From the ground up: Building an HR infrastructure to support future growth

From the ground up: Building an HR infrastructure to support future growth


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From the ground up is a collection of indispensable HR transformation articles created to help companies understand the trends and challenges of HR transformation, so they can choose the right path and avoid the pitfalls.



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Publié le 01 janvier 2009
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From the ground up
Building an HR
infrastructure to support
future growth No matter where you are in the
transformation process – or what your
transformation goals might be –
Deloitte is here to help.
2Dear reader,
HR transformation as a discipline has shared services and HR outsourcing. There’s
evolved considerably over the last decade. more to both than meets the eye. For
Traditionally, mature HR functions have instance, shared services isn’t as simple
focused on improving operating efficiency as consolidating all activities to a central
and administrative effectiveness. Today, such location. Nor is HR outsourcing only a matter
improvements are merely table stakes. of choosing a vendor and signing a contract.
The articles in this section offer a deeper look
To really make a difference, HR must develop at the challenges of shared services and HR
advanced capabilities that facilitate business outsourcing so that a company can make sure
growth and operational excellence. This means their efforts deliver the results they are seeking.
tightly aligning HR’s structure and services
with the needs of the business in areas such The practical realities section offers highly
as: workforce planning, global mobility, new focused insights to help companies get more
market entry, merger integration, and talent value from HR transformation. Topics include:
management. Advanced HR capabilities such How to get managers and employees to use
as these enable an organization to execute its HR self-service tools. When to use a merger as
business strategy more effectively and improve a springboard for transforming HR. And how
performance across the entire enterprise to transform an organization to capitalize on
— not just within the HR function, as was opportunities in the services business. In many
traditionally the case. This compendium of cases, these types of subtle HR transformation
HR transformation articles was created to issues can spell the difference between success
help companies understand the trends and and failure.
challenges of HR transformation, so they can
The insights in this compendium are based on choose the right path and avoid the pitfalls.
Deloitte’s unmatched experience helping many These articles were specifically selected to
of the world’s leading companies transform provide insight to executive, operational,
their HR operations and capabilities. No matter and project staff alike. To that end, they have
where you are in the transformation process — been grouped into three broad categories:
or what your transformation goals might be —
The strategy section examines HR’s ongoing Deloitte is here to help.
evolution from administrative function to
strategic business partner. Articles in this
group offer a useful mix of survey data,
transformation methodologies, service delivery
models, and practical tips to help companies
Margot Thommake informed decisions when developing a
Global Practice Leadervision and strategy for transforming HR.
HR Transformation
The options section discusses two common +1 416 874 3198
elements of HR transformation initiatives —
3Table of contents
8 HR transformation survey: A case for business-driven HR
A survey of more than 150 global companies to understand what they are doing to
transform the HR function and improve HR’s strategic contribution to the business.
14 Global mobility: A pivotal talent and bottom-line issue for growing companies
A survey of 130 companies to understand what they are doing to improve their ability to
deploy talent across borders quickly and efficiently.
22 Global HR transformation
How HR transformation has evolved from reducing the cost of HR administration to
improving HR’s ability to support a company’s overall strategy and help the business excel.
40 Maximizing workforce potential: Team for success
A new and comprehensive model for delivering HR services.
48 HR that means business: Focusing on value creation
How HR can use transformation to support the strategic needs of the business and help the
company grow.
58 Who’s counting? How to manage resources globally with effective HR
information systems
The need for a global HR Management System, and how to build it.
62 Fulfilling the promise: Five steps to help the HR business partner role deliver
its full potential
How HR can establish the capabilities and credibility to serve the business as true strategic
68 Taking HR to the next level: A structured approach to developing and executing
an effective HR strategy
A 10-step approach to designing and executing an effective HR strategy.
Shared services deployment: The rubber meets the road 92
How to take HR shared services from concept to reality.
Factoring internal talent needs during the HRO transition 118
Understanding the HR skills and talent that are needed when outsourcing HR.
120 Tackling the forgotten projects
Tips for harmonizing HR policies and designing retained HR processes when making the
transition to HR outsourcing.
Making HR business process outsourcing work 122
A detailed and comprehensive look at the key steps to outsourcing HR.
Practical realities
Build it, but will they come? 144
How to get managers and employees to use and embrace HR self-service tools.
Seven strategies to help your service transformation 146
Transforming an organization to capitalize on the revenue and growth opportunities in the
services business.
Avoiding the services fallacy: If we build them, value will come 166
How to overcome the primary obstacles to building an effective services business.
172 Beyond HR integration: Is a merger the right time to launch a transformation?
Using a merger as the catalyst for transforming the HR function.
The hidden challenges of human resources outsourcing implementation 184
A comprehensive look at the key activities involved in outsourcing HR.
194 Who we are
Author biographies
56HR Transformation
StrategyHR transformation survey
A case for business-driven HR
A survey of more than 150 of the world’s largest companies conducted by Deloitte Consulting LLP
By Robin Lissak, Richard Kleinert, Mike Boedewig, Alice Kwan, Tim Phoenix, and Jeffrey Alderton

Deloitte Consulting LLP (Deloitte Consulting) Key findings
conducted a survey on HR transformation to The Deloitte Consulting survey of global
better understand if and how some of our companies highlights the fact that
largest clients are bringing HR into the 21st HR transformation is very much top of
century. It’s no secret that people issues are at mind for C-suite executives. More than 84
the forefront of the CEO and Board agendas. percent of respondents are either currently
Some of those drivers include the talent crisis, transforming HR or are planning to do so.
global workforce challenges, leadership
development, and risk threats. Deloitte Consulting At the same time, when asked to identify the
surveyed more than 150 global companies, current business drivers for HR transformation,
each with more than $2 billion in revenue. the overwhelming majority of respondents,
85 percent, cited cost savings or efficiency
Overwhelmingly, the majority of respondents — the traditional hallmarks of the HR
are currently involved in HR transformation. function. This suggests that most companies
At the same time, most respondents have a are focused on cost savings in an area that
very modest and traditional view of what accounts for less than 1 percent of corporate
HR transformation means. We find that revenue, rather than on determining how HR
to be alarming. To most respondents, HR can help support business strategy.
transformation is still about systems and
processes. The business drivers are still cost As they have in the past, in our experience
savings and effectiveness. These are not “bad” most HR improvement programs still centre
or unimportant drivers; they are merely on tactical initiatives, such as standardization,
solutions in a vacuum. Transformation — system implementation, and HR
despite the urgency, the competitive imperative, organizational restructuring. (Figure 1.)
or the call to action from the C-suite — is still
occurring slowly and is not occurring in the Very few respondents indicated they are
context of supporting a business strategy or transforming HR so that it can become
helping a company meet its business objectives. a strategic business “partner” within the
Never before has there been more pressure company. Only 35 percent cite building
on or opportunity for HR to step up. How HR HR capability as a transformation driver, and
addresses transformation is pivotal.
8 Strategy HR transformation surveyleaders in particular, want the HR function to
Figure 1. Focus of HR improvements
become a strategic business “partner” within
the company.66.0%Standardize HR
When asked about future concerns, significant Implement IT 57.7%
platform numbers of respondents cited the need for
Restructure the HR function to address emerging strategic 45.4%
HR function
business issues. We see this as a call to action
Change HR for HR.29.9%
Upgrade HR staff/ 29.9% Outsourcing and transformation
build capability
How can HR functions that want to play a
18.6%Other more strategic role prepare themselves to
become a true business “partner” within the
0% 20% 40% 60% 80% company? One strategy is to outsource
HR administrative activities while retaining
HR’s strategic capabilities in-house.
even fewer (30 percent) said transformation is
driven by the need to free HR to undertake a
Forty percent of the respondents that are
more strategic role. One could look at this data
transforming HR have outsourced or are
and argue that while a majority of respondents
planning to look at HR outsourcing as a key
take a traditional view of transformation, some
strategy for delivering HR services. This is an
enlightened companies are focused on creating
increase of 15 percent from the current base
competitive advantage through HR. We would
of companies looking at or outsourcing
need to see if this is an emerging trend through
HR operations today. We are concerned about
future surveys. (Figure 2.)
the market’s capability to support such a large
increase in sales and delivery activities.
At the same time, when they look to the
future, C-suite executives in general, and HR
The activities that are by far the most likely to
be outsourced are routine administrative
operations. At the same time, however, the Figure 2. Key drivers of HR transformation
survey shows that some respondents may be
Efficiency - planning to outsource strategic HR activities, 84.6%
HR cost
such as training and development, recruiting
and staffing, compliance talent management, Effectiveness - 75.4%
service and global mobility. The market for these new
and emerging HR services is less developed Build HR 35.4%
capability than the traditional core HR services areas and
presents more risk to buyers. (Figure 3.)Free HR for 30.0%
strategic work
The key factors involved in the decision-making
process were business case (32 percent),
industry/peer benchmarking (19 percent), and
technology/capability analysis (14 percent).
0% 20% 40% 60% 80% 100%
Strategy HR transformation survey 9Figure 3. HR activities most likely to be outsourced Who makes the decision and how?
Corporate or global leadership drives the
Compensation/ 93.9% majority (84 percent) of transformation benefits
initiatives. Moreover, among the surveyed Basic HR
93.9%administration respondents, 71 percent said the CHRO is the
primary sponsor for HR transformation. This
Shared service 87.9%
centre operations indicates that CEOs are empowering CHROs
to bring HR into the 21st century and are
87.9%HRIS asking the CHRO to take responsibility for
business-HR alignment. Finally, while 56
84.8%Payroll percent of HR transformations are stand-
alone efforts driven by HR, a large minority Training and
42.4%Development (44 percent) are part of a larger corporate
change effort.
What the future may hold
36.4% StrategicCompliance It appears that the future may hold more
of the same. According to the survey, only Talent 27.3%
management 40 percent of respondents have structured
processes for future HR planning. This is
21.2%Global mobility
clearly an area that needs improvement. HR
cannot support business strategy without a 12.1%Employee relations
formal mechanism to solidify this alignment.
0% 20% 40% 60% 80% 100% Seventy percent of those surveyed identified
“Improving HR Services” as their primary
Transformation triggers goal, while 59 percent identified “Improving
Survey results indicate that most HR Technology.” There are some areas
transformation efforts are more likely to be of hope. A small but growing number of
launched in response to specific business respondents identified the key business
events, rather than as part of a strategic plan. issues that they need to support in order to
support business strategy. We see this as an
Three business events trigger more than indication that business-HR alignment is an
50 percent of the initiatives to transform HR. emerging and important business issue and
The most common is the arrival of a new CEO that business-driven HR may be the wave of
or CHRO. Corporate restructuring (e.g., cost the future. (Figure 5.)
reduction) is a close second, followed by a
merger or acquisition. (Figure 4.)
Figure 4. Primary triggers for improving HR
24.6%New executive
Corporate 22.3%
Merger &
0% 10% 20% 30%
10 Strategy HR transformation survey