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Human resources transformation
26 May 2009:
HR staff saw themselves as lifetime career specialists with little need for knowledge or experience of what the rest of the business was about.
But with the growing appreciation of the value of a company’s human assets, and a need to ensure that the talent that an organisation requires is not just on board but also properly motivated, the role of HR has more and more come to be seen as strategic. The old-style HR that dealt with strikes, bonuses and gripes was rarely suited to this task.
So companies began to look at ways to revamp their HR departments. They were heavily influenced by the ideas of Dave Ulrich (see article), a professor of business at the Ross School of Business at the University of Michigan and author of a 1997 bestseller, “Human Resource Champions”, the book that more than any other set the HR transformation ball rolling. Ulrich’s idea was that the HR function should be divided into three:
- what are normally called shared service centres (SSCs), groups that deliver the traditional HR services (and do jobs that can often be easily outsourced);
- something described as centres of expertise (COEs), which house the designers of remuneration packages that ensure an organisation can attract the people that it needs;
- business partners, HR people whose job it is to do high falutin’ strategic thinking.
The role of business partners has been subject to a wide range of interpretations. Some companies have chosen to appoint hundreds of them; others have appointed just a few. One large organisation with 60,000 employees has 350; another, with some 50,000 employees, has just two. A 2004 study of 20 large American companies by PricewaterhouseCoopers’s Saratoga Institute found a median ratio of one HR business partner for every 1,000 employees.
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Source: The Economist
