By Ian J. Cook, CHRP

As a good architect knows, the form of the design should derive from the function of the building. The same applies to organizations and the structures that hold them together. As the function of HR is shifting, the research group at BC HRMA engaged with some member volunteers to look at whether the form of HR is keeping up with the demands on the function.

What the research team, led by Ann Leckie of Teldon Media, discovered makes for interesting reading. They found that most HR groups are not satisfied with their form and are in the process of changing and potentially changing again in a quest to get the right things done, in the right way, by the right people. 

The report is full of great insight and there are two pieces to highlight. The first is the challenge that has come back to HR from the process of outsourcing. This practice was intended to remove low value work from HR, centralize it with a third party and therefore reduce the time and cost of HR transactional activities. For the most part the basic process has worked, however it has not been successful in removing the more complex, and employee specific transactions that HR has to handle. In effect, outsourcing has removed the 80 per cent of transactions that took 20 per cent of the time. However it has not been able to satisfactorily handle the 20 per cent of transactions that take 80 per cent of the time. The 20 per cent of transactions involve the complex questions around benefits, performance, compensation, etc, that cannot be answered through an intranet or simple review of company policy. Employees quickly learn to circumvent the third-party provider and bring these issues back into the internal HR group as the trusted source of a resolution. The requirement to handle this type of organizational work has added to the strain on HR functions, which have had their resources scaled back based on 100 per cent of the transactional work being handled elsewhere. The focus on re-structuring is in part driven by a review of the realities of outsourcing’s limits.

The second component is related to HR structure; specifically to what extent is Dave Ulrich’s model of HR being applied and how well this is serving HR groups? Overall the work of HR does fall neatly into the areas identified by Ulrich, however organizing in this way leads to two unintended consequences. The first is a structure that leads HR’s clients to approach the function with a prescribed solution. If the manager believes training is the answer, they go to this area of expertise and request support. HR does not get to decide whether or not the need identified is best served through a training solution. This type of access removes the option for HR to review the issues that are brought to them from a more strategic perspective and offer higher order solutions that add more value.

The other outcome of the structure is that HR is not set up to be present where it will have maximum impact in the organization. Areas such as the emerging practice of Business Intelligence (formerly strategy groups) and the project management office are the components within an organizational structure that frequently drive the most change or are a key catalyst for change. These groups are outside of the traditional HR structure. The HR leaders who participated have identified that being able to place the right people in these groups has the potential to shift HR’s perceived value to the organization and HR’s opportunity to show up strategically. The challenge they face is getting HR practitioners, with the right skills, into these groups when traditional HR roles have not typically included the experiences that are necessary to be effective.

These two nuggets alone make the report worth reading.

Have some opinions or reflections on the information contained here and in the report? Join the ongoing learning conversation in BC HRMA’s online community. Or, watch a multi-part series featuring Ann Leckie:

Throughout his career Ian J. Cook, MA, MBA, CHRP, has pursued his fascination with people and business. During his early career, Ian was both an entrepreneur and an operational manager. These experiences led him into consulting on organizational effectiveness, a path he followed for 10 years while serving some of the world’s leading organizations. Ian has established a reputation as a strategic business builder who is far-sighted and thought-provoking.