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HR transformation: Maintaining the balance


Maintain the balanceTim Palmer and Bettina Pickering discuss transforming strategic HR alongside transactional HR.

HR transformation projects involve the adoption of new service delivery models which reduce cost through the establishment of in-house shared services centres (SSCs), the streamlining of HR transactional processes or outsourcing part of or all of their transactional HR activity.

As organisations make these changes, they need to also look at the strategic roles that HR business partners and HR centres of expertise will play, understanding how they will maximise the return on their investment in these roles.

Based on our work helping multiple organisations achieve value through transforming their strategic HR functions, we offer three pieces of advice for those managing such changes:

  1. Maintain balance: ensure that the strategic HR organisation receives as much focus as the transactional organisation

  2. Re-focus and up-skill: business partners and centres of expertise need to be helped to play their new roles effectively

  3. Keep it fresh: take regular health checks to ensure that the intent and vision for the HR organisation remains clear

Maintain balance

Key questions to ask

  • How will our transformed HR transactions impact the role of the more strategic HR teams?

  • How should we size these teams?

  • What is the desired skills profile for HR business partners and HR centres of expertise?

  • How does the team we have now measure up against this profile?

  • What would be our optimum staffing mix for this team?
  • When an organisation transforms its transactional HR activities, it affects all parts of the people processes, both within HR and the wider business. The sheer energy required to make shared services and/or outsourcing happen can cause HR transformation projects to become single dimensional, with insufficient focus being given to strategic HR transformation.

    It is important to maintain appropriate balance. All impacted staff need to be consulted, not just those with obvious role changes. For example, the impact on the community of HR business partners can be overlooked. It is too easy to assume business as usual, rather than ask hard questions that may lead to uncomfortable but necessary conclusions.

    This may seem obvious, but the number of times where this balance is allowed to be upset, despite initial intentions, is considerable. The HR organisation is often only as strong as its weakest part, and all parts of HR need to be adequately addressed during a transformation project.

    Re-focus and up-skill

    As a new strategic HR organisation is put in place, HR business partners and centre of expertise team members need to be re-equipped to play their new roles. The start of this is to ensure that they have the correct orientation; that they are looking in the right places for their inspiration and understand how they should interact with the business and other support functions.

    People in an HR centre of expertise tend to have an external orientation. They look outwards to the market for best practices, and understand the environment the business operates in. They ground ideas gained from outside in the context of the business strategy and use the outcome to provide strategic and specialist services to the rest of HR and the business. They are technical experts in their fields and are usually long-serving HR professionals.

    HR business partners, on the other hand, have a solution orientation. They understand the challenges that the business is facing and apply an HR perspective to help move forward.

    The scope of the business partner role is complex and challenging. It has progressed beyond the scope of HR management, traditionally taught through professional HR qualifications. It requires role holders to have:

    • Interpersonal skills – handling conflict and ego with tact and measure

    • Integrity and courage – challenging decisions and calling out organisational inadequacies and injustices

    • Organisation development skills – reviewing and shaping the way that the business works

    • Analysis skills – tracking and spotting trends and patterns related to people issues

    • Commercial skills – supporting fact-based decisions and modelling their impact on salaries, headcounts and performance

    HR business partners are essentially consultants to their business area. They need to adopt consulting techniques, including the ability to push back and say no to inappropriate work, so that they do not become glorified HR administrators.

    Both of these strategic HR roles need to be supported through their development by an HR training curriculum covering skills which may be new or may need to be refreshed. On demand and regular coaching can also bring in outside knowledge and help business partners move from problem analysis and recognition to solution provision.

    Keep it fresh

    HR transformation projects can be seen as the means to arriving at some nirvana end state. Everyone takes a big breath and works hard to get there. The problem with such a focus on the start-up, is that once the excitement dies down and the consultants and senior management go elsewhere, the real work commences.

    The value of the transformation is of course realised by people in the line organisation continually working to improve things. And in truth there is no end. The vision and goals that inspired the transformation need to be kept alive, with the function constantly reviewing and reinventing itself.

    We advocate that organisations build regular check points into their plans to help identify new opportunities and spot any slipping into old working methods. We recommend taking an external perspective, either the consultant that helped manage the transformation in the first place, or maybe a peer, to monitor and audit the function on a regular basis, providing a health check to the team and making ‘tough love’ recommendations.

    Even if these three pieces of advice have not been addressed adequately during the transformation process, it is never too late to correct the balance, adequately re-skill HR staff and revisit the intent and vision for the strategic HR teams.

    Tim Palmer and Bettina Pickering are from PA Consulting Group

    One Response

    1. Measurement is key to HR Transformation
      I enjoyed the article on HR Transformation.
      I would add that it is also important to identify and put in place measures that will be used to identify the business impacts of the transformation. These should include not only the common measures of cost savings and headcount reductions, but productivity, customer satisfaction, and quality.

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