Before Changing Your HR Organizational Structure, Look at Your HR Talent
Executives—from CHROs and heads of Talent Acquisition to CEOs—have asked me lately for a perspective on HR organizational structures. For some, summer brings mid-year reflection that ranges from plans to restructure to adapt to emerging needs, or pondering how to do more with less.
Changing HR organizational structures is a popular action many HR leaders take: research from the Institute for Corporate Productivity (i4cp) found that 75% of professionals surveyed reported that their organizations were revamping their HR organization structures post-pandemic.
This trend has continued well into 2024 and is expected to persist given business uncertainty. Regardless of the driver, teams are striving for productive and efficient organization structures to benefit both HR teams and the business overall.
However, i4cp’s research shows that such outcomes are often murky, or even nonexistent. In fact, our analysis found no significant relationship between HR organizational structure and market performance.
Focus first on HR capabilities and talent, not HR structure
I've worked with exceptional leaders across various industries to address the challenges of and opportunities in renovating HR functions and organization structures. Changes may include:
- Centralizing certain functions
- Creating cost efficiencies and/or global standardizations
- Distributing transactional processes to a shared services model to augment effectiveness
- Evolving the HR business partner (HRBP) to empower line leaders to better manage
Some HR leaders I talk with seem to expect me to share a one-size-fits-all approach to HR structures. But designing and implementing a model that matches the maturity of the organization is key. It's about aligning HR structures with business strategies and objectives to support both current and future needs. As businesses evolve and pivot, an adaptable HR organization is essential for maintaining a competitive edge and fostering sustainable growth.
What makes an HR team really adaptable? Through both i4cp’s research and my own observations, it’s clear that having the right talent and capabilities on the team is what changes business trajectories and creates lasting impact—not how those people are organized.
Market performance driven by people
During my time leading global talent acquisition for Fortune 500 technology organizations, leaders often used the word fungibility to describe their team's ability to move around or interchange resources. During talent reviews, this word was spewed more often than “exceeds expectations.”
I recommend a more human capital-central term: workforce flexibility.
If you find and empower leaders within your organization, they will be able to adapt to different roles and responsibilities, solve endless problems, drive business results as their versatility will flex to any challenge presented.
As mentioned in our guidebook, Renovating HR Structures & Systems, "…to succeed at this level, HR leaders need operating models that support the business strategy." But to excel at future levels, it's not just about operating models, but getting your people right. It comes as no surprise that three of the five domains of i4cp’s strategy model, The People-Productivity ChainTM are people related: culture, leadership, and talent.
My advice to leaders looking to build a sustainable HR organization? Start with a deep understanding of the business and where it is headed. Then find the best talent you can with the capabilities needed so you can pivot quickly.
History has shown me that organizations typically "transform" or re-org every couple of years, so if you start with great people resources, they will be able to flex and grow with you.
If you want to discuss your HR organizational structure or makeup of your HR team, let’s discuss opportunities for your next phase of growth. I've also referenced a few i4cp specific tools above. If you don't have access, let's connect—I'd be happy to share them with you.