New Trend In HR Organization Structure
let's start today to discuss New Trend In HR Organization Structure , HR departments increasingly are split into transactional work and transformational work. Transactional duties are standardized, routine and administrative, and are handled through service centers, e-HR and outsourcing. Transformational work, which is differentiated and strategic, is centered in embedded HR and HR centers of expertise.
Service centers emerged in the late 1990s as HR leaders realized that many administrative tasks are more efficiently done in a centralized, standardized way.
Employees are increasingly willing to find answers to routine, standard questions through a service center, and technology enables these centers to access employees as well or better than other ways. Service centers enjoy economies of scale, enabling employee needs and concerns to be resolved by fewer dedicated HR resources.
In addition, service centers require a standardization of HR processes, thus reducing redundancy and duplication. Service centers offer new ways to do traditional HR work like employee assistance programs, relocation administration, benefits claims processing, pension plan enrollment and administration, applicant tracking, payroll and learning administration.
Human Resource Information System (HRIS) or Electronic Human Resource Management (E-HRM) has gained use as technology enables employees to manage much of their own HR administrative work.
They can access information on HR policy and usage, such as vacation days allotted and taken, retirement provisions, job or career opportunities and qualifications needed, and their own skill levels (via self-assessment surveys). They can also take care of many routine transactions whenever they wish, because automated systems don’t keep office hours.
About 60 percent of employee HR questions or transactions can be answered online by employees themselves.
Outsourcing draws on the premise that knowledge is an asset that need not be owned to be accessed. HR expertise can be shared across boundaries by means of alliances, where two or more firms get together to create a common service, or by outright purchase from vendors who specialize in offering it. Vendors take advantage of
economies of both knowledge and scale. Economy of knowledge allows them to keep up with the latest research on HR issues and with the latest technology, so as to offer transaction support that accesses the most recent ideas and is delivered in the most efficient way.
Economies of scale make it possible to invest in facilities and technologies beyond what is realistic for a single company.
HR professionals who perform corporate HR roles address six important areas of need within the emerging HR organization:
- They create a consistent culture face and identity to serve external stakeholders like customers, investors and communities.
- They shape the programs that implement the CEO’s agenda such as innovation, globalization or customization.
- They ensure that all HR work done within the corporation is aligned to business goals.
- They arbitrate disputes between centers of expertise and embedded HR.
- They take primary responsibility for nurturing corporate-level employees.
- They ensure HR professional development.
In complex organizations, some HR professionals work in organization units defined by geography, product line or function. These HR professionals, whom we call “embedded HR,” go by many titles: relationship manager, HR business partner, HR generalist.
Whatever their specific title, they work directly with line managers and with the leadership team of an organizational unit to clarify strategy, perform organization audits, manage both the talent and the organization, deliver supportive HR strategies and lead their HR function.
- They engage in business strategy discussion, represent employee interests and explore the implications of change.
- They define requirements to reach business goals and identify where problems may exist.
- They select and implement the HR practices that are most appropriate to the delivery of the business strategy.
- Finally, they measure and track performance to see whether the HR investments made by the business deliver the intended value.
Centers of expertise (CoE)
Centers of expertise or centers of excellent (CoE) operate as specialized consulting firms inside the organization. Depending on the size of the enterprise, they may be corporate-wide or regionally based—Europe, for example, or by country.
They often act like businesses with multiple clients —the business units—using their services. In some
cases, a fee for use or a “chargeback” formula plus an overhead charge for basic services may fund them.
The financing of centers of expertise is sometimes set to recover costs, and in other cases is pegged at market prices. Typically, businesses are directed to go to the center by their embedded HR units before contracting for
independent work from external vendors.
If, in working with the center experts, the decision is made to go to outside vendors, the new knowledge provided by these vendors is then added to the menu for use throughout the enterprise. CoE HR professionals play a number of important roles:
- They create service menus aligned with the capabilities driving business strategy.
- They diagnose needs and recommend services most appropriate to the situation.
- They collaborate with embedded HR professionals in selecting and implementing the right services.
- They create new menu offerings if the current offerings are insufficient.
- They manage the menu.
- They shepherd the learning community within the organization.
A large number of HR departments have attempted to operationalize the above model with shared services (service centers and centers of expertise) and embedded HR. But many of these departments are finding that some work continues to fall through the cracks.
While embedded HR professionals are asked and expected to be strategic and conduct organization diagnosis, they often find themselves overwhelmed by operational HR work that conflicts with their main purpose.
Service centers typically do not perform these operational tasks because they require personal attention; centers of expertise do not do them because they usually require deep and unique knowledge of the business and strong internal business relationships.
A second driver is the velocity of program change emanating from corporate HR or centers of expertise. Particularly in times of corporate change and transformation, embedded HR professionals are expected to keep up with a wide number of corporate initiatives—from new measures and measurement to required corporate training and
communication programs to new modifications to the performance management and development system.
It is also the case that often these embedded HR professionals come from an implementation background and lack the skill or self-confidence (or both) to comfortably function at a more strategic level.
Too often HR professionals in centers of expertise offer insight and menus of choice, but they do not facilitate or
partner in the operational implementation of these ideas. Service centers deal with administrative challenges, but they, too, do not deal with implementation of new administrative systems and practices at the business level.
Some companies create a fifth leg called the HR consulting pool. The consulting pool operates as a team of high-performing midlevel HR professionals and is managed as a cohesive unit. The unit reports to the head of regional (e.g., embedded) HR.
Team members are deployed to assist joint center and embedded HR teams to implement solutions to important HR projects—for example, to develop and implement a strategy to reduce workforce turnover rate.
Operational HR roles require a particular set of competencies. These roles are best for people who are execution and implementation oriented rather than focused on strategic relationships (embedded HR) or new knowledge creation (centers of expertise).
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