Creating HR Service Delivery Success: HRO Today Forum Europe 2012

Creating HR Service Delivery
Success
HRO Today Forum Europe 2012
By Brad McCaw, Senior Consultant, London
2012 Towers Watson. All rights reserved.

Setting the context
l Businesses are going through significant change

l It has never been more critical that HR be highly effective at
supporting business changes while simultaneously reducing its
cost base
l Despite strenuous efforts, HR needs to make a more fundamental shift
l HR technology continues to shift towards SaaS (Software-as-a-Service)
l HR in the future must be more transformative to keep up with
changing business needs
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Understanding the requirements of the HR function
requires starting with business and talent strategies
Business Strategy
Talent Strategy
HR Function and Service Delivery Strategies
HR Structure HR Talent HR Process HR Technology
Governance, Measurement, PMO and Project Management,

Change Management and Communications
Main trends in HR service delivery 2012
HR is in restructuring mode to be more efficient and cost-effective:

1 Matrix relationships provide a governance tool while still serving business unit
and geographic needs
Shared services is viewed as the key to success for HR organizations

2 looking to meet efficiency and cost-saving objectives
Talent systems remain the top HR service delivery issue, and SaaS
3
solutions are viewed as the most effective
HR technology spending remains steady with a mix of enhanced

4 functionality, upgrades and new implementations and the HRMS market
continues to shift toward SaaS
3
2012 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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The prevailing HR model has four components, each of
which contributes to an efficient and effective function
HR Business Centers of
Partners Expertise
HR
Leadership
Team
HR Shared
Services
though the model has its challenges
Emerging Issues
Emerging Issues l Can the COEs actually

provide best practice
l Do business partners have the expertise at a market-
capabilities needed competitive price?
l To be credible advisors to the l Do COEs respond to
business? business need (or do they
l To equip line managers with HR Centers of still operate from their ivory
the required skill and will? Business tower)?
l Do Business Partners forsake Expertise l Do COEs build integrated,
the enterprise agenda for
Partners holistic solutions to business
local/business agenda? problems (or do they still
l Do Business Partners really HR think in silos)?
collaborate with the rest of HR? Leadership
Team Emerging Issues
l How effective is HR Leadership at

Emerging Issues building a coherent HR agenda for the
whole enterprise and managing to it?
l Is there an appropriate balance between cost l Is there real cooperation and trust
and quality? Is there enough of a focus on between all parts of the model?
continuous improvement? l Is there sufficient flexibility of HR
l Does HR Shared Services still do things that HR Shared resources to staff projects effectively
are more appropriately owned by the line and (without having captive resources)?
employees (e.g. completion of performance
Services
reviews, checking employee licenses are
updated)?
l Does HR Shared Services have operational
excellence, customer focus and vendor
management as core competencies?
The stage is set for something new in HR and that
something new will need to meet diverse needs
HR meeting the The diverse needs

needs of different businesses at Mature vs. emerging markets
different life stages Rapid growth vs. steady state
Focus on market share vs. focus on profitability
needs of different leadership styles Articulate in workforce and talent-related issues;
and preferences hands-on
Uncomfortable with people-related side of
business; delegates
Lead by making tough decision vs. lead by
building consensus
needs of different leadership Delivering results for my P&L vs. shareholder
performance measures/goals return
Understanding the unique burdens that
corporate overhead places on my business
different priorities of different parts Scaling up quickly in new market
of the organization Preparing for retirement cliff
Adjusting to work shifting offshore
Five principles underpinning leading HR functions
Establishing a formal, explicitly defined model that drives personal accountability
Governance Making the model truly cross-functional, integrating across programs and COEs
Allowing for segment-driven measurement and risk compliance
Establishing a dedicated function for analytics
Structure/Role Making COEs smaller, with a more consultative focus
Segmenting service delivery on the basis of business value and performance
Developing the capability to use data to drive decision-making for the business
Capability Sourcing HR talent with cross-functional knowledge
Leveraging and deploying mobile HR resources globally across the enterprise
Having the systems to support workforce analytics and demand management
Technology Integrating systems across functions to enable enterprise-wide solutions
Increasingly utilizing emerging technologies (i.e., SaaS, mobile devices)
Having clearly defined processes for delivering meaningful data to the business
Process Ensuring compliance with standard procedures to leverage risk appropriately
Allowing for configuration of processes by service delivery segment
Transformative HR
l Programs and service delivery segmented l Focus on global deployment
by impact on business performance and l Processes in place to leverage risk
organized around outcomes l Formal, explicitly defined governance model
l HR programs and resources are dictated l Deep analytical capabilities to enable data-
by demand driven decisions
l Few permanent HR resources l Measurement of HR programs drives
l Neither responsible nor accountable for continuous improvement
transactions
l Likely requires significant changes,

including realignment of the HR org
l Flexible and scalable, service design, reengineering of HR
delivery is segmented by businesses processes, redefining roles and enhancing
C
HR capabilities
I
to meet discreet business needs
l Enhanced measurement and risk l May require a total reorganizational
leverage tailored by segment transformation in support of new
strategic direction
l Focused on enabling line managers
to produce great results l Letting go of administration often
challenging for HR professionals
l Requires HR to fully abandon traditional
alignment and functional areas
Transformative HR functions will look like this
Sister
Business HR Function Function
Business Business Business CFO
Head of CIO
Human Resources
The business uses logic- COO
driven analytics to
determine the services
Business Business Business required and create
Partner Partner Partner demand for HR
Human Capital Human Capital

Dotted-line/solid-line Human Capital Human Capital HR Shared
Head of Solutions Solutions
reporting relationships Solutions Solutions Services
Resourcing High Hourly
change depending on Executives Line Managers Function
Potentials Employees
involvement in HR
initiatives
Contract Contract Contract Contract

Expert Expert Expert Expert
Brand managers:
Understand full life-cycle
Engage external providers
of employee segments
Consulting skill set Optimizing the portfolio to bring functional
and HR services
(issue identification > (i.e., funding) of possible expertise as needed
required; create policy
and manage exceptions problem-solving) HR investments
Business Support Resources
Business support resources are pulled in from throughout the

organization as needed for HR projects and initiatives
While we still believe that the traditional three-circle model can
be effective, usage of self-service must move to the forefront
Prevailing Model Transformative Model
Governance
Transactional
HR Business Centers of
Partners Expertise Self Shared
Service Services
HR
Leadership
Team
HR
Decentralized Centralized
Leadership
Consultative
HR Centers
Business of
Partners Expertise
HR Shared
Services
Governance
Illustrative COE model
CHRO
Total Talent Learning & Organization Integration Risk &

Specialist Areas
Rewards Acquisition Development Effectiveness & Synergy Analytics
Executive Compensation Talent Training Org Design

Leadership Benefits Performance Career Employee
Talent Mapping Engagement
Networks Acquisition M&A
High Operational
Excellence
Potentials
Key considerations
l Centrally owned: Reports directly into HR
l Globally deployed: Regional deployment of specialist resources in major region
l Use of third parties for standard offerings
l Flexible pool of resources: forming and reforming based on business needs
Focus on the Business Partner Role
Business Partners as
Account Managers to the
business
Yet
Integrated with HR service
center, COEs and HRLT
Key considerations
l Consultative services in dotted or solid-line relationships
l Articulates business needs to HR (all groups)
l Role supports executives / managers in their role of being the front-line people
managers
l Transactional work to Service Center
l Very focused investment of time in maximum ROI areas
Overview of key changes of the future HR Shared
Services
l Focus on self-service knowledge-based tools
Technology l Mobile device enabled, interactive and intuitive technology
l Personalized knowledge- and database
l No Tier 1: HR Shared Services handles only more complex, escalated issues

Organization, Roles l Network of virtual HR Service (formerly Tier 2) team
and Competencies l Service management mindset
l Direct reporting line to CFO/CIO/COO
l HR retains influence over Shared Services through governance rather than

reporting line
Governance l Core and differentiated services
l Personal authority
l Differentiated services for groups where it achieves a strategic objective

Services, Sourcing
l Paperless end-to-end processes, unless required by regulation
and Metrics
l Focus on customer service metrics
l Network of SMEs at Tier 2 that focus on improvement across the globe (e.g.,
performance management for all)
Globalization
l Local knowledge and language requirements met through technology and
network of virtual HR Service team
Implications for HR Shared Services: Structure
Business Services ILLUSTRATIVE
CFO/
CIO/
COO
Service Finance Service

HR Service Area
Management Area
Director
Director Director
Employee AP
Lifecycle
Portfolio
Management
Continuous Improvement
Vendor Managemenet
Service Employee
AR
Deployment
e-Generalist
Integration
Employee
Experience Employee .
Development
Project and Resource
Management
Employee
Separation
Structure and process Reasons for changing current
HR Structure
Do You Anticipate Changing Your
Current HR Structure in 2012 or 2013? Reasons for Changing Current HR Structure
No changes Yes
anticipated 44%
56%
n = 612
Structure and process Anticipated changes to HR
structure
Anticipated Changes to HR Structure in 2012 or 2013
Base: those anticipating making a change n = 271
Structure and process Delivery model features
Does Current or Soon-to-be-Implemented Delivery
Model Include the Following Features?
l Some key tenants of

Transformative HR structures
already exist in the
marketplace
l We project increased usage
of communities of interest
and shared resource pools in
2012 and 2013
Large organizational change must address more than
just technology (or process, or structure)
People Process Technology
l How will we organize? l What services do we offer? l How will we deal with employee-
l How will we staff? l How will we increase operational facing access?
l What competencies will be effectiveness, customer l What tools will we use?
required? satisfaction and financial l Data capture
l How will we manage the change? performance? l Knowledge management
l How will we communicate the l What management updates will we l Case management
changes? need? How will we provide this? l Transaction processing
l What governance structure will we l How will we bill for services? l How will we handle employee data
use? l What service-level agreements will and back-end processing?
we have and with whom?
l How will I manage the new organization?

Governance l How will I ensure data privacy?
l How do I maintain proper audit trails?
l What services are core vs. context?

Sourcing l Are there better sourcing alternatives that will help us meet our business objectives? At what cost?
l Are there sourcing technologies or services that we can implement better, faster, cheaper?
l What differentiates my organization from others?

l How do we want to be perceived by internal and external stakeholders?
Culture l How do we want to interact with our employees and retirees?
l What are cultural barriers to changes in HR Service Delivery that will need to be addressed?
How have other organisations tackled this?
l Activities generally follow this order

1. Service delivery outline
2. Process optimization
3. Role change
4. Technology enablement
5. Organizational redesign
6. Continuous improvement
What have your experiences been?
Illustrative implementation roadmap: Transformative HR
Configuring the Future-State HR Organization
Detailed Design HRSS Determine Staffing Strategy Staff HRSS Phase 1 Staff HRSS Phase 2
Activities include: Activities include: Activities include: Activities include:
l Appoint leader l Conduct gap analysis (numbers and l Assess, select and deploy l Assess, select and
l Define services and work allocation capabilities) HR Shared Services staff deploy HRSS staff
l Determine outsourcing opportunity l Develop approach to assessment, l Onboard staff to new l Onboard staff to new
l Design team structure development, selection and transition positions positions
l Define and evaluate jobs l Develop reward and retention strategy l Establish services l Establish services
l Determine headcount and cost l Apply competency framework to new Phase 1 Phase 3
l Define governance process positions l Establish governance
process
Detailed Design COEs Establish COEs Build HR capability

Activities include, for each area: Activities include: Activities include:
l Appoint leader l Assess, select and deploy l Assess talent
l Define services and work allocation specialists l Conduct gap analysis with capability requirements
l Design team structure l Onboard staff to new positions l Design development programs
l Define and evaluate jobs l Establish services l Prepare individual development plans
l Determine headcount and cost l Establish governance process l Deliver learning interventions
l Define governance process
Detailed Design HRBP Establish HR Business Partners Redeploy HR Resources

Activities include: Activities include: Activities include:
l Appoint Senior Business Partners l Assess, select and deploy l Redeploy or remove resources according to phased
l Define roles Business Partners headcount plan
l Define deployment principles for l Onboard staff to new positions l Prepare severance packages
Business Partners l Establish governance process
l Design team structure
l Define and evaluate jobs
l Determine headcount and cost
l Define governance process
Project and Change Management
Questions
Brad McCaw
brad.mccaw@towerswatson.com
+44 (0) 20 7170 2136

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Creating HR Service Delivery

By Brad McCaw, Senior Consultant, London

2012 Towers Watson. All rights reserved.

l Businesses are going through significant change

HR Function and Service Delivery Strategies

HR Structure HR Talent HR Process HR Technology

Governance, Measurement, PMO and Project Management,

HR is in restructuring mode to be more efficient and cost-effective:

Shared services is viewed as the key to success for HR organizations

HR technology spending remains steady with a mix of enhanced

Emerging Issues l Can the COEs actually

l How effective is HR Leadership at

HR meeting the The diverse needs

Allowing for segment-driven measurement and risk compliance

Establishing a dedicated function for analytics

Structure/Role Making COEs smaller, with a more consultative focus

Segmenting service delivery on the basis of business value and performance

Capability Sourcing HR talent with cross-functional knowledge

Leveraging and deploying mobile HR resources globally across the enterprise

Having the systems to support workforce analytics and demand management

Technology Integrating systems across functions to enable enterprise-wide solutions

Increasingly utilizing emerging technologies (i.e., SaaS, mobile devices)

Process Ensuring compliance with standard procedures to leverage risk appropriately

Allowing for configuration of processes by service delivery segment

l Likely requires significant changes,

Human Capital Human Capital

Contract Contract Contract Contract

Business Support Resources

Business support resources are pulled in from throughout the

Prevailing Model Transformative Model

Total Talent Learning & Organization Integration Risk &

Executive Compensation Talent Training Org Design

l No Tier 1: HR Shared Services handles only more complex, escalated issues

l HR retains influence over Shared Services through governance rather than

l Differentiated services for groups where it achieves a strategic objective

Business Services ILLUSTRATIVE

Service Finance Service

Base: those anticipating making a change n = 271

l Some key tenants of

l How will I manage the new organization?

l What services are core vs. context?

l What differentiates my organization from others?

l Activities generally follow this order

What have your experiences been?

Detailed Design COEs Establish COEs Build HR capability

Detailed Design HRBP Establish HR Business Partners Redeploy HR Resources

Project and Change Management

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