For many CHROs, managing the HR-board relationships is a relatively new experience, and many report feeling unprepared to meet the expectations set by the board and other executive team members. A further 39% also stated they wish they were more prepared to deal with the board in hindsight.

In this article, we explore the HR-board relationship, focusing on the CHRO’s responsibilities and the skills required for success.

Contents
The role of HR within the board of directors
The challenges that the CHRO faces at the board level
Getting HR-board relationships right: 5 steps
Getting started with the right skills

The role of HR within the board of directors

Externally, shifts in the labor market, economic pressures, and political and social influences have expanded the board’s roles and responsibilities in guiding organizations toward the future. 

Increasing governance oversight regarding executive pay and diversity, increasing demands for transparency, more pressure on performance, and more interest from board members related to executive succession, culture, and wellbeing have demanded more from CHROs regarding their interactions with the board. They primarily engage with the Social and Ethics Committee and the Remuneration Committee, often participating as invitees to address specific questions or topics.

Given the increasing importance of HR, the CHRO’s presence as a regular board member has also been rising. According to the Stuart Spencer Board Index, 93% of the 200 surveyed CHROs regularly attend their company board meetings, with 81% actively involved in driving CEO succession. Additionally, a survey of people leaders revealed that 43% reported an increase in their interactions with the board over the last 12 months.

While representation has improved, clarity regarding the CHRO’s role at the Board level still needs to be improved. Many still perceive the CHRO as a manager of people risks, viewing the position chiefly as focused on legislative and compliance matters, ensuring fair and just labor practices. Similarly, some CHROs are uncertain about how to engage with the board and which topics to present for discussion. 

In our view, the CHRO at the board level is the owner of four distinct agendas:

People strategy and risk agenda

The CHRO champions the people strategy at the board level. This involves helping the board understand the desired employer brand, the business’s market positioning regarding talent and skills, and the primary risks that must be managed to ensure a productive and impactful work environment.

These risks may encompass factors such as the shift towards AI-empowered work, navigating the complexities of remote working, and formulating responses to political unrest that impacts employees.

Talent, skills, and sustainability agenda

The CHRO serves as the custodian of the talent and skills agenda at the board level. Their role is to keep the board informed about approaches to talent sustainability and the attraction, development, and retention of critical skills.

Additionally, the CHRO must assure the board that the organization is actively managing skills gaps and has plans for the succession of critical skills and leadership. This responsibility often extends to involvement in CEO succession and the recruitment of future board members.

Beyond talent and skills, there is a growing emphasis on environmental, social, and governance (ESG) matters. CHROs are becoming key in shaping a culture of sustainability and fostering responsible organizational citizenship within the communities they serve.

Culture, engagement, and productivity agenda

The CHRO clarifies for the board the desired organizational culture, employee engagement, and how current workplace practices contribute to sustained productivity and performance over time.

In this role, the CHRO goes beyond merely reporting on employee engagement surveys and net promoter scores. Instead, the focus is on showing the board how specific HR initiatives drive the desired levels of engagement and culture necessary for success today and in the future.

Workforce diversity agenda

The CHRO promotes the workforce diversity agenda, ensuring the board recognizes that the organization is accessible, representative, and inclusive of talent at all levels.

In this capacity, the CHRO helps the board understand the workforce beyond demographic data, enabling informed decisions related to key workforce drivers such as compensation and benefits, ethics, and policy.

Even though CHROs are welcomed into the boardroom, they still face challenges regarding their legitimacy, misunderstandings of the value of HR, and dynamics between the executive team members who already serve on the board.

The challenges that the CHRO faces at the board level

Research by the global executive search and leadership consulting firm Spencer Stuart indicates that more than 27% of board members come from a financial background. They prefer that boards recruit previous CEO, COO, or CFO individuals as board members.

The board’s composition significantly influences its knowledge and understanding of the HR agenda. A board inexperienced in HR matters may not fully grasp the CHRO’s value, leading to exclusion from critical conversations, derailment when contributing to the four agendas mentioned above, or dismissal of the CHRO’s suggestions.

Conversely, when boards welcome the CHRO and appreciate the topics presented, other executive dynamics often come into play. Some CEOs may view the CHRO as a threat to their credibility, particularly in environments with leadership and culture challenges.

Similarly, the CFO might perceive the CHRO’s efforts to secure investment for people initiatives as leveraging board influence for personal gain or see the discussion on people topics as a distraction and waste of valuable board time.

These scenarios, while extreme, occur more frequently than expected, and HR leaders need to manage these challenges to successfully represent HR at the board level.

Getting the HR-board relationship right: 5 steps

How can the CHRO ensure healthy board relationships while effectively representing the four agendas highlighted above?

1. Setting mutual expectations

First, CHROs must establish clear agreements with the board that align with the four agendas. This involves defining the CHRO’s role at the board level and agreeing on the frequency, cadence, and specific topics requiring more oversight.

CHROs should also use this opportunity to set their expectations for the board, including the type of input they seek from board members.

2. Actively investing in board relationships

Second, the CHRO should actively cultivate relationships with board members outside the boardroom, particularly with the chairpersons of committees related to the HR agenda.

While respecting boundaries, the CHRO must ensure open and transparent communication channels to test specific ideas and manage board expectations outside formal meetings.

We discussed building HR-board relationships with Emmanuel Michael, leadership and career success coach, author, and public speaker. See the full conversation below:

3. Simplifying upwards

As mentioned earlier, many board members lack an HR background. Therefore, the CHRO must simplify, translate, and relate HR information to demonstrate its relevance and value to the board.

Many CHROs view the board as merely another reporting forum for updates and progress discussions. While this is sometimes necessary, it is more important to provide context straightforwardly, enabling the board to connect HR priorities with business requirements.

A highly effective approach for this purpose is to incorporate storytelling and share information using a consistent HR board report format. This creates familiarity and helps board members engage more with the HR narrative.

4. Balancing listening with telling

A common mistake many CHROs make is approaching the board solely to inform them about HR activities rather than also seeking feedback and input.

A strong board offers diverse and often underrepresented perspectives, so the CHRO must balance “telling” with “listening” to maximize the limited time spent with the board. This allows for a productive exchange and effectively leverages the board’s insights.

5. Presenting a united front with the C-suite

Lastly, the CHRO must ensure alignment with the rest of the C-suite on critical matters presented to the board.

This doesn’t mean the CHRO should always agree without question; however, if a debate is likely, the CHRO should communicate their perspective to other executive team members before the board meeting. It’s a delicate balance, but the CHRO should strive to align with other business leaders on crucial topics and perspectives whenever possible.

This approach fosters mutual trust and support within the C-suite during board discussions.

Getting started with the right skills

Transitioning into a board-level role can be a daunting task for many CHROs. However, there are specific skills that can help them actively prepare for this next step. AIHR’s T-Shaped HR Competency Model shows the core competencies all HR professionals need:

Based on the model, CHROs must work on the following skills to succeed at the board level:

• Improving business acumen: Extend your knowledge beyond the organizational context to include insights into macro-market dynamics, megatrends, and industry developments. Stay informed about external events, build relationships with industry partners or bodies, and cultivate a diverse network of professionals to gain valuable insights.
• Active listening and storytelling: Develop the ability to actively listen, interpret information, and use data to tell compelling stories that drive business decisions. Storytelling is not just about visualizing information; it involves connecting the board cognitively and emotionally to what is being presented, ensuring balanced decision-making.
• Managing complexity: This level requires navigating the complexities, including balancing multiple and often conflicting priorities and handling the sheer volume of information that needs to be processed. CHROs can develop this skill by adopting specific frameworks for better analysis and organization, leveraging technology to access information in a manageable format, and increasing their ability to view arguments from various perspectives while recognizing their biases.
• People advocacy: CHROs must be able to manage the balance between building cultures of wellbeing that are also productive and drive performance. They need to develop this skill to represent the people’s voice while also responsibly balancing business priorities.

Final words

Building strong HR-board relationships is essential for CHROs to effectively influence key areas such as governance, executive pay, diversity, and succession planning. What’s more, successfully navigating board interactions can establish the legitimacy and credibility necessary to drive the strategic HR agenda.

The post How To Build the HR-Board Relationship for Organizational Success appeared first on AIHR.

Going forward, HRBPs must be ready to navigate not only the current reality but also future demands. What’s more, they need to address the perception that the HRBP role has not delivered sufficient strategic impact. To achieve that, businesses must prioritize the development of HR Business Partner skills.

In this article, we explore the changing skill requirements of the HRBP, propose an HRBP profile based on our T-Shaped HR Competency Model, and show a three-phased approach to developing HRBPs that are ready for the future.

Contents
The changing expectations of the HR Business Partner
The current reality of the HRBP
Defining the skill set of the HR Business Partner of the future
Adopting a phased approach to developing HR Business Partner skills

The changing expectations of the HR Business Partner

The HR Business Partner role aims to bring HR closer to business, elevate its contribution to a strategic level, and ensure alignment between HR priorities and business goals. This positions the HRBP role as the HR representative in business and the business representative within HR. Often described as “wearing multiple hats”, the role is of a multifaceted nature, facing a variety of demands and expectations.

As business and the world of work change, we see three fundamental shifts in the HRBP role:

• The positioning of the HRBP role
• Its scope and focus
• The future impact of the HRBP role. 

Regarding positioning, the HRBP role will need to address an increasingly complex stakeholder landscape. This will include breaking the stereotype that HR only exists as a “partner to business” but instead becomes a strategic advisor to all, including various employment groups, the Board, and community stakeholders.

The HR Business Partner role will also broaden to include a more market-oriented focus. This expansion involves integrating HR activities with business and market demands and adopting a commercial mindset that aligns closely with evolving market trends.

By doing so, HRBPs will be better positioned to anticipate and react to the dynamic needs of the business. This way, the HR strategies can not only support but also drive key business objectives in alignment with the broader market landscape.

The impact of the HRBP will also shift to become more focused on business continuity and sustainability, ensuring that the business can deliver today and in the future. This can translate into building proactive workforce capability, proactive risk management, and fluid talent strategies to gain access to skills.

We discussed how HR can embrace change and succeed in the future with Jan Laurijssen, HR Evangelist from SD Worx. See the full conversation below:

The current reality of the HRBP

The changing expectations will demand more from HRBPs, and organizations must create an environment that enables HRBPs to perform their role successfully. This includes investing in relevant technologies, equipping HR teams appropriately, and ensuring a clear mandate and legitimization of HR within the organization.

Unfortunately, these factors are not in place for many HRBPs. A lot of HRBPs feel they are pulled into transactional work given the lack of infrastructure and resources, and many also cite high levels of burnout. Beyond these challenges, we also need to realistically assess where the HR Business Partners are today in terms of skillset to determine how big the transition will be in the future.

AIHR’s T-Shaped HR Competency Model is based on multiple years of research with more than 20,000 HR professionals and various organizations using it as the standard for their HR teams. For HRBPs specifically, we find the following insights about the current reality of how HRBPs evaluate themselves against the model:

• HRBPs leverage their interpersonal skills and focus on driving execution to create business impact
• HRBPs have less preference and confidence in using data and digital in their day-to-day execution
• Confidence in business acumen is steadily increasing, yet this seems to be developed at senior levels and may not be a focus area at other levels within the organization
• People advocacy remains a reported strength for HRBPs, often also based on the experience and exposure that they have had.

HRBPs highlight their drive to balance business expectations with HR solutions, often stating that they are drawn to the career as they want to help make the business successful.

Delving further into the career of the HR professional, we see that the HRBP role remains one of the leading preparatory roles for future CHROs, even though many HRBPs do not necessarily aspire to move into a future CHRO role.

Defining the skill set of the HR Business Partner of the future

Based on these realities and insights, we used our T-Shaped HR Competency Model to identify and prioritize the behaviors that we believe will be crucial for the HRBP of the future.

These competencies, skills, and behaviors aim to outline the competencies HR Business Partners need to be future-fit and remain relevant: 

Let’s break this down.

Competency 1: Business Acumen

From its inception, the HRBP role demanded business focus and commercial awareness. A strong focus on business acumen formed the bedrock of the HRBP profile and will continue to do so in the future.

Going forward, the HRBP must have greater market understanding and the ability to translate how emerging trends can influence their business. This will naturally lead to more involvement in the strategic processes of organizations. In addition, we firmly believe that scenario planning will become a key area of expertise for HRBPs in the future.

Competency 2: Data Literacy

As organizations become more data-driven, the emergence of evidence-based HR is ushering the field in a similar direction.

The ability of HRBPs to be aware of how and where data can be utilized, how to apply data to business and HR hypotheses, and communicate data in a meaningful and effective way will become crucial. The HRBP of the future is a master data-driven storyteller and is comfortable infusing data across the HR value chain.

Competency 3: Digital Agility

Leveraging technology in the future will be critical to the success of the HRBP. Utilizing technologies to improve individual productivity and knowing how and where to introduce technology into HR practices will allow the HRBP to partner in a more meaningful manner at scale.

As organizations adopt digital collaboration tools and ways of working, the HRBP must also be able to effectively drive the HR agenda using these digital platforms. This goes beyond being an expert in MS Teams or Zoom; it is rather about knowing how to do HR work effectively in a digital world.

Competency 4: People Advocacy

Globally, employees are overwhelmed, and uncertainties related to the future workplace will place increasing pressure on them. HRBPs must master creating organizational cultures that balance wellbeing and productivity, advocating for a healthy workforce to drive organizational performance.

This delicate balance will require HRBPs to advise business leaders on balancing targets with health, all in the name of creating sustainable organizations with workforces that can deliver today and tomorrow. Managing this process will require significant change management, not only in evolving workplace practices but also in the leadership team’s mindset.

Competency 5: Execution Excellence

Execution Excellence refers to how the HRBP shows up in the organization. Specifically for the HRBP of the future, the ability to problem-solve, think systemically about the organization, and a strong drive towards action will be required.

Given the nature of the role, interpersonal skills such as networking, managing conflict, and leading with empathy will remain important. Yet, we see the increasing importance of what the HRBP does and how they do it, highlighting a renewed focus on interpersonal skills.

Specialist competencies

Complementing these core competency domains, we see several specific domains that will increase in importance for the future HRBP.

First, HRBPs will need a thorough understanding of the HR value chain. This will equip them with the foundational knowledge to integrate HR practices and policies into comprehensive business-focused solutions.

The attraction, development, and retention of talent will remain a critical driver of business success. In addition, the future HRBP needs a thorough understanding of talent management, performance management, and compensation and benefits as the foundation of building comprehensive employee experiences.

Given these realities, as a starting point, we need to invest in HRBP reskilling and ensure a continuous and responsible development experience for HRBPs to transition into this expanded role over time.

Adopting a phased approach to developing HR Business Partner skills

Reflecting on these requirements, it is important to be realistic regarding how HRBPs can transition into the future.

As we’ve seen in the past when organizations redefine the role of HRBPs without stipulating a realistic development roadmap for them, the HRBP operating model fails to bring the desired results, and the role itself is seen as nothing more than a title change. 

To address this challenge, we propose a three-phased approach to developing HRBPs, prioritizing the skills highlighted above at different times to increase the fastest route to value.

Phase 1: Entry to the game – By building solid foundations

To ensure the fastest time to value for new HRBPs, there should be a focus on the following skills:

Phase 2: Adding value – By building emerging skills

Once the foundation has been established, the focus should shift towards emerging skills that include the following:

Phase 3: Making impact – By differentiated skillsets

During phase 3, as the HRBP steps towards more senior responsibilities, prioritize the following, considering the potential transition to a future CHRO role.

Final words

As the world of work changes, so too must the scope of the HRBP role. We believe the HRBP role will become increasingly important in a future characterized by AI, increasing skills gaps and talent shortages, and shifting economic powers. As businesses navigate these turbulent waters, they will require HRBPs with the required skill set to guide them.

The post HR Business Partner Skills of the Future: How Organizations Should Develop Their HRBPs appeared first on AIHR.

In this article, we explore the drivers of HR reputation, its influence on our credibility, and the actions required to move forward.

Contents
Why does HR have a bad reputation?
Should we care about the HR reputation?
How to establish credibility to improve HR’s reputation

Why does HR have a bad reputation?

Reputation is the beliefs and opinions others hold based on past behaviors or experiences. For HR, reputation refers to employees’ perception of their satisfaction with HR services, how HR is positioned in the organization, the skills and abilities of HR professionals, and the trust in the HR team.

Four realities currently influence HR’s reputation:

Reality 1: A lot of people have had a lousy HR experience in the past

The unfortunate reality is that many employees have had a less-than-stellar experience with HR at some point in their careers. Whether this has been due to a lack of feedback during a recruitment process, an administrative error when changing employee details leading to lack of payment, or not feeling adequately supported through HR advice.

Some of the criticism is warranted. Similar to functions dealing with clients or customers, HR had to professionalize how it provides services to employees and the underpinning processes and technologies to drive a good experience. However, this is only half of the story.  

HR professionals often get blamed for things that go wrong beyond our control or, even worse, not our responsibility. The fact that HR is seen as a custodian for practices such as performance, talent, and rewards does not imply that HR is the sole decision-maker in executing these practices. Often, the challenge is more related to line managers not being equipped to run people processes effectively, leading to blame being put at the door of HR.

Reality 2: People enter HR from various backgrounds, leading to a lack of baseline skill

HR professionals enter the profession from diverse backgrounds. As much as this is beneficial for the diversity of skills, there is not necessarily a consistent baseline of skills at junior levels of HR teams. This poses a challenge regarding the consistency of HR competence when compared to professions such as accounting, where formal standards and practices guide career development,

Several HR professionals enter from social sciences and education, bringing strengths related to practices such as learning and development. Yet, the basic knowledge of the HR value chain is not there.

Our State of HR report also found that some individuals move into HR later in their careers, bringing a wealth of business knowledge yet lacking basic HR expertise.

“HR has a little bit of an image problem. What really surprised me is how people get into the HR profession. It’s a lot later on average than in other functions such as, say, admin or finance or marketing, or any of the other big corporate functions. People seem to really stumble into HR, so those entries aren’t necessarily as planned as you think”.

Dr Lisa Simon, Chief Economist at Revelio Labs

Reality 3: HR is under-resourced with people and systems

HR is often expected to drive impact while not receiving adequate investment and resources to execute. HR is the function that receives the least investment, with HR headcount not proactively prioritized and lagging behind business growth.

Organizations also often do not invest in HR technologies to support transactional work, leading to many manual processes being executed with too few resources. This can lead to slow responses, high levels of burnout in HR professionals, and dissatisfaction with HR delivery within the wider organization.

“As organizations grow, the problems grow more than proportionally. Now, you have to worry about workforce planning retraining. So, this requires organizational skills at a much larger level. But what we see is that once companies hit a certain threshold, the HR team is not growing at the levels that you would expect, given the challenges that they face.”

Dr Hakki Ozdenoren, Senior Economist @ Revelio Labs

“We need to look at what HR needs to deliver — what are those skills? Sometimes, you need more of a particular skill, depending on where the organization is at. What was interesting for me from the investment conversation is seeing how HR compares to other functions. If you look at marketing and administration, HR is always the smallest little slither of the pie chart.”

Dr Marna van der Merwe, HR Subject Matter Expert at AIHR

Reality 4: The current perception of HR stems from its history as an admin function

When discussing HR reputation, we also need to consider the history of the function and its origins.

Even though HR today has evolved into a very different contributor than 100 years ago as part of the labor movement, many individuals still hold on to the “hiring and firing” perception of HR.  HR is often seen as representative of line management and as the “No” people in the room, acting more as a hindrance than an organizational enabler.

When reviewing these realities, feeling despondent as an HR professional is tempting. HR professionals often grudgingly accept these realities, and they do little to eradicate these misperceptions. Instead, they become numb to the criticism and usually see it as part of the job.

Given this mindset, it begs the question: Should we be concerned about the reputation of HR? Is the nature of the HR role one that will never be seen in a positive light?

Should we care about the HR reputation?

Stakeholders are selfish about their needs and less concerned about HR’s value to the broader organization.

For example, line managers are pushing HR to recruit faster for their roles, which might mean less focus on a critical candidate evaluation. Employees want HR to be responsive to their queries, while this inevitably means that they are not attending to others. Executives want HR to focus on culture, engagement, and talent succession without necessarily playing their part in shaping these practices.

These expectations position HR between a rock and a hard place. Pleasing one stakeholder inevitably leads to disappointing another. In many instances, HR is a thankless profession – never receiving recognition for a job well done but receiving criticism when things don’t go according to plan.

HR professionals must let go of the idea that positive feedback is the only success metric. Many HR teams measure their success through high levels of satisfaction with HR services, the achievement of positive eNPS scores, and positive stakeholder feedback.

However, the real success of HR should be measured differently and in line with the business outcomes and impact, not against the subjective perceptions of various stakeholders.

Strive for credibility not affirmation

We would argue that HR needs to strive for credibility rather than affirmation. Ulrich coined the term “Credible Activist” as one of the essential qualities of successful HR professionals. Let’s break this definition down:

• “Credible” refers to an individual who can be trusted, has influence over critical stakeholders, and earns credibility through their ability to contribute and add value to their stakeholders.  
• “Activist” refers to the ability to proactively advocate for their stakeholders’ requirements while keeping the business’s overall intent in mind.

The balance between credibility and activism is essential, as a lack of activism leads to HR professionals who have a lot of knowledge yet cannot translate it into real value. Inversely, without credibility, activism leads to HRBPs not being taken seriously, even though they might have good ideas.

As you can see, nothing in this definition is about HR being “liked” or that a positive rating from a business leader measures our value. Building credibility is highly dependent on managing the perceptions and reputation of HR within the organization, leading back to our initial challenge – HR has a bad reputation.

We discussed the state of HR, its reputation, and the future outlook with Lisa Simon, Chief Economist at a workforce intelligence company Revelio Labs, Hakki Ozdenoren, Senior Economist at Revelio Labs, and Dr. Marna van der Merwe, AIHR’s HR Subject Matter Expert.

How to establish credibility to improve HR’s reputation

HR needs to take several actions to establish credibility and improve the reputation of their function.

1. Shift stakeholder expectations of value

Stakeholders perceive HR based on their previous experiences with the function, and how HR has historically been positioned within the organization. More than 60% of business leaders still see the role of HR as administrative, with many not being educated to expect something different from HR today.

The top priority for HR must be to clarify stakeholder expectations of the function and align the value HR offers with business outcomes.

2. Legitimize the HR function within the business

For HR to change the perceptions of the past, the function needs to be legitimized. Legitimization means the positioning, power, and authority of HR within the organization. Not including HR in crucial strategic decisions or excluding HR from business activities creates a perception that HR is only there for reactive administrative work.

As a starting point, HR needs to work with the business to clarify the HR mandate and positioning within the organization. This could require education on new HR capabilities that the business might not have been exposed to, as well as demonstrating other case studies of how HR has contributed to similar organizations.

Even though this is difficult, the HR leader needs to have a candid conversation with the CEO about the role of HR, its mandate of operations, and how it should be positioned within the business. This can only happen if there is an existing relationship between these parties — if not, then building a relationship of trust should be the first step towards legitimizing the business.

3. Set clear standards and target experiences of HR solutions and products

Employees act more like consumers and evaluate HR products and services similarly. HR needs to set transparent service standards about the employee experience that are reasonable to expect.

Utilizing data to demonstrate how HR is meeting its commitments is also important. Here, stakeholder feedback and satisfaction metrics can be valuable. However, they must be measured against a benchmark of set criteria, not individual employee opinion.

The business and HR should agree upon acceptable standards. HR should also benchmark their processes and practices against the market.

4. Share HR success stories and visibly show progress

HR professionals are too humble about their contributions and rely on others to ratify their value.

As an output of setting clear expectations, organizations also need to give HR “permission” to share its impact and not be afraid to claim their contribution. In the past, there has been a narrative that HR is in the background, and its contributions are less visible and deemed less important than those of other teams.

Several factors influence HR results, but using data and metrics, both quantitative and qualitative, can enable HR to drive informed conversations on the function’s performance.

5. Build the skills and competencies to equip HR professionals to deliver

While the expectations of HR are changing, the skill set has not necessarily evolved. 

Skills related to data literacy and digital agility are still lacking, and many HR professionals still report higher confidence in interpersonal than business-related skills. Requirements for HR skills are not clearly articulated, often leading to a mismatch between available skills and the organization’s requirements.

At AIHR, we believe that HR professionals need to be T-shaped and build both breadth and depth of skills to be effective in the future world of work.

6. Balance the investment in HR with the desired impact

Similar to any other business function, if HR is expected to drive strategic value, execute at scale, and provide services to a complex workforce, it requires the right structure, skills, and systems investment to make that a reality.  

As a first step, HR can establish the same financial discipline as any other business function by collaborating with finance to gain a deeper understanding of financial forecasts, budgets, and operational costs. Creating a baseline and demonstrating the spending and impact of HR is essential for facilitating robust conversations about future investments.

HR also needs to work with the business to develop robust business cases where investment is required. For example, when considering implementing an ERP system, the business case should clearly show the required return on investment and the anticipated savings or value gains and provide a clear financial roadmap to obtain these investments.

Over to you

We can no longer ignore HR’s bad reputation. HR leaders need to take action by becoming credible activists for the profession, being respected for their contribution, and educating stakeholders on the role and impact of modern HR practices.

As the role and scope of HR continue to change, organizations need to ensure that they clarify expectations and set HR teams up for success.

The post HR Has a Bad Reputation: 6 Actions To Improve HR Credibility appeared first on AIHR.

New legislation, such as the EU AI Act and the New York AI Bias law, has drawn attention to AI’s risks to HR. Organizations must approach adopting AI solutions responsibly to reap their full benefits.

In this article, we discuss an AI Risk Framework that can be used to evaluate the trustworthiness of AI technologies, specifically focusing on applying the framework to recruitment.

Contents
The current state of AI in recruitment
Using the AI risk framework to responsibly adopt AI in recruitment

The current state of AI in recruitment

Applicant Tracking Systems (ATS) pioneered the use of AI in recruitment with a critical focus on enhancing the quality and efficiency of recruitment practices.

With the emergence of generative AI, the applications of AI within recruitment have dramatically expanded. This advanced form of AI goes beyond streamlining processes to focus on driving higher levels of personalization, advanced predictive analytical insights predicting candidate success, and a reduction of bias in hiring decisions. 

Organizations such as Electrolux, Cigna, and Kuehne and Nagel have all reported significant gains in productivity, quality of output, and impact of HR by adopting generative AI.

Businesses can apply generative AI throughout various stages of the recruitment process:

We discussed AI in recruitment with Qasim Asad Salam, CEO and Co-founder of Remotebase, a company that helps organizations hire remote software developers. You can watch the full episode below:

There are, however, risks associated with using generative AI in recruitment, and many cases of irresponsible use have made HR professionals reluctant to experiment. Risks related to privacy, bias, and candidate trust have led to questioning the ethics of using GenAI for recruitment purposes.

Many HR professionals report that they are unsure of how and where to apply AI, raising concerns about privacy and data security as the main barriers. Our research at AIHR indicates that many HR professionals experience a sense of inaction, needing to learn how to get started with AI or how to evaluate the safe utilization of AI systems. 

Using the AI risk framework to responsibly adopt AI in recruitment

Organizations that want to adopt AI in recruitment and other areas of HR responsibly need to take a systematic approach. That way, they can address ethical and legal considerations, as well as enhance the strategic and operational effectiveness of AI initiatives within Human Resources.

The framework below, adapted from the National Institute of Standards and Technology and the World Economic Forum, highlights the essential criteria and questions that can be used to evaluate the trustworthiness of AI systems.

Using these questions, organizations can determine the level of risk associated with implementation:

• Acceptable Risk refers to instances where the risks are known and controls are in place to mitigate them. For example, there are controls in place to mitigate selection bias during sourcing reporting on demographic variables.
• Mitigation Required highlights instances where further controls must be implemented before considering adoption. For example, a process needs to be implemented to review AI decisions over a period of time aligned to critical job requirements.
• Unacceptable Risk refers to instances where, regardless of the controls, the potential for harm is significantly more than the perceived benefit. For example, where AI will cause harm due to its recommendations and predictions.

Importantly, these characteristics are interrelated, and when evaluating AI risk, they must be examined in relation to each other. Organizations will have to make trade-offs to ensure responsible adoption and effectively manage the risk of using AI as part of their recruitment practices.

Putting the model into practice

Our hypothetical company, TX Energy, is a large manufacturing business focused on developing solar power energy systems. They have grown significantly, and the workforce has grown substantially over the past three years. They are considering implementing new GenAI technologies into their recruitment process to achieve the following benefits:

• Proactive sourcing of highly critical talent, such as engineers
• Conduct interviews with high-volume recruitment applications such as customer service
• Drive predictive analytics better to understand the success criteria of potential implementation consultants.

Using the framework above, TX Energy assesses the risk and trustworthiness of the solution as follows:

Following this thorough analysis, TX Energy has decided to adopt the AI solution, initiating a 3-month pilot program. This preliminary phase will test the previously outlined controls, aiming to effectively mitigate the identified risks.

This strategic approach ensures that potential challenges are addressed in a controlled environment, paving the way for a smooth transition to a large-scale implementation upon successfully completing the pilot.

Final words

We are still only at the beginning of the AI revolution in HR. As organizations adopt AI more extensively in recruitment and beyond, they must have a solid foundation to evaluate the trustworthiness of AI systems and use them responsibly.

AI provides significant opportunities to HR professionals, but it’s important to balance benefits with a responsible adoption approach that considers the risks associated with these technologies and enables organizations to make informed decisions regarding their use.

The post AI in Recruitment: Managing the Risks for Successful Adoption appeared first on AIHR.

Let’s take a look at what the future of employee experience is and how organizations can overcome the challenges that prevent them from fully capitalizing on its benefits.

Contents
The current EX reality in organizations
6 challenges that stop companies from getting value from EX efforts
Challenge 1: EX is everything and nothing – there is no clear definition
Challenge 2: EX is a thing to do – not a way of doing
Challenge 3: EX is not for everyone
Challenge 4: EX is seen as a data exercise
Challenge 5: Limited investment in EX maturity
Challenge 6: EX is not measured at different levels
The Employee Experience Value Driver Model

The current EX reality in organizations

The current EX reality is one of paradox.

On the one hand, organizations have demonstrated the value of EX by showing its positive impact on productivity, employee engagement, retention, and performance. These businesses recognized EX’s value and embedded its principles deeply within their HR frameworks, showcasing a clear commitment to fostering a vibrant and productive workplace culture.

Conversely, the journey towards fully integrating EX into organizational DNA has proven challenging for others. There are even speculations about an impending “EX-recession” as companies contemplate dialing back on EX investments amidst a shift towards a more employer-dominated market.

However, neglecting EX will be a detrimental mistake for organizations. The repercussions of such a decision—ranging from tarnished employer branding and diminished employee productivity to a decline in retention rates—could have a profound and adverse effect on overall business performance.

The reason for businesses passing up the opportunities EX brings is often the critical obstacles that prevent their EX initiatives from reaching their full potential.

We discussed the current and future employee experience with Ben Whitter, EX author, speaker, and coach. Watch the full interview below:

6 challenges that stop companies from getting value from EX efforts

Challenge 1: EX is everything and nothing – there is no clear definition

Many organizations face a common challenge in clearly defining EX and understanding its value proposition.

This ambiguity can lead to EX embodying the characteristics of the department that initiated it. For instance, when HR leads the charge, EX is often perceived purely as an HR initiative. If spearheaded by an analytics team, it’s viewed as a technology-focused endeavor concerning people analytics. Similarly, EX might be seen as just another project when driven by a change management office.

This lack of a precise definition carries the risk of EX becoming overly broad, trying to be all things to all people, which dilutes its focus.

Instead of fostering a way of thinking that promotes a cohesive and holistic employee experience, this ambiguity leads to fragmented and disconnected activities. These may create memorable moments but fail to offer a comprehensive approach to EX, thus diminishing its potential impact and leading stakeholders to question its value.

Challenge 2: EX is a thing to do – not a way of doing

The transition of EX from project mode to a core organizational capability is a significant hurdle for many companies.

Initially, due to constraints like limited resources, EX often begins as a focused project aimed at enhancing a single aspect of people practices, such as onboarding. This narrow approach can inadvertently cement EX as a transient “task” rather than a foundational element of the organization’s culture and strategy.

A recent report highlighted that just over 50% of EX teams focus solely on EX, with the majority of organizations adding EX to already overburdened team members with other responsibilities.

For EX to evolve and truly add value, organizations must embrace it as a comprehensive mindset that permeates all aspects of people management and workplace experiences. This means shifting away from viewing EX as a series of isolated projects to integrating it as a fundamental perspective—a lens through which every decision about people’s practices is viewed, designed, developed, and delivered. 

Achieving this level of maturity requires a deliberate effort to embed EX into organizational culture, ensuring it influences all facets of employee interaction and engagement.

Challenge 3: EX is not for everyone

Unfortunately, EX tends to focus predominantly on professional service or desk workers in many organizations.

Frontline employees, who often face unique challenges related to the size of the workforce, location, and working conditions, receive considerably less attention regarding EX initiatives. This oversight is particularly regrettable since the essence of EX is to foster inclusivity and improve the work lives of all employees, not just a more accessible minority.

Integrating EX strategies into the practices affecting frontline staff can bring substantial advantages to the business. These benefits include enhanced productivity, improved employee performance, and deeper commitment.

Achieving these outcomes requires a broader, more inclusive approach to EX that recognizes and addresses the specific needs and challenges faced by frontline workers, ensuring that EX initiatives are truly comprehensive and benefit the entire workforce.

Challenge 4: EX is seen as a data exercise

The push towards evidence-based HR and the incorporation of people analytics has significantly benefited the EX domain. However, some organizations have overly fixated on the quantitative aspect, neglecting the essence of EX as a comprehensive approach. 

Data plays a crucial role in informing EX initiatives, but it should serve as a means to an end rather than the end itself. EX transcends mere data collection; it’s about utilizing insights to continually refine, guide, and enhance the employee experience over time.

When organizations become preoccupied with gathering data, EX risks being reduced to a passive listening exercise. This approach can lead to an abundance of insights and feedback but results in minimal actionable change or meaningful impact on employees’ lives. For EX to fulfill its potential, it’s essential to balance data-driven insights with actionable strategies that directly improve employees’ everyday experiences, ensuring that the data serves as a powerful tool for holistic and impactful EX development.

Challenge 5: Limited investment in EX maturity

Establishing an EX capability is akin to enhancing any other organizational function. It requires dedicated investment and strategic focus. However, the challenges outlined previously have led to a few organizations adopting a systematic approach to develop their EX capabilities. It’s not easy to secure the necessary expertise and position EX as a key driver of strategic value.

Implementing a step-by-step methodology designed to elevate EX demands a substantial commitment to educating stakeholders and strategically aligning EX within the organization. This is a process that many organizations unfortunately overlook or inadequately prioritize.

Challenge 6: EX is not measured at different levels

The final hurdle in optimizing EX lies in its measurement. Many organizations do not have a comprehensive framework for evaluating the impact of EX, resulting in its value often remaining unseen.

To effectively measure EX, a nuanced, multi-tiered framework is essential. This framework should encompass the operational aspects of EX, the outcomes derived from EX initiatives, and the broader impact of EX on the organization. Each level should address different facets of EX value, providing a holistic view of its effectiveness.

The Employee Experience Value Driver Model

Addressing the common employee experience challenges is both possible and crucial. When approached correctly, establishing a well-defined EX practice can yield significant benefits for the business.

Taking a more integrated approach is necessary for EX to evolve into a strategic asset and consistently deliver its promised value.

The model presented below outlines essential value levers that organizations must prioritize to enhance their EX capabilities. The five levers are designed to guide organizations toward achieving long-term success in their EX initiatives:

• Strategy: There needs to be a well-defined and integrated strategy in place that links EX to the broader business and people strategy. The strategy needs to set out a clear path for EX and determine its focus concerning the most significant areas of impact. It should also clarify how the organization defines EX, what it is not, and how they will measure the impact of EX.
• Structure: The organization needs to implement an EX structure that defines an EX operating model and how it will work with other parts of the organization. EX is a function that has to collaborate with various parties such as Facilities, IT, Operations, and Marketing. A clearly defined EX Operating Model will allow for smoother collaboration and value. Notably, the model also needs to highlight where decision-making will occur and who takes accountability for the EX mandate.
• Skills: The organization requires access to EX-specific skills and invests in building the team’s capability to deliver on their ambition. EX skills are diverse, and a robust talent approach should help organizations understand which skills they want to buy, borrow, build, or bridge to meet the employee experience demands.
• Systems of work: The systems of work refers to how EX work gets done within the organization, specifically focusing on four domains:
  • Process refers to establishing business as usual, incremental improvement, and project processes that guide the delivery of EX activities. Processes require clear accountability and workflows to be efficient and drive a mindset of execution.
  • Technology describes a clear set of technologies such as platforms, AI, and cloud solutions that support and enable EX activities. This will include a future roadmap highlighting new developments and ensuring that EX is integrated into HR and line of business systems.
  • Data refers to how EX data will be collected, stored, accessed, and analyzed to drive evidence and insights-driven EX practice.
  • Governance is about the habits, forums, and routines that need to occur within the organization for EX to be effective. This could include EX operations meetings, incorporating employee experience into the strategy agenda, and quarterly showcases of EX initiatives.
• Stakeholders: Given the integrated nature of an EX function, stakeholder management is paramount to its success. For the EX capability to be successful, it requires a clear understanding of its key stakeholders, ranging from those who sponsor EX at an executive level to the target audiences of the designed experiences.

These domains of EX can only be successful if guided by a strong EX-focused leadership team. This implies a team that understands the value of employee experience, actively champions it as part of business practice, and believes in the underlying philosophy that a great EX makes for a great company.

When all these levers work together, they contribute towards a human and experience-centric culture that drives business value.

You can utilize the model above to evaluate your EX practice’s current health and identify priorities and areas of focus:

Wrapping up

Organizations that invest in employee experience will benefit from improved performance, productivity, and engagement. However, achieving lasting value from EX demands a structured and targeted approach.

The EX driver model equips organizations with a strategic framework to implement the necessary levers for sustained success, ensuring that investments in EX lead to meaningful and long-term value.

The post The Future of Employee Experience: The EX Value Driver Model appeared first on AIHR.

In this article, we explore how environmental, social, and governance (ESG) requirements are changing the role of HR and highlight the opportunities on the horizon for HR leaders and professionals as part of the ESG agenda.

Contents
Understanding ESG
How HR contributes to the ESG agenda
Integrating ESG into the HR strategy
How HR can start driving ESG within their organization

Understanding ESG

The ESG acronym stands for three domains of responsibility organizations need to consider in terms of how they conduct their business: environmental, social, and governance.

Environmental

Environmental refers to the impact organizations have on the environment. For example, their carbon footprint, utilization of resources, and adoption of pro-environmental practices.

Case example

BMW Group is using renewable energy at their plants.

• Wind turbines support production at the Leipzig plant in Germany, and hydrogen fuels approximately 130 floor conveyors. The facility is also piloting a newly developed hydrogen-powered burner technology in its paint shop.
• The San Luis Potosi site in Mexico fully powers its operations with CO2-free electricity, thanks to solar panels.
• The Munich site harnesses hydroelectric power from the Lech and Isar rivers to generate electricity for its production needs.

Social

Social refers to how the organization manages its relationship with other parties, including its employees, customers, suppliers, and communities. For example, responsible labor practices, focus on inclusive work, and upholding human rights and safety all relate to the social pillar.

Case example

Nestle, Mars, and Hershey all source cocoa from West Africa, where cases of child labor and forced labor have been an unresolved challenge. Public scrutiny has demanded some of these brands take a more active view on dealing with responsible suppliers and ensuring fair and decent practices.

In contrast, Tony Chocolonely is a brand committed to fair practices and paying fair prices to ensure decent work practices from their suppliers. By their own admission, they are not 100% slave-free but actively campaign and eradicate unfair labor practices from their supply chain.

Governance

Governance refers to how the company is managed. For example, factors such as board diversity, executive compensation, transparency of policy and practice, and ethics are all related to the governance pillar.

Case example

Many companies took to social media to celebrate their commitment to female representation in leadership on International Women’s Day 2023. Meanwhile, Francesca Lawsome and Ali Fensome built a gender pay gap chatbot that automatically extracted publicly accessible data from these companies to assess their commitment to gender equality in the workplace.

This initiative showed many inconsistencies between what companies say and what they do:

• Heathrow Airport posted stories from “Women at Heathrow”. However, women’s median hourly pay is 14% lower than men’s.
• Male employees at the domestic violence charity Refuge were paid 23.9% more than their female counterparts.
• On International Women’s Day, Scottish Widows promoted its services aimed at closing the pension gap. It turned out that they pay female employees 14% less than their male workers.

ESG is about managing risks and making conscious decisions on how the organization engages with the world, acts responsibly as part of the community, and upholds excellent ethical practices. It involves holding organizations to predefined standards and good practice frameworks.

In many organizations, ESG is the sole responsibility of Investor Relations or Sustainability Committees, yet this approach does not deliver tangible results. Traditionally, ESG has been understood from investors’ perspective, highlighting their desire to allocate resources to companies that act responsibly and sustainably. Professor Adolf Berle is considered the father of ESG, and his work in the 1930s set the tone for modern-day practices related to the social responsibility of for-profit corporations.

ESG has to be ingrained across the organization as a way of work that permeates across departments in the culture of the business. Even though some aspects will find a natural home given the areas of accountability and responsibility, ESG cannot be something organizations “do” but needs to become part of what they are.

We discussed ESG and HR with ESG advisor Sakshi Bansal. Watch the full interview below:

How HR contributes to the ESG agenda

Shifting our lens to HR, various matters related to ESG fall within the responsibility of Human Resources. Unfortunately, many HR professionals don’t make the connection, and ESG remains a concept that does not reside within the scope of their function.

Contrary to this belief, HR is already actively involved in ESG in many ways. Here is an overview:

It’s clear that ESG activities are closely linked to the HR strategy. Currently, in many organizations, HR does not actively incorporate ESG activities into the people strategy, often only being involved at an operational level. They are not present in strategic conversations regarding how ESG can be incorporated into organizational culture, practice, and values.

For HR to become more active within the ESG domain, a shift in strategy is required.

Integrating ESG into the HR strategy

There are two different approaches to integrating ESG into the HR agenda. Both have benefits and limitations; depending on the business context, organizations need to make a decision about which will be more appropriate.

Approach 1:  ESG as an independent pillar and area in the HR strategy

In this approach, ESG becomes a dedicated strategic pillar of the HR strategy next to key components like talent acquisition, talent management, and compensation and benefits.

The benefit of this approach is that ESG is articulated clearly with designated objectives and outcomes related to the topic. The limitation of this approach relates to the sense that ESG responsibility only resides with the team that focuses on that pillar. This positioning could create a lack of shared accountability with other functions not actively contributing to ESG. 

This approach might be a good fit for HR teams only starting with ESG initiatives as it allows the opportunity to first incubate skills and knowledge related to ESG. With active collaboration and alignment between different functions, this approach can provide a good foundation for ESG to deliver value.

Approach 2:  ESG as a value underpinning the HR strategy

The second approach sees ESG as an integrated approach where all functions need to contribute to function-specific goals related to ESG. In other words, ESG becomes a shared responsibility.

This approach requires a broader and more intimate understanding of ESG to understand the different contributing factors. It is well suited to organizations that have established the foundational understanding and importance of ESG and allows ESG to be fully integrated into the organizational focus and culture.

The risk of this approach is that ESG is not actively monitored and reported upon as part of operational and strategic progress. If not monitored, this could lead to inaction.

“A significant undercurrent is the belief that ESG is for finance and economics people. Almost as if it does not affect the rest of the organization or the normal working population.  

 

It is like saying, “Oh, like I breathe the air, but the air quality is not my concern.” It’s not possible. If you are living in this world, then sustainability is your concern. It concerns you, your business, your activity, and your job description. And just because the word sustainability isn’t in your job description doesn’t mean that there’s nothing for you to do with it.”

Sakshi Bansal, ESG Advisor

“When organizations go from a 15-person company to a 50 to a 100 to a 500, there are step changes in an organization that need to be reflected in your recruitment, people, and governance strategies. 

 

And these are things that we historically have seen that technical leaders, as great as they are, aren’t able to build a strategy for. You can’t expect your CTOs and CEOs to have the intrinsic know-how to build such large HR processes.”

Sakshi Bansal, ESG Advisor

How HR can start driving ESG within their organization

The following actions can enable HR to build the knowledge, skills, and expertise required to champion the ESG agenda as part of the HR scope.

Action 1: Build knowledge by understanding current ESG frameworks and standards

First, HR must better understand the current ESG frameworks and the standards they refer to. Even though the scope of this article will not cover each of these in detail, the following frameworks are important:

Action 2: Analyze current HR practices and processes

HR teams can analyze current HR practices using these frameworks to assess the strengths and gaps that need addressing. For example, the ILO provides standards and guidelines to evaluate decent work practices.

The next step is to use data and people analytics to better understand the talent pools, inherent biases, and potential barriers to employment within the organization.

For example, a multi-national insurance business used labor data to evaluate their pay equity practices. Over three years, it managed to close the gender pay gap and start reporting transparently on pay.

Action 3: Bring a committee together to discuss ESG

ESG is a shared responsibility, and establishing an internal, cross-functional committee to discuss ESG matters is essential.

Participants of this committee need to include representatives from Risk, Finance, HR, Facilities, Legal, Corporate Social Responsibility, and Operations as a starting point and be empowered to make recommendations to the executive team on improving the ESG agenda.  

Where ESG practices become more advanced, the organization should appoint a Sustainability Officer with a team that actively drives and manages ESG-related matters.

“If CHROs want to find their voice regarding ESG, this is a good time to differentiate themselves. With a sense of transparency, the power of factual reporting, and conveying a clear message, ESG is not about how organizations set themselves up after making money but how they make their money in the first place.

 

This is about the DNA of the organization, the business, the contracts, and what goes into that thought process. These topics are the fabric of both HR and ESG.”

Sakshi Bansal, ESG Advisor

Action 4: Create a clear stance on ESG matters for the organization to implement

For many, ESG remains a theoretical concept, and they don’t see the practical actions that can lead to a better future. The organization must develop a clear stance on ESG-related matters, defining its focus and priorities in a way that resonates both internally and externally. It’s important to create and clearly articulate the ESG strategy and goals, ensuring that investors, employees, and other stakeholders understand their practical impact.

Internally, within the organization, employees must understand how ESG is incorporated into how the organization operates and what is expected daily to deliver on the internally set goals.

Wrapping up

The HR contribution to ESG practices has to take priority in people strategies and practices going forward. For too long, ESG has not been perceived as a shared responsibility within the organization, and HR has a crucial role in ingraining ESG into organizational culture, values, and practices. 

To do so, HR professionals must educate themselves on the available ESG frameworks and how they can be applied within their organizations to drive action.

The post ESG and HR: What You Need To Know and Where To Start appeared first on AIHR.

With the advances in artificial intelligence to enhance efficiencies and an increased focus on employee experience, there is a need to re-evaluate how HR service models evolve to drive both of these critical aspects of modern organizations to their full potential.

In this article, we position the Experience-Driven HR Service Delivery Model as a way for HR organizations to balance efficiency, cost, technology, and engaging employee experience to deliver HR services to their stakeholders.

Contents
The traditional HR service delivery model
The Experience-Driven HR Service Delivery Model
How HR can get started

The traditional HR service delivery model

The traditional HR service delivery model is based upon a tiered approach to deal with employee queries effectively. The model divides HR services into the following tiers with an attempt to resolve as many queries as possible in the lower tiers:

The key drivers of the HR service delivery model are to drive efficiency of HR query resolution while also introducing consistency in service delivery. The model has been successful in terms of its intended purpose of efficiency, yet there are a few limitations within the model:

• The model is reactive in responding to employee queries and has a limited focus on proactive services to employees
• The model does not provide a personalized experience for the employee, with the main drivers being standardization and consistency
• Resourcing Tier 2 and Tier 3 of the model tends to be costly. If first-time query resolution does not happen at Tier 0 or 1, the model pulls expensive resources into operational matters. 

With the quickly advancing generative AI and workflow technologies, as well as the incorporation of design thinking and customer relationship management principles into employee experiences, there is an opportunity to evolve the current model to address these limitations.

We discussed HR service delivery with HR consultant and founder of HRhotline.com, Carol Awad. You can watch the full interview below:

The Experience-Driven HR Service Delivery Model

The Experience-Driven HR Services Delivery Model builds upon current HR service centers and introduces four evolutions:

Evolution 1: From a standardized self-service experience to a personalized interaction based on personas

The revised model starts by segmenting the employee audience into specific groups or personas based on particular needs, preferences, or characteristics. For example, this could include identifying head office versus frontline employees and differentiating based on location or which sub-brand of the business the employee belongs to. 

Depending on the employee’s group, businesses can tailor and customize the self-service experience for that grouping. By doing so, employees can access services that are applicable and relevant to them. For example, the self-service experience could carry different branding or have a view of the services available to that location for that employee.

At its most advanced level, employees should be able to dictate their own experience based on their preferences on what they want to see on their landing page, the information relevant to them on their home screen, and saving shortcuts to the services they use most frequently.

Evolution 2: Incorporate AI as a companion and guide to interact with and address questions

The next evolution is in the use of AI as a companion in Tier 0. The AI companion can provide a more personalized and engaging experience using the organizational content library of policies and processes.

Operating as a chatbot, we are already seeing organizations creating more personalization with employees being able to choose which AI persona they engage with. For example, a financial services chatbot guides employees through updating their employee details and accessing their payslips and tax information.

The AI companion will complement the self-service workflows and direct employees to the appropriate self-service workflows where applicable. For example, updating beneficiaries on a policy or changing location details can be done by employees themselves, yet this will initiate a workflow to alert others that this action has taken place.

Evolution 3: Increase capacity through alternate sourcing strategies at tier 2 and 3

Tier 2 relates to the general support center that consists of a layer of generalist employees that can be reached via a multitude of channels such as telephone, e-mail, and tools such as WhatsApp or live chat as first-line support.

Queries that cannot be resolved at first contact are then directed to a specific area of expertise before being referred to Tier 3 for expert resolution.

To accommodate capacity, tier 2 and tier 3 can utilize various sourcing strategies, such as in-sourcing, co-sourcing, and outsourcing:

• In-sourcing involves the allocation of permanent employees to the service model full-time
• Outsourcing refers to bringing in capacity from third-party vendors
• Co-sourcing entails contracting with specific independent individuals to bring their expertise to the service center.

This is especially helpful in highly specialized and niche areas such as benefits and rewards queries, career management, and employee value proposition services.

Creating this additional capacity has various benefits:

• Allows scaling up and down of resource requirements, which will be more cost-effective
• Enables employees to have access to specialized advice and services which they will not usually have access to
• The organization can adapt its resource plan to accommodate the needs of specific personas

Evolution 4: Incorporate both an inbound and outbound service flow

The next evolution is about incorporating inbound and outbound services into the model. 

Inbound services related to the employee accessing the self-service platform or contacting the service center are similar to current HR service models.

Outbound services refer to situations where the service center proactively contacts the employee based on specified triggers or life events. For example, an employee requesting parental leave could trigger an outbound proposal to the employee as to whether they would like to schedule a call with a financial advisor given the changes in their life circumstances.

Similarly, an employee accessing specific wellbeing services could be made aware of additional support available within the organization.

This outbound service provides a more proactive approach to HR service delivery and, if done correctly, offers significant personal value to the employee. 

From an organizational perspective, the outbound service also mitigates risk by ensuring up-to-date information and employees are made aware of relevant services the organization provides aligned to memorable life events.

How HR can get started

Moving current HR services to the evolved model needs to be approached in a structured manner.

Beyond the design of the model and the underpinning technology requirements, businesses need to address the change management process that guides employees on how to engage with the model and assures them of privacy and confidentiality to ensure the successful adoption of the model.

Step 1: Evaluate the target employee segments within your workforce

First, HR needs to understand the target segments of the workforce and the criteria that will be used to identify which segment employees belong to.

These segments should not be based on assumptions but rather by using data-driven approaches to identify the needs and composition of the workforce. For example, you might find out that your retail store workers’ needs differ from the needs of the headquarters employees.

Step 2: Scope the services that the model needs to be able to deliver

Once HR has a clear idea of the employee segments, the next step is to design the employee journey when engaging with HR services and map the services the service center will provide. This is a crucial step to better understand the desired employee experience, clarify the HR service proposition, and which services can or cannot be offered.

Similarly, during this step, the HR team should identify which service channels they will offer, ranging from mobile solutions to phone and helpdesk services. These channels must align with the services being offered and defined in terms of their applicability at each tier.

Step 3: Evaluate the technology requirements to enable the model

Once you’ve defined the services, the next step is to scope the underpinning technology platforms required to operationalize the services. This should include the integration requirements with current internal technologies such as the intranet, content libraries, and the existing HR technology stack. 

Depending on which channels need to be enabled, this will influence the decision related to the required technology investments, as well as the implementation roadmap.

Step 4: Decide on a resourcing model to support tier 2 and 3

The next step is to understand the appropriate resourcing model underpinning the services. Consider a blended approach that incorporates insourcing, co-sourcing, and outsourcing solutions. However, this needs to be guided by the services offered, internal resource availability, and financial constraints.

You’ll need to adapt the resourcing model as you gain more clarity regarding volumes, types of queries, and solutions you’ll offer.

Step 5: Socialize the change in approach with employees

One of the most critical steps is the change management required to educate and enable employees to engage with the new HR services. Even though there are significant benefits in adopting this approach, some employees will have concerns about confidentiality and privacy, as well as a sense of loss, as they will now interact with technology instead of their HR administrator.

You should highlight the solution’s benefits while making it straightforward for employees to engage with the new services, share success stories, and report on key metrics as the service model matures.

Step 6: Implement a robust measurement framework to demonstrate value

A robust measurement framework will help you demonstrate the impact of the services model in terms of efficiency, effectiveness, and experience. At the outset, these metrics need to be measured, tracked, and services adjusted to ensure the long-term success of the model.

The evolving model calls for a reevaluation of the success criteria of HR service delivery. Traditionally, organizations monitored the following metrics to evaluate the success of the HR service model:

• Efficiencies were measured through the speed of query resolution, % of queries that could be resolved through 1st-time resolution, and the volume of queries being resolved at each tier of the model.
• Costs were measured in terms of the query resolution cost, savings within the center per transaction completed, and time spent by different resources to resolve queries.
• Service satisfaction in terms of basic feedback from users on their interaction with the service center.

These measures will remain applicable in the evolved model, yet there will be additional success metrics to consider:

• The employee experience can be measured through key feedback points due to interaction with HR Services. Similar to customer experience, the employee journey when engaging with the service center needs to be mapped, and critical feedback points identified.
• Furthermore, the model should monitor the eNPS score for HR services and ask employees whether they would recommend these services to other employees. This becomes especially important when providing newer solutions such as career services, learning, and benefit recommendations.

Final words

As employees expect more personalized services from HR, utilizing technologies such as generative AI and adopting design and customer relationship management principles can become a game changer for HR service centers.

Evolving current models provide new opportunities to drive an engaging and personalized employee experience while retaining the focus on efficiencies and cost for the future.

The post Experience-Driven HR Service Delivery Model: The Way Forward appeared first on AIHR.

In this article, we explore four ways that AI is already changing how employees learn and propose an action plan for how HR can adopt AI in learning and development responsibly.

Contents
The current state of AI in learning and development
Four ways that AI is changing the employee learning experience
How HR can drive responsible AI adoption in learning and development

The current state of AI in learning and development

The Learning and Development function has pioneered the adoption of AI in HR. The online learning platform market size has increased exponentially over the past few years, and the estimated investment in the AI education market will grow to a compounded annual growth rate of 36%, reaching USD 32.27 billion by 2030.

AI has contributed meaningfully to learning management systems, learning experience platforms, and learning analytics. 

However, the adoption of AI has not been without its challenges. Firstly, the technology behind AI has not yet advanced enough for widespread use. Additionally, L&D teams have lacked the maturity to effectively integrate AI into their work.

Issues like bias, intellectual property rights, and the difficulty in combining AI with different learning platforms have also slowed the impact of AI on learning and development.

AI has been criticized as much of its adoption has benefited those creating learning content, with less of a focus on the learner and their experience. Amidst all the promise of learning personalization, AI has yet to deliver to its full potential.

These limitations are starting to become something of the past, especially with the new capabilities that generative AI brings to the table. A key focus not only on the process and management of learning and development but its actual application to the learning experience is starting to usher in a new era of AI-based learning.

We discussed the future of L&D with Ioanna Mantzouridou Onasi, CEO and Co-founder of the AI coaching platform Dextego. Watch the full interview below:

4 ways that AI is changing the employee learning experience

Let’s take a look at how AI has impacted the employee learning experience.

1. Generative AI is making learning accessible to all

Learning accessibility has always been a critical challenge, especially concerning the needs of neurodivergent employees.

Standards such as the W3C Accessibility Guidelines (WACG) have proposed principles to make learning perceivable, operable, understandable, and robust (POUR) to meet the needs of different users. In the past, achieving these standards has been difficult for learning vendors. 

Increased efforts to convert content into multiple formats, color schemes, and languages to accommodate different learning needs have been costly and often led to the exclusion of many of the workforce in online learning.  

Given the recent advances in AI, vendors can address these challenges more cost-effectively. A good example is braille translation software that converts text into braille and makes it accessible for sight-impaired learners. As with all AI, challenges remain in this area, yet there’s been significant progress in making learning content accessible to all employees within the organization.

More generally, AI has provided the ability to automatically transcribe audio and video content to text for hard-of-hearing learners and to use AI to drive auto-translation into various languages. This has opened new markets for learning vendors. Also, organizations operating across multiple geographies can provide a more consistent learning experience regardless of region while saving content development time for internal L&D teams.

AI will only get better. Today, the fact that we are able to even play with an AI coach and be in a psychologically safe environment where we can share our thoughts, get some feedback, get some advice, is great. It gives access to a diverse group of people who might not find the right human coach for them. It also allows people from all around the world to have access to coaching, and in some countries, coaching or even therapy are still taboo. Now, they have access to a digital version of a coach.

Ioanna Mantzouridou Onasi, CEO and Co-founder of Dextego

2. AI is making learning personal and curated

Given the amount of new learning content generated daily, the biggest challenge for learners is often knowing which content is applicable and relevant to their specific needs.

Even though AI has been used to suggest and recommend learning content before, recent advances have improved its accuracy significantly. Today, AI uses various data sources, such as assessment data, learner interests, career goals, and past learning experiences, to propose personalized learning.

A good example is how Capgemini has applied Anderson Pink to curate content and drive personalized skills-based learning. Quuu, UpContent, and Scoop.it are good examples of content curation tools that help look at public domain content regarding a specific topic and incorporate key areas into organizational learning strategies.

This has already created new opportunities to adapt learning to individual development plans and career aspirations. Learning recommendations tended to be somewhat generic in the past, whereas AI-based suggestions enable a more curated learning experience across content types, catalogs, and libraries.

Especially in career development, platforms such as Fuel 50 have allowed organizations to rethink internal mobility and drive career ownership, as highlighted by their work with KeyBank.

Gen Z is coming into the workplace saying, enough, I don’t like the way you teach us skills. And saying, “I need to also feel like I’m in charge of my learning”. The way AI can democratize access is by putting the learner in the forefront and saying, what do you need to learn to be successful? What are your current skills, and how can we help you get where you must be without making you feel like you’re reading a book?

Ioanna Mantzouridou Onasi, CEO and Co-founder of Dextego

3. AI is acting as a learning coach to improve the learning impact

Beyond content curation, AI has also become a learning coach that provides real-time feedback and suggestions to learners related to specific skills.

There are several ways AI complements or fulfills the role of a learning coach, including addressing queries, responding to learning challenges, and providing feedback and support throughout the learning process. Organizations are starting to implement safe and responsible AI-based coaching specific to learning utilization.

Players like Dextego focus on a fun and engaging learning experience related to human or soft skills for Gen Z learners.

Another example is Wondder, who uses AI and virtual reality to give feedback on scenarios such as performance discussions or DEIB situations. For example, they implemented a gender awareness program at Advance to give participants different experiences to raise awareness of gender inequality.

LinkedIn Learning is rolling out a new AI-powered coaching system that will enable members to seek guidance on specific business questions. Using a chatbot interface, it will act as a coach by guiding users through their learning journey, answering specific questions, and recommending related learning content based on the user’s job and situation.

As a learning coach, AI can significantly enhance the efficiency, personalization, and effectiveness of the learning experience. It provides a level of individual attention and support that can be difficult to replicate in conventional learning environments, especially at scale.

4. AI is becoming a powerful content creator

Even though this is still in its infancy, we have seen several new AI-based content generators. Specifically, in this application of AI, we extend a word of caution as the accuracy of newly generated AI content is not without problems.

Nonetheless, within the organizational context, AI can be a powerful tool as a content generator. For example, AI can be effectively used to create employee learning content for policy training or other operational processes, particularly when there is already substantial knowledge and documentation available. This provides a solid foundation for AI to learn from and generate content that is specific to the context.

Organizations such as Park+ and Preply have successfully used Narrato Workspace as an AI content creator. We expect more utilization of AI content generators in the future for both in-house and open-source content.

The opportunity for AI in learning and development will contribute to a more engaging and personalized learning experience. However, adopting AI should be done responsibly to ensure concerns such as ethics, relevance, and privacy are respected.

How HR can drive responsible AI adoption in learning and development

HR has a crucial role to play in successfully integrating AI into learning and development. Let’s have a look at six steps HR can take to ensure responsible adoption of AI solutions within the learning and development domain.

Step 1: Understand what AI needs to achieve

First, HR needs to understand what the purpose of the AI application is. For example, approaching AI as a coach for employees versus AI as a content creator will have different implications and implementation approaches.

As a starting point, draw up a clear business case of what is in and out of the scope of the AI application. This should also include looking at:

• If existing technology infrastructure, such as hardware, software, and network capabilities, needs upgrades or additions to support AI learning tools.
• How the AI learning tools will integrate with existing L&D systems and tools like Learning Management Systems, HR systems, and workflow tools.
• What skills your team might need to implement and manage AI-driven learning initiatives, for example, understanding AI and data analytics.

Step 2: Find the right partners and vendors

Next, you should thoroughly familiarize yourself with the partners you will work with. 

Unfortunately, AI has become a buzzword, and vendors often use this terminology in their marketing efforts without it translating into actual solutions. Do thorough due diligence and ensure that you include someone with technology knowledge to aid you in vendor decision-making.

Choosing partners who demonstrate a commitment to ethical AI practices is essential. This includes transparency in how their AI systems work, handle data, and address potential biases. For example, if the algorithm is trained mostly on data from a specific demographic (e.g., male employees in tech roles), it might be less effective or relevant for female employees or those in non-tech roles.

Step 3: Pace your adoption of AI and start within a controlled environment

Ensure a responsible pace of the AI implementation that allows you to answer a few questions:

• Are we clear about where AI gets its data, and do we trust the source?
• Do we understand how AI learns?
• How will we monitor AI outputs to ensure quality, accuracy, and relevance?
• Which use cases are we prioritizing?
• What can the AI not do?

Step 4: Socialize the idea of using AI with your employees

You must be transparent with your employees on how and where AI is incorporated into your learning experience.

Be open about using AI and create a FAQ document with the basic questions for learners who want to know more. It is important to specifically focus on how data is gathered, used, collected, and stored, as well as the guarantees regarding data privacy that you can provide to learners.

Step 5: Implement key control and monitoring governance

Ensure that there is transparent governance regarding how use cases will be monitored, how you will collect feedback from employees on the applicability and impact of using AI, and how to link its use to the measurement of learning effectiveness.

Step 6: Optimize the use of AI over time

Last, you can increase the utilization of AI to additional use cases and audiences over time once you are comfortable that the AI is responsibly delivering the expected value.

This incremental approach allows for careful monitoring and fine-tuning of AI systems, ensuring they meet your employees’ and organization’s learning needs effectively and ethically.

Wrapping up

AI will continue to change the learning and development landscape, and HR and L&D professionals have the exciting opportunity to lead this transformation. By implementing AI responsibly, they can continue to enhance the employee learning experience, making it more accessible, effective, and relevant to a wide range of audiences.

It’s crucial to navigate this journey cautiously. Only responsible adoption will enable long-term value while mitigating the current risks related to bias, privacy, and property rights.

The post AI in Learning and Development: Personalizing the Employee Learning Experience appeared first on AIHR.

Frontline employees are instrumental in delivering client experience, given their proximity to customers. They also represent a significant part of the overall workforce. As global labor shortages lead to challenges in attracting and retaining talent, organizations must re-evaluate the effectiveness of their current frontline employee experience to remain competitive.

Let’s explore how businesses can design an impactful frontline employee experience.

Contents
Who are frontline workers?
The current reality of the frontline employee experience
A new frontline employee experience model
How HR can start improving the frontline employee experience

Who are frontline workers?

A frontline employee refers to an individual who works directly with customers or customers. This definition stretches across education levels and industries and includes employees from various skill backgrounds. Frontline workers are also referred to as deskless workers, as opposed to office or “deskbound” workers.

The frontline workforce represents over 2 billion workers worldwide and accounts for 80% of the workforce.

Frontline employee examples

The current reality of the frontline employee experience

Even though the frontline workforce is the majority of working individuals, the employee experience of these workers is often neglected.

Microsoft reports that 58% of these workers believe their jobs will become more stressful in the coming years. Burnout amongst this workforce segment is at an all-time high. Post the pandemic, 74% of frontline workers displayed signs of burnout.

Conversations regarding remote working and hybrid models have excluded the needs of frontline workers given the location-bound requirements of the work. Furthermore, three out of four frontline employees state they want to be promoted, but less than one in four achieves this goal.

Organizations have struggled to reimagine the frontline employee experience for several reasons:

Even though some of the reasons might have been valid in the past, many of these barriers to creating engaging frontline employee experiences no longer apply. Technological advances, new work arrangements, and flexible practices are all contributing factors that pose new opportunities for the frontline employee experience.

A new frontline employee experience model

The model below complements our previous work on employee experience design. At its core, is the belief that employees should be treated as consumers of the organizational experience. As such, businesses should design experiences according to the same principles that apply to a customer market segment design.

We propose three principles and four practices that should be the foundations of all frontline employee experiences.

Let’s break down the frontline employee experience model.

3 frontline employee experience principles

The three principles at the core of the model – autonomy, flexibility, and belonging – are essentially the intended outcomes of a well-designed frontline employee experience.

1. Autonomy

For the frontline employee, autonomy refers to the authority, responsibility, and opportunity to plan, execute, and manage their tasks and projects within the boundaries set by their organization’s objectives and guidelines.

Autonomy allows individuals to exercise their creativity, problem-solving skills, and judgment. That fosters a sense of ownership and empowerment in their roles. Autonomy does not imply a “free for all” system but rather more opportunities for frontline workers to participate in decisions that impact their work.

2. Flexibility 

Flexibility for frontline employees refers to the ability of employees to adapt their work arrangements, schedules, and tasks to accommodate their individual needs and circumstances while still meeting their job responsibilities and contributing effectively to their organization.

Given the nature of frontline employee responsibilities, many of this workforce segment are location-bound. Even when this is the case, innovative approaches could allow for more flexibility in scheduling, access to learning opportunities, and how shift workers can align their shifts to accommodate life preferences and responsibilities.

3. Belonging

Frontline employees often feel disconnected or alienated from the organization. Even though they form part of a larger organization, they seldom interact with employees beyond their location or shift, leading to a sense of isolation.

Yet, Workday states that 79% of frontline workers who feel a sense of belonging at work have no plans to leave their employer. Creating a sense of belonging goes beyond social networking, but rather to help employees feel respected, supported, and recognized as valued members of the organization.

4 practices that underpin the frontline employee experience

Organizations need to put four specific practices in place to realize the three principles of the frontline employee experience. The model depicts these in its outer ring.

1. Designing meaningful work

Frontline work can be repetitive, monotonous, and strenuous. Organizations need to intentionally consider these factors when designing job activities and how they are executed on the front line beyond considerations such as safety and boredom. 

For example, rotating individual responsibilities within a retail store or providing employees the opportunity to work with new products in a different department are all ways of work that businesses can utilize to break the monotony of repetitive tasks. 

Apart from the actual activities, it is also important to show frontline employees how valued they are in the organization and how they contribute to business success. Too often, these employees are referred to by using “general” or “blanket” terms, which underplays their importance. Employers need to go beyond the numbers and ensure that leaders, especially at the executive level, build meaningful relationships with frontline employees.

Lastly, organizations have to acknowledge that for some employees, work is a way to earn a living and not necessarily a vocation. Frontline workers are sometimes “forced” to develop and move to other positions. If this is not in line with the ambitions and goals of the individual, organizations should not mandate employees to take part in these programs.

That said, it does not mean that businesses shouldn’t make development opportunities available. Rather, the frontline employee should have more say in their own career development.

2. Creating connections in the frontline

Organizations need to enable frontline employees to feel connected to other colleagues even though they might not be on the same shift or location. Technology can play a key role in helping employees connect with others. While their own team might be small, they still feel a sense of connectedness to the broader organization.

Similarly, this could entail including employees in broadcasts and messages and connecting locations together. A well-known global bank has a branch television show that all branch employees watch on Thursday mornings from 8:30 to 9:00 am before the bank opens to the public. All branches can interact, raise questions, and share information about what is happening within the broader business and in the regions.

Ruben Wieman, Co-Founder of deskless employee communication app Oneteam, gives another practical example of employee communication. “Before your first day, you have access to the platform, which will ask you to introduce yourself a little bit. Colleagues will see that notification, will give you a high five, and can comment.

A lot of times in these industries, people work part-time, so it might take a while before you actually see that new colleague. But then, with the app, everyone knows that this is a new colleague.”

Watch the full interview about the employee experience of deskless workers with Ruben Wieman:

3. Appropriate opportunities for growth

For many, frontline work is a way to enter the workforce. Often, these employees have growth ambitions related to aspirations, the opportunity to earn more or expand their skills. Frontline employees should have the opportunity to participate in career planning that is appropriate for them and aligned with their ambitions and what the organization can provide. This goes beyond access to mandatory training but also the opportunity to access digital learning opportunities, job rotations, and learning new skills.

As a good example, a media broadcaster intentionally facilitated that their “riggers” got to spend time with their camera crew to learn skills and enter into apprenticeships over time.

In some countries, the frontline employee is responsible for the livelihood of an extended family or community. Many organizations have utilized this opportunity to help with the development of the direct family of the employee to provide them with better future earning potential to also relieve some of the pressure on their own employees.

4. Investing in the holistic wellbeing of frontline employees

Frontline employee wellbeing is a critical factor not only in the experience but also in the sustained employment of the front line. Organizations need to prioritize the financial, mental, and physical wellbeing of frontline employees.

Due to the nature of the work, physical wellbeing is an important consideration concerning ergonomic work practice design, safety, regular health checks, and working conditions. Beyond safety regulations and hygiene factors, physical wellbeing should include proactive education on wellbeing and access to solutions. For example, mining companies use wearable technologies to monitor miners’ key health measures to ensure that they remain fit for work.

Financial wellbeing is an essential consideration for the front line. Organizations should provide appropriate financial planning services, help with basics such as budgeting, and the opportunity for employees to build wealth while still tending to current financial responsibilities.  

An organization employing frontline workers implemented a savings scheme where their employees reaped significant rewards and substantial payouts after a number of years. However, the lack of financial planning and education can lead to employees spending all that money immediately on cars and other material expenses, negating the intended purpose of helping these employees accumulate wealth.

In terms of the mental wellbeing of the frontline workers, employers should look at traditional employee assistance programs (EAP) and their applicability to the frontline. Often, the services provided by EAPs do not extend to rural areas outside of metropolitan areas. Unfortunately, this inhibits access to these services for frontline workers.

In some more traditional industries, mental wellbeing of frontline workforce is still stigmatized, and it’s seen as a sign of weakness in these communities. Organizations should actively work to address these perceptions and find practical solutions that proactively educate and enable frontline employees to remain in good mental health.

How HR can start improving the frontline employee experience

To address the frontline employee experience, HR can prioritize the following three actions:

Action 1: Get to know who the frontline employee is

The first action is to better understand who the human being is that forms part of the frontline workforce for the organization. Frontline employee groups are not homogenous, so their needs and preferences will differ.

HR should use talent segmentation techniques to create persona profiles of their frontline employees to better identify their needs.

Action 2: Start with one frontline employee-focused experience

Prioritization will be important for HR to gain traction in revisiting the frontline employee experience. Instead of long plans and big, unachievable dreams, the HR department should focus on optimizing one aspect of the frontline experience as a short-term win. Based on the actions taken in understanding who the frontline employee is, HR should prioritize and move to action.

An example of this could be a retail business deciding to improve their cashier and retail assistant onboarding process. Instead of overhauling the entire employee training, they start with a targeted, actionable initiative.

Action 3: Implement a listening strategy

HR should implement an employee listening strategy that allows frontline employee voices to be heard and considered in business decision-making. This can be through surveys, focus groups, town halls and engagements, and other ways to drive dialogue.

The purpose is to make frontline voices part of the organizational dialogue and gather input and feedback from those who know best how the experience can be improved – the frontline workers themselves.

Final words

The frontline employee experience significantly contributes not only to organizational success but also to building sustainable economies. By taking action, HR can play a key role in reinventing the frontline employee experience to benefit the individual, organization, and society as a whole.

The post Frontline Employee Experience: The Why, What, and How appeared first on AIHR.

Organizations are increasingly investing in building people analytics teams. Insights222 reports that 65% of organizations have grown their people analytics teams in the previous 12 months. However, the challenge lies in determining the optimal team structure to drive impact, defining their appropriate position within the organization, and establishing effective collaboration with HR.

This article will discuss four people analytics operating models organizations can consider leveraging value from their people analytics investment. 

Contents
What is an operating model?
Model 1: The centralized expertise hub
Model 2: The hub and spoke model
Model 3: The front-back model
Model 4: The federated model
Choosing the right operating model: 5 questions to answer

What is an operating model?

An operating model is a visual depiction of how an organization or function delivers value. It serves as the strategic framework outlining the desired capabilities, processes, structure, and resources required to execute work. Often referred to as “target operating models,” these depict the organization’s future state aligned with its strategy.

Unlike organograms or depictions of departments, roles, and workflows, the operating model provides a bigger-picture perspective. It illustrates how different capabilities within the organization collaborate to achieve goals.

A target operating model can be likened to the architect’s blueprint of a new shopping mall.  The blueprint shows the mall’s structure, individual store layouts, parking areas, and dining establishments. It also details the water and plumbing systems, power sources, and routing for the internet connectivity cables. 

Each store also has its unique layout, specifying the placement of counters needed, installation of displays, and kitchen arrangements for the restaurants. 

This end-to-end blueprint is the target operating model that encapsulates the mall’s logical design and functionality. This blueprint is similar to how organizational departments or teams are designed to meet the organization’s needs. 

Not having a well-defined and clearly communicated operating model has significant risks. These can lead to various unfavorable outcomes, including:

• Inefficiencies
• Duplication of work
• Inconsistent experience and;
• Poor decision-making.

What is a people analytics operating model?

When it comes to people analytics, the operating model depicts how the people analytics capability can be designed to meet the needs of the business. Every organization is unique, and multiple operating model options are available, each with benefits and limitations. During the design process, organizations must make informed decisions to select the most suitable model based on their goals, required capabilities, and necessary skills to execute.

Designing a suitable people analytics operating model is key to harnessing the power of people and talent analytics. We discussed what people and talent analytics can do for an organization with Reimund Nienaber, HR thought leader and HR consulting director at a talent analytics platform EDLIGO. You can watch the full interview below:

It is important to note that within the broader organizational operating model, there are specific “operating models,” such as the HR operating model. These different models should align with decisions made at higher levels. Similarly, the people analytics model operates within the context of the HR operating model. 

Let’s take a look at four operating model options for your people analytics capability.

Model 1: The centralized expertise hub

In this model, people analytics acts as a centralized hub of expertise within HR and serves the rest of the organization as a service provider. Business units are seen as clients, and work is divided between recurring business-as-usual activities and specifically scoped projects.  

Business-as-usual includes activities such as monthly reports, data consolidation, and governance. Projects could consist of testing specific hypotheses regarding topics such as turnover or working collaboratively with other teams. For example, finance integrates people and financial data.

HR works with the people analytics team and leverages the knowledge, skills, and products as part of their offering to the business. In some organizations, the People Analytics team reports to the HR Technology Executive or the CHRO.

Example:

Friendly Foods is a logistics business focusing on fleet management. They have a centralized people analytics team that reports to the Head of HR. 

People analytics works with the HR Business Partners to provide services to the business. The team also has end-to-end decision-making rights on platforms and tools utilized for the entire business. They also create standards of practice for all people analytics practices.

Model 2: The hub and spoke model

The hub and spoke model involves a central expertise hub and connected spokes across various business lines. In this model, each business unit has its own people analytics team. However, they are all connected to a central hub that oversees governance, shared platforms, standards, and master data that forms part of the Group HR function.

The individual spokes align the people analytics offering to the specific needs of their respective departments. Additionally, the spokes ensure the implementation of groupwide initiatives and the alignment of department-specific solutions with the hub’s standards.

Depending on reporting lines, the people analytics teams within the various departments may either report to the local HR team with a dotted line to the hub or vice versa. People analytics exist as part of the HR team in this model, with the hub team reporting to the HR Technology Executive or the CHRO.

Example:

Comfort Insurance is a retail business that sells funeral policies to the middle-income market. The people analytics team is organized according to a small hub responsible for platforms, data management, and infrastructure. 

The business operates regionally, and each region has a small people analytics team that is responsible for operational reporting, business projects, and business enablement. The team has a dual reporting line, yet the hub team sets the tone for the overall function and acts as a governing body.

Model 3: The front-back model

The front-back model divides people analytics into a client-facing front office with dedicated product or service lines and a back office with shared capabilities.

For example, the front office encompasses various services such as data visualization, operational reporting, special projects, and business enablement. On the other hand, the back office is responsible for data storage, cleaning, and technology infrastructure. To better serve the business, the front office leverages the back office capabilities to deliver specific services. 

An alternative to the front-back design could be organizing the front office according to business units or specific clients. In this design, the front office has more autonomy to leverage the back office when required while localizing people analytics solutions for their business.

In this model, HR partners in business need to work with the front office to understand how best to integrate people analytics solutions to the needs of the business. The people analytics team usually reports centrally in this model. However, there is an option to have the front office teams report to the business unit HR executive.

Example:

Healing Hands is a non-profit organization dedicated to providing mental health services. Its operations encompass four business units: Digital education, on-site clinics, partner networks, and government relations. 

The shared people analytics back office is responsible for managing all IT platforms, tools, and infrastructure. In each business unit, a people analytics partner is responsible for gathering business requirements, special projects, and facilitating business growth. These teams adapt in size and maturity to meet specific business needs. 

The back office works closely with the front office to efficiently utilize shared capabilities while delivering personalized services based on identified needs.

Model 4: The federated model

The federated model decentralizes people analytics teams, allowing them to operate independently within different lines of business. Alignment between these business lines is achieved through communities of practice, with a small central team serving as coordinators and facilitators.

Decisions on shared platforms and architecture are made through consensus. However, business units have full autonomy to explore other options that better suit their specific business needs. This model can still be situated within a bigger HR operating model, but the relationship will be “loose”. Most federations will have full autonomy to design their people analytics capability as they see fit.

This model may not be ideal for initiating a people analytics function. However, it proves highly effective once the business becomes complex, with diverse needs and operational approaches across different lines of business. For instance, a global conglomerate with multiple subsidiaries could benefit from adopting this model, assigning dedicated teams to each subsidiary.

Example:

Grundfield Investments is a holding company with 15 subsidiaries operating in the media industry. Each company covers different sectors, including recording, publishing, online media, and radio. Each subsidiary is equipped with its own dedicated people analytics team that takes full responsibility for this function. Although the teams operate independently, they have limited day-to-day interaction with each other.

These models can be utilized as a starting point to decide how to organize the people analytics capability for success. Depending on the needs of the business, some models will be a better fit. 

Choosing the right operating model: 5 questions to answer

Before choosing which operating model is the best fit for your organization, there are key questions to ask to help you in your decision: 

1. Scope of people analytics

What problem is people analytics aiming to solve?

Various models may be applicable based on how analytics is defined in relation to the business and people strategy. A narrow, consistent, and specific scope is typically associated with a centralized hub and front-back design. On the other hand, a hub-and-spoke and federated model can incorporate a broader and more diverse scope.

2. Proximity to business

How closely integrated into business does people analytics need to be?

Federated models are closely integrated into the business, while a centralized hub operates at a greater distance and relies on the interpretation of services by other parties. Hub-and-spoke and front-back designs aim to strike a balance between proximity to the business and expertise. However, they present challenges in terms of managing priority and resource allocation.

Besides building an operating model, businesses need to decide where people analytics should sit within the organization – is it going to be within the HR or part of an overall Analytics Center of Excellence (CoE)?

3. Stakeholder Identification

Who will benefit most from people analytics?

Centralized hubs primarily focus on a narrow group of stakeholders with similar needs. On the other hand, Federated designs cater to diverse stakeholders with vastly different needs. 

The hub-and-spoke model addresses the requirements of a diverse audience with varying needs, while a front-back model allows for some degree of differentiation. It is important to note that in this model, the more consistent the needs are, the higher the efficiency.

4. Current maturity of analytics

What is the current level of maturity of analytics in the business?

Federated and front-back models are more effective when there is an existing analytics understanding and maturity in the organization. If people analytics is not well grasped in the business, the centralized or hub and spoke designs offer a better alternative. These designs allow expertise to be incubated collectively before being implemented throughout the business.

5. Access to resources

How extensive is the investment in people analytics?

The centralized hub and hub-and-spoke model prioritize efficiency and, when effectively managed, can offer cost-effectiveness. These models are designed to share resources, allowing for leveraging investments at a lower price point.

On the other hand, federated models require substantial investment to implement and maintain.  This model intentionally duplicates functions where it makes sense to do so. As such, it can become cost-intensive over time, as multiple investments are needed to ensure optimal functionality.

Wrapping up

To effectively leverage value from people analytics investments, it is crucial to have a well-aligned operating model. Without the right operating model, organizations may face challenges in creating data-driven cultures that contribute to their success.

The post 4 People Analytics Operating Models To Implement appeared first on AIHR.