Poised to Evolve: Two Imperatives for HR

Employee expectations are evolving as people adjust to remote ways of working and apply technology to work and collaborate more accurately, efficiently, and effectively. At the same time, organizations are pressured to adapt and innovate to deliver competitive products and services in a market climate that the COVID-19 global pandemic has transformed overnight. In this landscape, people are a defining asset and strategic enabler. Now more than ever, market leaders are turning to HR to reimagine workforce models that nurture innovation, speed, and continuous improvement while reducing costs, risks, and improving enterprise adaptability.

As HR is called to deliver meaningful workforce and organizational transformation, HR leaders must shift how they deliver value to the business and customers, and how they operate as a function overall. There are two key imperatives that HR must confront to accomplish its strategic aims:

  1. Instilling greater flexibility in operations
  2. Delivering more experiential and people-centered products and services for the business

Imperative one: Becoming more flexible

In part due to the financial and operational headwinds precipitated by the global pandemic, there is a growing pressure on HR to operate with more speed, lower cost, and higher quality. HR can accomplish these objectives by injecting adaptability into how it operates as a function, becoming more pre-emptive and flexible.

To embed greater adaptability, HR leaders should consider several critical areas that include:

  • Operating model: Most HR functions today follow a variation of the Ulrich Model, also known as a Service Delivery Model, which is not typically designed to respond to the fast pace of business and changing employee expectations. HR needs to design its operating model with adaptability in mind, leveraging ideas and learnings from other functions (e.g., IT and marketing) centered around the end user. HR of the future should seek to achieve greater flexibility and business alignment by deploying a network of dynamic, project-based teams to engage the HR customer and deliver integrative solutions.
  • Strategy and goals: Strategic objectives in a typical HR organization cascade downward and goals are only visible to individuals and those above them in the reporting line. In an HR function that embraces agility, goal setting is collective, team-based, and bottom-up. Goals should be transparent and visible to everyone. Work initiatives are prioritized based on the needs of HR’s internal customers and deployed with the support of interdisciplinary teams.
  • Planning and funding: HR typically budgets and plans its work on an annual or bi-annual basis, a cadence which has proven to be a bottleneck to agility. A more iterative (e.g., quarterly) approach, in lockstep with finance and strategy, enables greater flexibility and ensures that HR is aligned to drive the strategic agenda forward.
  • Ways of working: High-performing, modernized HR teams have the space and flexibility to innovate. They use iterative design to develop and implement new initiatives at pace, engaging the voice of the customer to ensure HR is driving tangible value for the organization.

Imperative two: Moving towards experiential and people-centered HR

Over the past decade, many HR teams have made the transition away from an administrative function and towards a role of proactive and strategic business enablement—a transformation made possible through automation and the ability to outsource transactional tasks.

While this transition has helped HR move up the value chain, transformation efforts have not always had the optimal impact. In some cases, enterprise HR transformations have yielded homogenized, streamlined services and a one-size-fits-all approach to critical HR processes that fail to meet the needs of the people who use them day-to-day. We believe it’s time for another change!

To build the connection with its customers, HR must keep pace with evolving employee expectations through more people-centered and experiential HR products and services. This will enable HR to be better equipped to create the conditions that cultivate employee capability, improve collaboration, and drive productivity, ultimately helping the business to attract and retain key talent.

HR leaders can move towards more people-centered and experiential products and services through two key actions:

1. Introduce a product mindset and product management process, using both service design and design thinking to ideate around specific customer-centered HR objectives. Processes and ways of working should be iterative, applying best-in-class agile frameworks such as Scrum and Kanban.

HR Product Management Process:

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HR leaders can ask a few key questions to inform the process of iteration:

  • Are our projects and initiatives driven by feedback from our customers (e.g., employees, leaders, and customers)?
  • Are we collaborating with customers on solutions to their issues?
  • Are our efforts focused on the right areas?
  • Are we moving from ideation, through design, to delivery at pace?
  • Are we iterating and improving the way we work?

2. Change the design of key people products and services to support a more agile enterprise. The most practical approach is a step-by-step change that incorporates learnings along the way. In our experience, HR leaders often start by optimizing the performance management process, including total rewards. This process serves as a guidepost for employee development and can make or break enterprise agile transformation.

As HR takes on heightened accountability for helping to transform the business and its workforce, more flexible, experiential, and people-centric operations can help the function rise to the challenge. To address these imperatives, HR leaders must look beyond processes alone and be equally committed to building the right culture and instilling the right behaviors. Moving towards more agile and people-centric practices is, at its core, a mindset and behavioral shift.

In our next blog, we will continue to explore how HR can embed transformative agility through a process for co-designing key people products and services and delivering a more flexible, strategic HR function.

In the meantime, read North Highland’s three-part series on creating an agile organization, discover agile’s five hidden amplifiers for scaling across the enterprise, explore insights on measuring success in an agile environment, and uncover how to go about scaling agile by creating a learning organization.