Getting HR future-ready – what HR operating models must consider
Mar 05, 2021
Change is inevitable in the world of business, but how does that affect HR? Long the department that was essentially administrative in its work, its role is changing rapidly, and the pressure is on HR to prove its relevance in the future of work.
And how can HR leaders do that? According to the ‘Future of HR 2020’ survey from KMPG, 60 percent of executives believed that without a modern approach to plan future needs of the workforce, the HR function would surely lose relevance, fast! Consider the following:
- Admin work takes up 86 percent of the time of HR professionals
- Vertical silos do not help HR work as much as a horizontal approach does
What is compelling this change?
The key contributor is the dynamism of the global business environment. It moves fast, uses a lot of technology, requires costs to be trimmed almost unimaginably, and must cater to employee expectations. Serving an organization working in this environment needs HR to line up its talent management strategy with business goals, to treat the needs of employees at par with those of customers, and to operate in a much more agile manner.
How is this creating opportunity for HR?
The disruptions directly affect the futures of:
- How work is done: Humans and machines working together throw up possibilities that can scarcely be imagined. More value will be created, but so will more types of roles, with automation and digitization throwing up several options.
- The workforce: Careers have lengthened to 50 years, while skill half-lives are down to just 2-5.5 years. The open talent economy could include as many as 40 percent of workers very soon.
- The enterprise: With nine times the data over just two years and top companies not lasting beyond 15 years, HR leaders could develop the workforce to help the enterprise drive agility and innovation.
HR can play a new and critical role in determining how an enterprise competes, sources talent, and builds its community presence. Changed business models and new products or services are options to successfully complete, but so is a strong underlying HR function that takes care of the most important enterprise resource: its people.
Are current HR operating models sufficient?
Traditionally, HR focuses on shared services, partnering with the business to deliver recruitment as well as learning and development (L&D). The aim is to facilitate operational efficiency through employee solutions built on the one-size-fits-all model.
The problem with this is the little scope and alignment with corporate strategic goals. HR professionals are being tasked with delivering more strategic value, while employees look to be treated with as much importance as customers.
Clearly, it is time to transform the HR function wholly. The future of the organization must be centered on its talent management strategy – solving people problems fast helps to grasp new opportunities faster, with an inspiring workplace that adds value to the business. Insights and solutions will bring results for the new future of work, not be mere services that tick boxes. And research suggests there is clear scope to improve the usage of predictive talent analytics.
What are the key imperatives for future HR operating models?
For optimizing the entire HR function and taking its role to the next level, a high-impact HR operating model is necessary. It plays an invaluable role in helping a business to grow and adapt to changes in customers, markets, technology, the workforce, and society.
The high-impact HR operating model must be driven by the following:
- Strengthen HR operations and service delivery: This provides core operational support by bringing in strong talent analytics, an HR technology team, people relations managers, and other relevant roles.
- Bring in strategic HR leaders in place of HR business partners: With full ownership of talent strategies for a particular function or unit, they tackle its most critical talent challenges and opportunities.
- Create next-gen centers of excellence (CoEs): These could work with a core problem-solver team for developing practices and policies throughout HR. Relying more on contract workers, CoEs could flex as per talent needs.
- Set up a team of problem solvers: Tasked with defining problems and hypothesizing, testing, and building solutions, problem solvers handle temporary assignments. They work closely with employees and managers as well as the CoE team, from where they get deep HR expertise.
- Leverage human capital intelligence (HCI): This provides solid data on talent for better decision-making. Predictive models could suggest how benefits affect satisfaction or the number of people who will leave the firm.
Is it too late to make this transformation?
Not at all. Agility means the company can identify where it is in its transformation journey, and create a strategic vision of where it wishes to be. The path itself can differ – some clients might require stronger tech focus, while others may build out new capability areas and people services. What remains common is that people functions are set for a massive change.
To sum it up…
The pandemic sped up what was already in process – better workforce flexibility and employee services, and adoption at a quicker pace than anticipated. The future HR will be driven by automation and other HR technology, bringing seamless services and experiences to its employees and delivering value for long-term sustenance of the organization. Traditional HR is past, and it is time to ring in transformational HR!