If you’ve just taken on a role as CHRO, or your organisation is going through a transformation or budget change that gives you a chance to reset, designing your HR organisation and leadership team can seem a daunting undertaking. Service models and organisation structures for a modern HR function rarely follow a template. Of course, certain elements are key, particularly some of the ‘Centres of Expertise’ (COEs) such as reward, payroll and operations or, depending on your scale, talent and recruitment. But even acknowledging that some functions are must-haves, you still have a number of choices that don’t need to be constrained to so-called ‘best practice’ models.
1: Cut your coat according to your resources
It’s important to start out by knowing exactly what your CEO’s expectations are, and what your CFO will allow for in terms of affordability. From that, work out what you can deliver in terms of overall level of support to the whole organisation, and at what level your HR advisors or business partners provide direct support, for example only to direct CEO reports or perhaps also to their directs. Can you resource a central capacity for day-to-day line manager support and perhaps take advantage of automation, which is rapidly coming down in cost? Think about what service might fit that model, and what activities can be outsourced or delivered through a managed service provider. Get the broadest stakeholder support you can both as you set out your vision for the function, and as your design develops.
2: What is the wider picture for your organisation?
The answer to point 1 (affordability and expectations) may have a lot to do with this, but it’s important to tie what your HR function can deliver to what your business needs now and over the next few years. Are you at a strategic inflexion point, with a need to accelerate change? Or is your business in consolidation mode allowing you to refine what you do and take ‘good’ to ‘great’? With business change cycles accelerating you will most likely need agility in what your function delivers and how it supports the business’ programme of change. Most importantly, be imaginative and not constrained by simply playing a supporting part to business strategy.
3: What role do you want your HR advisors or business partners to play?
The role of the classic business partner has evolved, and expectations are increasing. Depending on scale, you might think of this as one or two senior heads of HR, or a team of business-aligned HR professionals. Do your existing teams have both the buy in and the capability to play a strategic role? In medium to larger organisations, the business partner will be the CHRO’s representative and avatar, so if you want to position your function as a true strategic partner, they will need to be capable of playing the part.
4: Square off talent and organisational constraints
If you’re taking over an established team, you may want a mix of stability and refresh in your leadership team. The purist’s approach is to design the right roles and recruit to fit them. In reality you will probably find yourself with a number of existing team members who are talented or high potential and that you want to find a role for, and sometimes great external talent is available that you want to design a role around. The key is to be prepared to make compromises in everything except your vision and the design principles that you have decided upon.
How can 3XO help?
At 3XO our emphasis is on ensuring that the support we give to our clients is backed up by our deep practical experience as senior HR professionals, and sets your business up for enduring success. We draw on the breadth of our experience across specialist HR functions as well as the leadership and stakeholder management disciplines necessary to build and maintain a world-class HR function. At every step we work with you and your team to ensure that what we propose truly works for your organisation and is built to last.
Matt has over 25 years’ experience as a senior human resources leader. He has held HR and Reward leadership roles within financial services organisations, most recently as Group People and Property Director at Lloyds Banking Group.
As a member of executive management teams, Matt has worked closely with boards to drive value for businesses leadership, talent management, succession planning, culture, conduct and total rewards. His strengths lie in the design and execution of people strategies that deliver for the business and drive enduring cultural transformation.