Role of technology in embedding new operating models
Our conversations with people professionals highlighted the key role of digital technologies in improving operational efficiency and employee experience in the new operating model. Tesco and NatWest Group defined what digital technologies were needed early on to support and embed their new operating model. Both organisations recognised the opportunity and need to focus on improving digital enablement early on to ensure interactions with HR were efficient and simple.
Eleanor Priestley, Digital Transformation Lead at NatWest Group, highlighted the co-dependency between their HR operating model and digital technologies: “The HR operating model leans on our technology architecture and core HR platforms.”
Priestley’s core aim was to leverage their HR technology to best support the needs of their internal customers: “What’s the overall best technology ecosystem to support our colleagues? How do we bring together the best combination of [HR] platforms to support our processes? Some of our platforms did multiple things, which created quite a complex landscape that our colleagues had to operate within”.
To enable the people function to deliver their core responsibilities to the business, end-to-end processes were developed. Priestley explained: “The second phase of this work has really been about building an operating model that simplifies our overly complex processes. We needed to do that up-front work, thinking in an agile way, looking end-to-end.”
Our research showed organisations that pursued ‘hyperautomation’ tended to be ones where technology is a competitive differentiator for their organisation (hyperautomation or intelligent automation is the automation of business processes using artificial intelligence (AI) and related technologies). One people leader described it as ‘doing less but better’. That is, to prioritise improving a few activities which will drive business success.
In pursuit of hyperautomation, some tasks done by people professionals might be increasingly facilitated by technology. For example, First-line HR queries or first-stage interviews might be done by a GenAI chatbot. Better analytics can be used to support fairer performance reviews or proactively identify employees who are at risk of burnout, as described in our digital transformation series.
As digital technologies evolve, people professionals need to redefine their roles to remain relevant. People leaders should consider the following:
- How do roles need to be re-designed?
- What future skills will be required for each role?
- What is the impact on headcount, roles, responsibilities and teams?
People teams also need to understand the role of technology on the wider workforce and how it can improve organisational outcomes. The CIPD’s guide on preparing your organisations for AI highlights three broad areas that people functions need to consider: how AI shapes HR or people strategy, how it creates a new paradigm for HR teams and how it impacts upon the employee lifecycle.
Building skills and capability to support new operating models
Another key element for embedding new operating models is developing necessary skills and capability, especially where there are new roles or responsibilities within the HR structure. However, this doesn’t always happen in practice.
Research suggests that only 40% of businesses provide training to HR professionals to support the transformation to a new operating model. Our latest People Profession Survey found business partnering skills and supporting line managers were key areas for skills improvement within the profession. This highlights the critical nature of close collaboration and alignment between the function and wider business.
The people leaders we spoke to acknowledged a general lack of awareness on how to use HR systems, the available tools and functionality. Closing this skills gap is crucial in operating models that are increasingly self-service and leader led. Anna Wisniowski, Business Partnering Director at Tesco, talked about the importance of investing in these skills to drive effective usage of HR systems: “We did some work upfront around digital skills with colleagues to build their confidence and their [digital] capability. We know our workforce is multi-generational and not everybody may be comfortable with technology.”
A robust skills assessment can help identify skills development areas within the new structure, for example:
- Firstsource built competency frameworks for each new role within their operating model. This helped to define the required skills and behaviours for each role and were largely based on the CIPD Profession Map. This enabled Firstsource to create specific skills programmes to fill the technical and commercial skills gaps within the function.
- Tesco identified five core skills areas that were deemed to be critical for everyone in the people function. To identify individual strengths and personal development areas, the people team was encouraged to complete a diagnostic exercise.
- NatWest Group used a targeted approach to develop several core skills within the people function.
By filling skills gaps of individuals, you build a stronger people team who can in turn develop the capabilities of people in the wider business to deliver greater value. To quote a global research report by the RBL Group and Ross School of Business: “Individuals can be champions; but teams win championships”.
If you’re planning on building HR capability in a particular area (eg performance management, workforce planning, talent management), measuring current HR capability against a maturity model can help benchmark and identify development areas in your function.
Creating a culture that aligns to new ways of operating
Research examining change at a collective level demonstrates that shared positive perceptions around change processes can build change readiness at a group level (Rafferty and Jimmieson, 2010). This underscores the importance of the culture around change and its impact on people’s attitudes.
“HR is moving away from focusing on HR processes to focusing on managing and stewarding culture. What culture is best to drive this organisation forward? Is it an innovative, agile or high-performance culture?” said Chibuzo Ejiogu, Associate Professor in HRM at Cranfield University.
To support the new HR operating model, people teams told us they invested in building a culture more open to change, for example:
- Aligning expectations to reflect changes within the new ways of working, eg moving from a high-contact HR offering to a self-service model. To support this shift, Tesco focused on building their people’s capability in using the new HR systems and line manager skills to support key people processes.
- Developing a culture that is open to change and adopting a change readiness mindset.
- Encouraging a culture that fails fast and learns fast, taking accountability and being open to experimentation.
- Realigning expectations of new roles both within the people team and across the business (eg clarifying handoffs and responsibilities, see Peabody).
- Building an agile growth mindset and culture that enables teams to deliver change at pace (see NatWest Group).
Our research aligns with Rafferty, Jimmieson and Armenakis (2012) in showing that good quality change communication can increase employee commitment and openness to change. Part of the battle of changing the culture was around developing the right communication, at the right time. HR leaders needed to be tactical with how they pitched the transformation to the business and gain buy-in from the right influencers in the organisation.
Jo Carlin, Senior Vice President, HR Europe at Firstsource explained: “Even if you think it's discussed enough, keep going. You’ve got to be the best travelling salesperson that business has ever seen”.
Obtaining employee input was instrumental in addressing barriers to change. Tesco held workshops to gain insight around deploying its new operating model across different markets and also developed a market toolkit to build more understanding of the nuances, differences and similarities of the different markets in the group. Meanwhile Peabody’s people team prioritised re-contracting with the business to communicate new roles and embed their localised people plans.
Align your HR operating model, technology, skills and culture
Ultimately, reimagining your HR operating model alone won’t necessarily change the impact and value of the people function. You also need to enable technology, build skills and capability, and create a culture that’s conducive to change and agility to cement the structural changes and support your organisation’s success.
Martin McCracken, Research Director and Professor of Work and Employment from Ulster University Business School, emphasised the importance of HR leadership being commercially savvy. He said, “I think the big issue is HR leadership. I really think HR leaders need to know exactly what other leaders in the organisation want from HR.” Having this understanding will help people leaders to develop people strategies and solutions that provide real value and impact that the profession can absolutely deliver.
Our next and final article of the series explores the critical role of the HR business partner. We’ll be covering some of the common challenges that people professionals face within the role and how people teams are navigating these issues to ensure effective partnering with the wider business.
Acknowledgements and key contributors: Jo Carlin, Chibuzo Ejiogu, Martin McCracken, Hayfa Mohdzaini, Eleanor Priestley, Anna Wisniowski.
Case study organisations: Firstsource, Homebase, Peabody, Tesco and NatWest Group.
