5 minute read 3 Mar 2020
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Eight forces driving HR transformation right now

5 minute read 3 Mar 2020
Related topics Workforce Corporate culture
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The real opportunity to create long-term value lies in a “people-first” approach across the enterprise.

In an age where corporate culture is a Board-level matter, workforce planning and talent development enable or disable workforce agility, inclusive behaviors are non-negotiable and technology transformation is the new normal, there has never been a better time to be an HR leader or professional.

The future of HR is horizontal, working as an integrated enabler, ensuring that all key decisions are made with people and skills considerations top-of-mind across the business, rather than operating as a standalone vertical. As better technology and automation (better) handles routine tasks and provides richer people data, and “digital workers” (bots and other forms of intelligent automation that undertake HR tasks) take greater responsibility for traditional “HR work,” HR professionals can shift their focus to unmet and underserviced people needs in the business.

In EY’s study How do you ensure you are automating intelligently, we find that there is an opportunity to use automation to free up to 29% of time currently spent on lower-level administrative tasks within the HR function. In this context, the “people impact” of the workforce on business outcomes and long-term value creation are undeniable.

The game-changer for businesses today is the digitalization of the HR function, if leaders get it right. The pace of innovation and the stability of tried and tested HR software solutions are driving a radical change in how “HR work” gets done.

By maximizing use of integrated cloud solutions and leveraging all forms of intelligent automation, HR leaders are seizing control of their own destiny and creating capacity to tackle vulnerable people points in their value chains. Great HR leaders are now going directly after top-line impact and bottom-line performance – and all the value contributions in between. A measured approach to organization design sits at the core of unleashing this potential.

An integrated, horizontally-structured organization design is characterized by outcomes that are co-owned by the business, the workforce and its HR function. Crucially, all roads to horizontal impact prompt significant changes in the service delivery model for HR and there are eight practical implications resulting from a digitally-enabled people operating model.

1. Digital enablement

Digital enablement is now doing up to 40% of work formerly undertaken by HR professionals. This is a result of capitalizing on cloud technology investments and embracing intelligent automation across all HR functions.

If you lead a 500-person global HR team, what impact could you have with the equivalent of 200 people professionals who now have the capacity to focus on higher-value people contributions in the business?

2. Automation

Automation enables delivery of HR work across every part of the employee lifecycle. Everything from HR planning and strategy to labor relations and talent acquisition should be reimagined to take advantage of cloud, advanced analytics, machine learning, robotic process automation, artificial intelligence and chatbot capabilities.

3. Self-service from any screen

Direct digital access from any screen replaces client-facing HR and reinvents self-service. Consumer-grade user experiences on smart devices at work unlock the full potential of self-service.

Today, managers and employees can do more while riding the elevator or when operating outside of the traditional office environment than ever before.

4. People Solutions and Services (PSS) taking on specialist work

There is an intentional effort to accomplish moderately complex and operational specialist work from the PSS center of excellence in compensation, benefits, core HR, talent acquisition, talent management and nearly every other specialty area of HR.

From annual merit process administration to driving completion of quarterly performance check-ins, many “steady-state” operational tasks are now being undertaken by PSS.

5. PSS taking on generalist work from HR Business Partners

In many organizations today, there exist HR generalists with business partner titles that continue to just get HR work done locally for the business. Tomorrow, this work will be intentionally serviced from PSS to give those same business partners the bandwidth and capability to serve as people strategists.

From annual merit process administration to driving completion of quarterly performance check-ins, many steady-state operational tasks are now being done from PSS.

6. People Consultants taking on other work historically handled by HR Business Partners

In any given week, an HR business partner may spend 20% to 60% of their time supporting employee relations issues within their business unit – often at the expense of strategic priorities. Tomorrow, redefined “People Consultants” operate as true product and service owners who not only design but stabilize the adoption of services, then turn steady-state operational responsibilities over to PSS.

7. People Consultants acting as product owners to fortify existing and introduce new services

The innovation hub of HR takes the form of agile consulting teams and product owners who problem-solve with the business and set the strategic direction for a portfolio of people services that include Workforce Planning, People Analytics, Organization Design and Development, Culture, Leadership, Employee Experience and Total Rewards.

8. People strategists, creating strategy

People strategists don’t simply claim to be strategic – they are. The next generation is enabled by new data technology and analytics in ways like never before.

Often sourced from the business, People Strategists are equipped to serve as “people athletes” who innately understand how value is created and destroyed across organizational value chains. They guide and advise the People Consultants who work side by side with other functions to enhance outcomes: top line, bottom line and every operational wicket in between.

Transforming for a reimagined future

By making a series of intentional adjustments in your people operating model, leveraging the best available opportunities available through intelligent automation as an integral part of this process, you are reimagining how HR work gets done, crystallizing the accountability for work completion and creating capacity to reinvest in a horizontal people services structure.

This is a future in which your people professionals are liberated to deliver value in new ways: for example, scrum teams work “customer back,” roles and reporting lines are replaced by a talent cloud where skills are the new currency and shared outcomes such as culture and engagement replace traditional KPIs.

At the same time, 80% of what HR does today is reimagined to deliver exceptional experiences across the employee lifecycle, personalize at scale while driving service delivery efficiency, and make it easy for managers and employees to get the people services they need from any screen at any time.

The starting point of value

For decades, HR function performance was assessed against peer functions in other organizations. Today, HR effectiveness is increasingly measured by its value to the business and the employee. HR can accelerate this change by fueling the co-ownership of people outcomes that matter most across traditional boundaries: functional, business and worker types.

Being attuned to the business and the employee has long been a critical success factor – the difference today is that technology has increased the volume and quality of available data, and advanced analytics capabilities are sharpening the focus further still. Capitalizing on these opportunities in the right ways is what will ultimately prove most transformative.

For example, many HR scorecards today are limited to those key performance indicators that HR has the greatest direct control over, instead of those metrics which are most valuable to the business.

A classic example of this dichotomy can be seen in the talent acquisition space: How would HR need to operate differently if average time to fill a vacancy was replaced by the average time it takes to get a new hire to full proficiency in their role?

This shift would require HR to work end-to-end across talent acquisition, on-boarding and development all while fueling culture, leadership and high-performance team-building in the business. This is not an outcome and experience owned by HR, but co-owned.

And what if HR and the business unit were accountable for the return on people capital investments - currently around 70% of an organization’s costs? How would you structure HR and key people programs differently?

These are just some of the questions that, in a digital age, a business-led people operating model can answer.


How EY can help

HR Transformation

From employee health and safety to exceptional people experiences, the boundaries of HR are shifting in real-time. HR teams must migrate from the services that have defined HR historically to the new people services that will define the function for years to come.

Read more

Instead of, at best, “staying in your lanes” or, at worst, working at crossed purposes, imagine if these disciplines locked arms around on the strategic priorities of each business unit.

Actions for HR Leaders

When addressed independently, adopting automation or elevating the strategic focus of an HR Business Partner will continue to make little impact on long-term value creation. The key lies in tackling both pieces of the puzzle together.

This raises three important ways in which the HR organization needs to work differently:

  1. HR must build a mindset and be organized to break down siloes and more proactively collaborate with other functions to unlock business value and the workforce experience.

    The functional areas of the business (including Human Resources, Finance, Information Technology, Supply Chain, Legal and Marketing) contain deep problem solving and specialty expertise. Instead of, at best, “staying in your lanes” or, at worst, working at crossed purposes, imagine if these disciplines locked arms around the strategic priorities of each business unit. These communities of practice would be working with the business to galvanize the points of vulnerability in the value chains of the business that fuel near, -medium -and long-term business outcomes. 
  2. HR must consistently demonstrate the impact of people investments on the business value chains and the workforce experience.

    Both require HR to stray into the uncomfortable space of co-ownership of outcomes that matter most. This is unfamiliar territory for many HR functions – and it will demand much more reliance on analytics and data visualization tools to credibly connect people investments to business outcomes.
  3. HR must create both the capacity and the capability to serve the business and workers (regular and contingent) in new ways.

    As such, they are challenging and reimagining all aspects of their HR operating model. From intelligent automation to new HR services, there has never been a better time to be an HR executive as the digital HR model of today both liberates your specialists and challenges them to operate in completely new ways.

Summary

With the stakes high for getting technology and talent right, and with the opportunity to transform the employee experience greater than ever, HR leaders who effectively integrate human and tech will enable differentiated cultures and create both short and long-term value.

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Related topics Workforce Corporate culture
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