hr transformation roadmap- aligning with the business commercial agenda

1 | JULY 2014 HR TRANSFORMATION: ALIGNING WITH THE COMMERCIAL AGENDA

2014JULY

HR Transformation: Aligning with the Commercial Agenda


IntroductionWhile Human Resources processes pervade the enterprise, reaching into every aspect of operations, HR has nevertheless traditionally tended to be viewed as an administrative function, in isolation. As companies started to recognize the potential influence of the Human Resources function in meeting corporate targets, however, the focus shifted to Shared Services models, thereby optimizing operations, driving standardization, and leveraging technology. Today, with competition for staff fierce and “talent” emerging as one of the most valuable competitive differentiators (the others are HR process and HR technology), the HR function is stepping into the corporate spotlight, positioning itself as a strategic partner to help the business meet growth and operating targets, and succeed.

Getting from there to here, however, is an arduous journey. The challenge of HR transformation, which more and more companies are embracing, is to align supporting frameworks and processes to business objectives. Many organizations failing to do so find that their HR services are still stuck in a silo, and their impact on the business – though cost effective – remains muted.

To help you manage your own HR Transformation in accordance with best practices, we have compiled the most important levers in this report.

Christina ExarchouHead of HR Practice, EMEAChazey Partners


What is HR Transformation?

In its early incarnations, starting in the mid-nineties, HR Transformation was focused predominantly on the internal workings of the function, driving efficiency and effectiveness. Today, however, Transformation is about enabling and supporting corporate strategy, and adding value. So while early Transformation was about serving employees more effectively through self-service and access to data, today HR is reaching outside its walls, collaborating with the business to anticipate and plan for workforce trends, respond to changes in business requirements, manage risks, and ensure it remains compliant with local legislation.

This “new” HR operates at the heart of the business, driving both the planning and execution of workforce strategy in the face of global competition for talent that is putting critical skills in short supply. In this capacity, HR will prove its value by anticipating and delivering the skills the business needs through harnessing the full potential of a global workforce, as well as supporting processes in as effective and cost-efficient a manner as possible.

HR Transformation: a Compelling Value Proposition

Modern business has no room for stagnant functions. As the enabler of organizational talent, HR has a crucial role to play. By aligning its strategies with business goals, by ensuring that people management systems support business development, and by leveraging strategic leaders, HR can truly provide a step change for enterprise.

To be recognized as an enabler, and to gain senior-level sponsorship, however, HR needs to create a tangible, clear and compelling value proposition for the business to buy into. Transformation to a better tomorrow requires the full support of all stakeholders today.

Transformation Objectives

HR transformation is about positioning the function in the same direction as the business. In other words, the HR model replicates the rest of the business functions, becoming a true business partner in support of achieving strategic business targets.

HR Transformation is about eliminating, wherever possible, non-value adding work; escalating insights and influence to help the business meet its targets; and providing innovative access to a globally dispersed pool of labor.

There are three basic objectives for a successful HR Transformation:

• Transaction Effectiveness: generally achieved through a Shared Services model that deals with all HR administrative matters and that can provide more complex advice and support

• Specialty Services: essentially “Centers of Expertise” that provide in depth technical solutions (for example, employee relations, reward, resourcing, learning and development etc.)

• Strategic Alignment: delivered via HR Business Partners that support senior business leaders with an appropriate “people” strategy

The result of this approach is that HR becomes more customer-focused, cost-efficient and structured, and is able to respond quickly and flexibly to changing business requirements and priorities.

The Transformed Operating Model

What differentiates a “transformed” HR function from a conventional one is that it utilizes multiple approaches to deliver support. So, apart from the actual transactional element (now packaged as Shared Services), it also offers advice and compliance support on local issues, leverages enterprise knowledge to drive efficiencies and innovation, and offers valuable input on strategic decisions. We can summarize the four core elements of a transformed HR services operating model as:

1. Shared Services2. Strategic Center of Expertise3. Local HR Delivery4. Business Partner/Advisor

These, between them, create a matrix of services support that transforms a centralized HR center into a value adding enabler of corporate strategy (see Figure 1).


Figure 1: HR Service Delivery Operating Model

External Customers (Recruits)

Countries

OCU

Execu3ves

Line Managers

Staff

Business

Partner

Self-‐Service

Human Resources Advisory Centre

Expert Services Policy

Technical Infrastructure & Applica3ons

Data Management & Reporting

HR Systems and Support

Health & Wellbeing

Performance Management

Reward Management

Compensation & Benefits

Change Management

Resourcing

Employment Relations

Workforce Planning

Strategic Centre

•  Health & Wellbeing •  Resourcing & Workforce Planning

•  Performance & Comp Mgmt •  Employment Relations

Shared Service Centre

Opera3onal HR Support

•  Performance Management •  Absence Management

•  Case Management •  Disciplinary

•  Fairness at Work •  Line Manager guidance

HR Advisor

HR Leadership •  Leadership Capability • Workforce Performance

•  Employee Engagement • Workforce Adaptability

•  Strategy Alignment •  Talent Management

•  Staff Efficiency

Here are some observations on the core elements that drive a transformed HR operating model:

1. Shared Services

The operational hub of a transformed HR services model is the Shared Service Organization, responsible for delivering the policies and programs developed in the Strategic Center and designed around service level “Tiers”:

0: Self-Service (on-line answers and transactions)1: HR Advisory Center (24x7 service)2: Expert Teams (specific queries, more complex or

time-consuming transactions, based on service centers)

3: Strategic Center

2. Strategic Center of Expertise

A pool of HR professionals with deep functional specialty who work with the Customer (e.g. Business Partner, HR Advisor, etc.) to design and develop HR solutions to support business requirements, using intelligence from the SSC and Business. The Center also proactively identifies trends and interfaces with Training, Leadership,

and Organization Development.

Roles/Responsibilities

• Design and implement fit-for-purpose HR programs, processes and policies

• Provide expert solutions to the business, collaborate to provide insight on specific situations

• Maintain deep expertise in areas of functional specialty

• Handle and close escalations forwarded by case workers in the Shared Services Center

• Drive common standardized processes• Provide communication materials to HR Business

Partners, HR Advisors, and Shared Services Center for use within business groups

• Custodians of corporate memory/knowledge management

• Monitor Service Center exceptions processing and employee feedback to drive continuous improvement

Assumptions

• Close linkage with governance body to ensure process integrity and clarity of strategic direction

• Center of Expertise serves all businesses

In a transformed HR service, the following core People Management processes need to work effectively:• Talent Acquisition • Performance Management• Learning and Development• Compensation Management


3. Local HR Delivery

Deployed from Shared Services, this group is based in the business and manages 1-on-1 interactions where sensitive or complex cases require this level of support. It guarantees localized HR delivery through the Service Center, manages organization-wide policies and procedures at a local level, and provides support and coaching to local line managers.

Roles / Responsibilities

• Executes global policies and programs • Ensures policy compliance with applicable

legislation• Supports culture change and change management

initiatives• Supports leadership in managing frontline

employee relations• Includes discipline and grievance resolution• Provides coaching to local leadership on

performance management and capability building• Provides feedback to Center of Expertise and

Business Partner on effectiveness of initiatives • Active communication with the Service Center and

Local HR Support to ensure business needs are met

Assumptions

• Generalist resource with excellent relationship building and management skills

• Deployed based on employee population and business needs

• Accesses Shared Services and Center of Expertise resources as required

• Reports to and deployed by HR Business Partners

4. Business Partner / Advisor Ensures alignment between Business Strategy and HR, and is responsible for understanding and defining HR requirements from a business perspective, as well as managing local delivery. It also ensures that the Shared Services Organization meets local SLAs, and develops solutions to meet business requirements in conjunction with the Strategic Center.


• Trusted advisor to the Business • Ensures consistent implementation of HR

programs within the Business and adherence to guidelines

• Drives culture change and change management

initiatives with the support of project managers• Partners with the Center of Expertise to create

innovative and fit-for-purpose HR solutions • Organization design & development, compensation

& benefits, training & education• Manages the talent pipeline in conjunction with

Business Leadership• Identifies organizational capabilities required to

execute business strategy• Analyses, drives and monitors organization

performance• Provides feedback to the Service Center, reviewing

quality and cost of service provided

Assumptions

• Reports to Business, not HR function• Trusted advisor, charged with coaching &

mentoring of business leaders, facilitating ‘future state’ performance

• Strong interface exists between Business Partner and Center of Expertise

What Drives Transformed HR?

By taking a holistic approach to delivering HR services across the business, and incorporating levers like Leadership, Technology, and Process Support, activities are delivered on time and at the level required for optimum performance. The combination of technology, process, and strong leadership ensure HR maintains its strategic value across the enterprise.

Here is how the new operating model can be supported by deploying these levers:

HR Leadership: Articulates strategic intent for HR and is aligned to the overall company strategy.


• Trusted Advisors to the Executive Board • Sets the HR Agenda and Priorities • Ensures appropriate HR support to strategic

initiatives• Defines levels of decision making authority and

guidelines for escalation • Establishes key communication framework• Owns strategic direction of core global HR

processes; accountable for the integrity of processes including delivery of high-level service agreements

Self-Service (Technology): Employees and Line Managers perform selected HR tasks online, via a common HR employee portal.


MSS - Manager Self Services

• Online handling of team’s organizational management changes (transfers, promotions, department rotations, etc….)

• Online access to performance management • Online access to absence management tools• Online access to C&B tools• Online access to Learning & Development• Online posting of all open positions• Online approvals for all relevant processes • Access to HR reports

Employee Self Services

• Online access to personal data• Requests and authorization of vacation days• Performance management process reports• Access to e-learning• Access to job postings and application submission

Other Web-enabled information

• Portal – Intranet to host internal strategy, HR policies, employment information, benefits, direct system access,

• Internet – external company site reaching the public, applicants access tool, sharing news on Corporate Social Responsibility

Process Support:

• Process standardization & performance management

• One common technology platform (ERP)• CRM (Customer Relationship Management) in

place • Service level Agreements communicated and

signed off by all customers (countries & SHS organization)

• CPIs, measurable and transparent customer performance indicators to measure performance and efficiencies

• Customer Feedback surveys

A few warnings before you start…

• Ensure that HR processes are compliant across all jurisdictions and are fit for purpose.

• Recognize that HR has a number of different customers with different requirements.

• Drive a seamless service within HR to satisfy all levels of service requirements in the business.

• Communicate so that the business is aware of and informed about the support options under the new HR model.

• Up-skill Line Managers (for People Management) so they are more proactive and accountable.

• Ensure that HR Business Partners are trained and skilled in delivering strategic (not operational) support to their client.

• Understand that there may be a need for large-scale capital investment to get the right technological infrastructure.

Next steps

Take a moment to assess your readiness for HR Transformation:

Yes No

Do you have standard processes run at a global level?

Do you have one common ERP plat-form?

Is your HR structure reflecting the business function structure?

Are your HR customer satisfaction rates at the ‘positive’ side? (positive as defined by your internal ratio)

Are your Key Performance Indica-tors (KPIs) results meeting your set targets?

If you are interested in evaluating your operations and finding out how you can drive changes through HR, please feel free to contact one of ourPractitioners here: [email protected]

To truly transform HR requires a holistic approach that encompasses resources, productivity improvement, and better service provided at better cost. Such a transformation is built on three core foundations:

• Service Centers• Technology• Standard Process Design

These three features are, in turn, enabled through communications, change management and training.


All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any

form or by any means, electronic, mechanical, by photocopy, recording or otherwise, without the prior permission of Chazey Partners.

For more articles from Chazey PartnersPlease visit www.ChazeyPartners.com/Resources or subscribe to our newsletters

www.ChazeyPartners.com/Subscribe

Moving from “Finance as a Function” to “Finance as a Service”

Understanding the Role of Finance, and Providing an Integrated Service Offering, Supported by Cross-Functional Partnerships

Finance needs more than a few “tweaks” to provide the kind of support modern day companies require to grow profitably. To get to the crux of the matter – better decision-making – a full-scale Transformation is often required. Sounds intimidating? It need not be. We explain what this means and lay out the options for you in this report.

Click here to Read more

More Power Through End-to-End Process Ownership

While many organizations are already benefiting from Global Process Ownership, we are still seeing plenty suffer expensive mistakes, which could be avoided. Read this report to find out how to drive more benefits across the end-to-end process.

Click here to Read more


Chazey PartnersChazey Partners is a practitioners-led global management advisory business. We bring together a unique wealth of experience, empowering our clients to strive for world-class excellence through Business Transformation, Shared Services & Outsourcing, Technology Enablement, Process Enhancement and Corporate Strategy Optimization. We pride ourselves in having built, operated and turned around some of the world’s most highly commended and ground breaking Shared Services Organizations, and for implementing many highly successful multi-sourced (shared services and outsourced) delivery solutions. Over the last 20 years, we have delivered numerous programs globally, in the US, Canada, UK, Continental Europe, Ireland, India, Eastern Europe, South America, Singapore, Australia, China, Middle-East and Africa. Our experience covers both Private and Public Sectors, providing expertise in a wide spectrum of business functions, including Finance, HR, IT and Procurement.

Learn more about us at www.ChazeyPartners.com.

Phil Searle CEO & Founder

Chazey Partners

[email protected]

David O’Sullivan Co-Founder & Partner

Chazey Partners

[email protected]

Esteban Carril Managing Director, Latin America

Chazey Partners

[email protected]

Chas Moore Managing Director, North America (West)

Chazey Partners

[email protected]

Anirvan Sen Managing Director, Asia, Middle East and Africa

Chazey Partners

[email protected]

Janey Jux Head of Public Sector Practice EMEA

Chazey Partners

[email protected]

Christina Exarchou Head of HR Practice EMEA

Chazey Partners

[email protected]

Emer O’Kelly Regional Director Europe

Chazey Partners

[email protected]

Robert Towle Managing Director, North America (East)

Chazey Partners

[email protected]