The Story of HR Transformation. Where are We Today?

So, this is how it all begins.

Once upon a time, not very long ago, people in the Department of Human Resources (HR) were only burdened with the responsibility of hiring or firing employees. Their talent for being involved in high-level business decisions was never taken into account. All they had up their sleeves were the monotonous tasks of dealing with bonuses, employee complaints, and even strikes.

Sounds more like a Cinderella story, doesn’t it?

But, like everywhere, the change was inevitable here as well. Fast forward to the present day the HR Department does not suffer the same fate. Thanks to the influential ideas from the 1997 bestseller, "Human Resource Champions" authored by David Ulrich, Professor of Business at the Ross School of Business, University of Michigan, HR Departments are now seen as valuable assets too. Let’s see what Ulrich has to say about this.

The Ulrich Model

According to Ulrich, it was suggested that companies should make a major shift to reform their HR departments via a three-part model, also known as the Ulrich Model. These three parts are -

• The Shared Service Centers (SSCs), who are supposed to carry out traditional HR functions.
• Centres of Expertise (COE), whose main objective is to attract the right talent for an organization, while also crafting suitable remuneration packages; and
• HR staff who were more involved with a company’s high-end strategic decisions.

Ask an HR staff how a business works and they would be baffled. However, with organizations following the Ulrich Model, organizations could encourage its HR staff to think more freely and calculatedly, while also grasping and mastering the concept of value. The good news is that many companies are adopting this model in the present time and seeing results.

The Present HR Transformation Scenario

In the present time, HR transformation is no more focused on just making HR services more efficient and effective. Instead, it’s more about enabling business strategies via the adoption of automated and data-driven processes.

Businesses are now eyeing this department as a route for growth, entering new geographic regions, integration, and acquisitions. According to a study by Deloitte, organizations are now moving toward a "top-down" approach where their first step is to identify the measures that can support full-size business goals. Therefore, the next step for businesses is to then HR methods that can deliver these newly defined metrics and measures.

According to a paper published by Mercer and research finding by Oliver Wyman, businesses will see a number of trends by the year 2025 that will affect the HR Department directly. HR transformation has not been an easy road to tread. While there are companies that are in the process of implementing it, there are others who still doubt it.

Nevertheless, whether companies like it or not, HR transformation trends are growing at an alarming frequency and are here to stay. HR transformation is the future of business growth and organizations have to start working towards it for success.

Alight offers comprehensive human resource management and HR consulting solutions to businesses and corporates around the world to let them have effective support in almost every aspect of HR. Know more at https://hrtransformation.alight.com