Ready, Start, Go! The Great HR Model Experiment Begins
The pressure to hire and retain talent was intense even before the pandemic. This induced a rush of new ideas, from hackathons to career pathways that extended from internships to lure suitable hires.
But these were still built around old HR models. Many HR teams, overloaded with administrative chores, frankly did nothing but fill empty chairs based on job descriptions and experience. The assumption is that employees will eventually want to work with the correct remuneration and some perks — you just need to find the correct figure.
The pandemic changed this viewpoint. Employees tasted good and bad about remote working, learned to become mentally flexible, and started to work agilely. They also intimately understood that the value of work-life balance was not bounded by physical locations and became more vocal about sharing their workplace misgivings.
Despite pandemic measures easing, it’s clear employees are not returning to old working models. They want empowerment rather than face rigid compliance and controls. They also want their views to matter or, at the very least, be acknowledged while many yearn for an agile workplace built on human-driven technologies and equipped for continuous learning.
For HR, it means they need a new model. They must put humans at the center of all processes and champion DEI. It’s what one CHRO neatly described as the shift from “R” to “H” in HR.
What needs to change
The Great Resignation (or the Great Employee Reckoning or the Great Attrition) shows our models are works in progress. Despite increasing inflation and a more difficult job market, employers still find it hard to fill jobs.
Part of the problem is that we seem to be hazy about what is needed for a new HR model. Deloitte U.S. cut through the noise to come up with four areas where HR needs to shift today.
- Area 1: Doing digital to being digital. Deloitte explains that new HR models need to acknowledge that advances in AI, robotics and cognitive technologies will reshape work permanently. So, HR leaders need to examine how they can continuously “design jobs, organize work and plan for future growth” that allows their company to thrive in a digital age.
- Area 2: From center-driven to a human-centered solution. The critical point is personalization. Many HR solutions see it as a bolt-on effort, often focused at the interface level. Deloitte argues that personalization should permeate across the entire employee journey and processes. At the same time, it needs to be measurable so HR can determine employee value in an unbiased way.
- Area 3: Refocus on trust and empowerment. Employees viewed the HR department as a compliance and control center for a long time. It’s an image HR needs to shed and instead cultivate better trust and become a source of empowerment. Deloitte also believes that HR needs to develop “a strong ecosystem of trusted partners” to “create new channels for talent and innovation.”
- Area 4: Move from integration to a unified engagement platform. HR efficiency was tied to how well it automated and integrated various processes for many years. This was the focus of many HRM solutions; engagement was a byproduct. Deloitte argues HR needs to use RPA, AI, VR, ML and social collaboration to actively drive employee engagement. Correctly done, it can help the organization to change or reinvent quickly.
New models of change
Admittedly, addressing all four areas is not as simple as switching on a light bulb. Besides, HR is competing for the same talent resources as its peer departments, and they also need leaders and board support to become true change agents.
This is where models come in. These offer ways for the board and HR leaders to architect processes shaping an organization’s talent potential. It is also an area that is evolving quickly.
McKinsey did a study and highlighted five HR operating models that we need to consider.
It calls the first model Ulrich+, expanding on the classic Ulrich four-role model suggested by management guru Dave Ulrich. The four roles are strategic partner, change agent, employee champion, and administrative expert.
Ulrich+ sees HR business partners creating “functional spikes and taking over responsibilities of centers of excellence (CoEs).” CoEs are reduced to teams of experts. Ulrich+ recognizes that many CoEs have become inflexible and, in turn, impact organizational agility — a significant concern for mature and global organizations.
McKinsey calls the second model Agile. Here, the number of business partners is whittled down to a few that advise top management, while CoEs focus on data and analytics, strategic workforce planning, and DEI. This is ideal for organizations that are growing very fast or pivoting.
The third model, EX, highlights where HR needs to do more work. By focusing on “moments that matter” to boost employee experience, the model proposes that HR, IT and operations teams can jointly plan and run onboarding and bridge silos. McKinsey believes this model is ripe for organizations led by top talents, like consulting or services firms.
Leader-led, the fourth model, moves HR responsibilities to line managers who now have access to HR and back office processes. This is already occurring at some level in many IT organizations where the talent wars are ferocious. This model works well when an organization has a lot of white-collar workers.
The last model, machine-powered, suggests using algorithmic models to take over talent management, from recruitment to individual development. The data can pinpoint issues like absenteeism and attrition, while HR has the freedom to be career counselors and strategic advisors to the business. While McKinsey believes having a large pool of digital natives will be helpful to drive such a model, HR departments at all organizations will benefit from becoming partly machine-powered.
Choosing the right path
Understanding the goals and choosing a suitable model may not be straightforward.
First, a global organization may have to work with different models based on external factors, including the operation type and how the workforce laws are designed. A conglomerate may also have different businesses at varying maturity levels and may need to prepare to evolve from one model to another throughout each business’s lifetime. A new startup may choose a hybrid model when it finds no model fits its needs.
Mercer points out another equally important factor: culture. We all understood the importance of culture when we became locked down. What HR leaders are also finding out is that this notion of culture is not fixed either, especially among new generations where engagement can be fluid across any media. And no employee today, who is looking to be authentic and want an empathetic workplace, is going to subscribe to a corporate culture like in the past.
Other factors may also become part of HR in ways that were not conceivable in the past. For example, East European organizations had to address the challenges they faced when the Ukraine war unfolded and saw issues between their Ukrainian and Russian colleagues.
Metaverse will be another factor that we soon may not be able to dismiss as a fad. As tech companies (already great HR experimenters) start fine-tuning their workplaces for different metaverse(s), more traditional companies will begin realizing the benefits. Engineering teams at Oil & Gas, utilities, and construction teams are already experimenting with metaverse-like scenarios and digital twins for their field employees.
Then you have shifting demographics. It’s already clear that employees are willing to work longer, or consider semi-retirement opportunities, as the cost of living explodes. But as inflation becomes a major life disrupter, are companies ready to capture the potential for retired workers returning to the workforce?
There is no correct answer or model that can answer all these needs and questions right now. Before we create the proper best practices, there will be a lot of soul-searching and experimentation.
What comes of out these experimentation efforts will shape how we build organizations, create teams to succeed, and define what work is for the rest of the century. Exciting times!
Winston Thomas is the editor-in-chief of CDOTrends and DigitalWorkforceTrends. He’s a singularity believer, a blockchain enthusiast, and believes we already live in a metaverse. You can reach him at [email protected].
Image credit: iStockphoto/viafilms
