HR Service Redesign: Here’s How!

I have worked with HR functions for nearly 25 years. How times flies! I can still remember, as if it were yesterday, my first job in the HR profession as an intern at MTV Europe’s HR department. I had just graduated from university with an international business studies degree with a focus on languages and human resource management, earning a meagre salary, but as a young person, MTV was a very exciting place to work. I was hired by, and reported to, an HR manager who helped me to develop my ‘HR’ skills and actively supported my suggestions and ideas to improve the quality of the company’s HR initiatives such as the graduate internship programme of which I was a part of and administered. The seeds of my career a few months later as an HR consultant were nurtured in MTV’s creative environment and by a supportive line manager whom I still keep in touch with.

The HR department at MTV was a small team of 7 providing mostly an administration service and a developing strategic HR service to an organization with around 500 employees in the UK. The team consisted of a head of HR, two HR managers, HR co-ordinator, payroll manager, payroll administrator and the HR intern position. The HR profession at the time was mostly known as personnel and I remember thinking how novel it was to use the term, human resources, which was then becoming the new profile for the profession. Over 20 years later, the HR profession has changed its profile to people and more recently, people and culture. However, the use of the term human resources in organizations is still widespread.

The changes to the profile reflects the constant state of flux within the HR profession. The need to adapt to the challenges, expectations and the ever-changing business environment is well understood by the profession. HR’s purpose and contribution to business success is constantly questioned by scholars, thought leaders, business leaders, and even HR practitioners.

So what exactly does HR bring to an organization? I see the role of HR in terms of value and by that I mean the activities in an HR department should directly contribute to business success. The HR profession has a wide-ranging role and expertise in several specialist areas – employee experience, employee relations, equality diversity & inclusion, learning & development, organisation development & design, people analytics, resourcing, reward, talent management, and wellbeing – all of which are value adding activities but running an HR department often involves high volume administration and transactional activity. HR departments face an ongoing challenge to organize itself to maximize value adding activities and reduce administration and transactional activity. The ever changing profile of the HR profession shows that ongoing challenge and the need to be seen as an enabler for business success.

The personnel profession sought to support organizational competitive advantage through ‘strategic HR’ or human resource management. Strategic HR aims to align HR practices to business strategy and in doing so, changed the HR practitioner’s thinking and work from delivering day-to-day administration to thinking strategically, applying professional HR expertise to the people agenda, and deliver medium to long-term value for organizations. The HR profession continues to stretch its desired contribution even further by driving long-term, sustained value through strategic business insight and people expertise. It is at this level of operation that org.manager’s software is particularly useful by augmenting an HR department’s capability to analyze HR data for strategic business insight and decision making.

More recently, HR’s role is focusing more on ‘value’ such as the capabilities that the organisation requires to achieve success. These capabilities include skills, leadership, creativity and innovation, agility, collaboration & teamwork, customer focus, managing risk, diversity, and culture. These capabilities are seen as ‘mission critical’ and represent what an organization is known for and good at doing and the outcomes of HR activity that enable business strategy to happen. Therefore, the HR function should be organized to ensure that these capabilities can be defined and delivered.

In redesigning the HR function, an important starting point is to consider HR as a business within a business or as a business in itself. Always think commercially whether you are running an HR function in a private or public organization! The HR operating model should be structured in a way that reflects the structure of the organization. In other words, the HR department should mimic the structure of its business operation.

The Ulrich model has always been a good starting point for redesigning an HR function but there are other models. McKinsey provides a useful summary of different HR models in their 2022 article, HR’s New Operating Model, which suggests that Ulrich’s model remains relevant however there are alternative HR operating models emerging from shifts in the internal and external context of organizations today.

HR service redesign is a process of redesigning an HR department to align with the needs of the business more closely or better. The outcome of the process is an HR operating model that maximises value adding HR activity. An HR operating model is the way the function organizes itself to deliver value to customers and stakeholders specifically its organizational structure, roles, capabilities, processes, and enablers such as technology and the governance arrangements.

As mentioned earlier HR departments redesign their organization for a multitude of reasons. The drivers for redesign include emerging technologies, skill shortages, changing workforce demographics, globalization, political instability, organizational growth, organizational decline, cost pressures, innovation, risk and compliance, mergers and acquisitions, stagnation, new leadership, new organizational mission and strategic objectives etc. In this context, HR must evolve and adapt to its environment. This requires a deep understanding of the internal and external drivers for change, business needs and strategy, and then continuously innovate the HR department to be more efficient and effective.

The service redesign process is like a chain of events that lead to the design of an HR operating model. Each of the events in the chain are critical to the design of an efficient and effective HR operating model. org.manager’s org design software is particularly useful when HR needs to understand their current operating model and has established the redesign principles.

The best starting point for an HR service redesign is to understand the current HR operating model in terms of its organizational structure, activities, roles, capabilities, processes, technology and ways of working. You’ll also need to establish some redesign principles for your new HR operating model e.g. type of structure, no of positions, total budget, headcount, spans of control, skills required. The redesign principles will inform your choice of HR operating model. org.manager’s org design software can help you to evaluate and visualize data for your chosen redesign principles which usually include:

I’ve reviewed several HR departments as part of efforts to realign the function to better meet the needs of the organization. The review itself can be a time-consuming exercise involving lots of data collection and analysis. Once configured according to your needs, org.manager’s org design software gives decision makers the ability to evaluate and visualize data about the HR department.

The most useful feature of org.manager is the functionality to compare different structures or operating models. The functionality enables decision makers to compare their current HR operating model with different HR operating models, to mimic the structure of the business operating model in different ways, and to explore various options to align HR resources to each part of the business.

org.manager’s simulation tool enables you try out different HR operating models at the same time and evaluate their impact. This is so helpful because in HR service redesign, decision makers are often considering different types of HR operating models and looking to achieve certain objectives e.g. reduce cost by reducing non value adding activity. org.manager’s simulation tool enables HR to examine its operating costs in detail and simulate different models to reduce varying levels of cost.

With Ingentis org.manager, you can visualize HR departmental data, analyze your HR structure and processes, and optimize your organization. This tool enables automatic visualization of HR departmental data from virtually any data source. The current state of your HR function can then be analyzed, desired target states can be designed and the entire structure can be optimized. Whether it is to gain an understanding of the current HR operating model, reorganization, or a service redesign.

When discussing service redesign, we are referring to using data-driven evaluation methods to optimize the design of the department. With Ingentis org.manager, you can analyze the HR department in detail and identify areas of improvement and necessary changes. This allows you to create HR operating models and processes that improve effectiveness and efficiency in the department, thus add value to the organization’s objectives. Ingentis org.manager offers various ways to visualize the current HR operating model, from classical organization charts to the representation of agile structures.

The software gives you an array of possibilities to gain a better understanding of your current HR operating model, activities and processes. With customizable visualization rules you can focus on what is essential to you, identifying optimization potential and taking the right measures in no time.

Ingentis org.manager not only highlights critical design principles, but also provides the ability to simulate structural changes based on the current state. This allows you to illustrate and evaluate potential future HR operating models before implementation.