR to provide a more seamless service experience for employees.
HR leaders responsible for HR technology can help their organizations generate talent outcomes by:
Diagnosing how the hybrid experience is changing the way the organization’s critical talent segments interact with its platforms and solutions
Emphasizing the voice of the employee and continuing to investigate the growing sophistication of sentiment analysis
Balancing workplace and personal influences to determine how a solution impacts employees
These steps will help ensure HR technology supports new ways of being an employee in a hybrid world, now and in the future, rather than focusing on employees’ current tasks, for which they are already receiving adequate support.