Transforming HR from Support Function to a Strategic Business Enabler Unit

HR Operating Model Transformation Approach

Business Objective

ABC Company aims to grow at a rate of X% per year for the next five years.

Problem Statement

The HR operating model appears to be weak to support the target growth figure.

Background – Traditional HR Operating Model and Functions

The traditional HR operating model primarily works around the mandate of service delivery

efficiency and cost reduction.

The key functions can be classified under the following heads:

Business Partnering – responsible for working closely with business leaders/Managers to

support business from HR perspective.

Administrative/Shared Services – responsible for day to day HR services

Policy and Planning – responsible for formulating HR programs and policies

TO-BE State HR Operating Model – Key Challenges

To help ABC Company achieve its Business Objective, an HR function needs to surmount the

following key Challenges:

Drive the Talent Agenda and attract the best in the market

Drive cross cultural alignment and global performance and engagements

Support to build a leadership pipeline

Leverage technology to be effective on every touch point

TO-BE State HR Operating Model - Critical Principles/Key Characteristics

Understanding of Business Imperatives: HR needs to understand local and global business

priorities, and keep themselves updated with info about external customers and the market

in which they operate

Evolving HR Competencies: Understanding of HR’s readiness for new roles. Tailored

programs to develop competencies like Adaptability, agility and analytical acumen

Leverage Technology: HR needs to use analytics and technology to get closer to business

and understand business imperatives. They should leverage technology to provide enhanced

self service capabilities to the business

Innovation: HR should act as the change agent, innovating along with the business leaders,

and redesigning the function to serve the Business purpose and not just getting optimized to

serve

Recommended Framework to achieve TO-BE State HR Operating Model

STEP 1: UNDERSTAND AS-IS STATE

Understanding of how the HR functions today, and the present operating model to create a clear starting point for change

The following activities would help ABC company understand the present state of HR function, and identify gaps to initiate change.

Understand the present HR organization structure What is the present HR framework? What are the various roles and responsibilities defined in the framework? What is the hierarchy and reporting structure?

Understand the functions of different groups within the HR Organization and how they work together and with different lines of business within the Organization to support strategic objectives.

Understand the present recruitment process What are the Trigger points to initiate recruitment from outside the

organization? Who initiates the process? Who is responsible for driving and closing the recruitment? How the recruitment cost is taken care internally?

Understand the function of Talent Management in the present HR Organization, and how it is aligned with different lines of business?

What is the current Performance Management process?

What is the current vendor management process?

Understand the work process of the group formulating HR processes and policies.

Outcome of this step is a detailed AS-IS study report that elaborates the functions,

processes and structure of present HR Organization, highlighting the gaps, weaknesses to

mark the initiation of Change.

STEP 2: DEFINE GUIDING PRINCIPLES

Create guiding principles to initiate the development of future state of HR Operating model

With the information of AS-IS state, ABC company must define the principles to guide the Change Management through the entire cycle to successfully transform the HR Organization to meet its business Objectives. The recommended Characteristics/Principles are mentioned in this report above.

Refer “TO-BE State HR Operating Model - Critical Principles/Key Characteristics”

STEP 3: SET VISION FOR TARGET OPERATING MODEL

Create an initial vision of the Target operating model as how HR would function driven by the guiding principles

At this stage ABC Company is well informed of the gaps/weaknesses of the present HR Organization, and has documented the Key Characteristics/principles to help shape the TO-BE state HR structure. With this information, the envisioned target operating model needs to be:

One that understands local and global business imperatives One that act as a change agent flexible and promotes collaboration within and outside the Organization able to Leverage technology and offer Improved Operational and business Services able to nurture the ABC brand and influence people strategy – talent Acquisition,

engagement and motivation

STEP 4: CREATE TO-BE STATE PROCESS GROUPS

Realize the TO-BE State Operating model’s vision by allocating activity in groups

ABC Company has set the vision and is sure of the expectations from the new HR organization. They must use the available and documented information from Step 1 to 3, to bring the vision in shape by defining different processes groups, and create a high level framework of new HR Organization. The recommended process groups to shape the vision of ABC Company are:

Leadership team HR– a part of Executive leadership team to work on Strategy Business HR – group that works closely with business leaders and managers with

emphasis on Talent Management on development Operations HR – group acting as employees’ SPOC for all operation activities Center of Excellence HR – group comprising of experts in HR, they work closely with

Business HR providing HR program and process leadership across operating model, and collaborate with Operations HR in delivery.

STEP 5: CREATE DETAILED TO-BE STATE HR OPERATING MODEL

Elaborate on the process groups to create a detailed operating model

The process groups created in Step 4 needs to be detailed to:

Describe the key responsibilities of each group Define activities and create work processes for each group Create Process flow with suitable checks, identified deliverables and approval

systems. Define Point of Interfaces

o Among the HR groups o Between the HR groups and lines of business within the Organization o Between the HR groups and business entities outside the Organization

Identify dependencies among the HR groups, between HR groups and lines of business to create an ecosystem of collaboration.

STEP 6: CREATE HR ORGANIZATION STRUCTURE

Create HR Organization structure by detailing out roles and responsibilities, and prepare to transform existing processes, roles and capabilities.

The activities to formalize the TO-BE State HR Organization structure are:

Define roles and associated responsibilities for the new HR Organization Obtain the Management buy-out on the proposal. Start restructuring the present HR Organization to Identify individuals for the new

roles Plan the transition of AS-IS HR Organization to the New HR Organization.

Case Summary

With the management’s belief that current HR operating model is not mature to support

the growth target of X% per year, the HR operating model needs to evolve from traditional

practices. And position itself as a high impact HR operating model, which is agile and flexible

and is able to work closely with business on growth objectives. The recommended

framework would help ABC company transform its HR function in to a more strategic

business unit enabling it to align itself with the business and contribute effectively, helping

the organization achieve its current and future business objectives.

Author

Yogender Singh is a Management Consultant, he works closely with Client’s Leadership,

helping them identify growth opportunities or solving business problems.

Contacts

Linkedin: https://in.linkedin.com/in/yogender-singh-73a698ab

Email: yogender_8297@yahoo.co.in