The HR Organization of the Future – Becoming an Agile HR Organization


In the first installment of this two-part series, we began exploring how the four foundational pillars of HR service delivery – people, process, technology and governance – can be used to optimize the employee experience. In this article, we will explore how HR organizations are building on the people and governance pillars to become more Agile.

Before we start discussing how HR can become more Agile, we should address what it means to be Agile. Agile operating methods emphasize interaction, collaboration and rapid response to change. Agile represents a shift away from traditional top-down planning and waterfall project management practices, and toward continuous innovation and delivery. It is a collaborative way of working, with a propensity toward action so organizations can quickly introduce, adjust and iterate as they work to solve a problem or improve a process.

For an organization to adopt Agile methodology, it must empower its employees to apply Agile project management methods that embrace change, failure and correction throughout the process. It must accept repeated failure as a means to achieving success. This is a dramatically different and initially uncomfortable way of working for many HR organizations, which typically use engrained project management practices and methodologies. Because of this initial discomfort, organizations may choose to be selective in when and how they first introduce Agile methods.

HR has seen early successes with Agile methodologies as part of enterprise-wide adoption in tech firms and start-ups, where the culture and environment lend themselves to a more customer-driven, iterative approach. Other organizations that don’t have that “start-up” mentality may begin in areas like talent acquisition, where processes can be broken down into logical stages that can be aligned and tailored to specific groups or geographic segments. Wherever an organization chooses to begin, once they get used to Agile ways of working, it can spur swift action toward a solution or change. 

Reskilling Key HR Resources

One of the key ways an organization can begin infusing Agile methods into its HR operating model is by creating Agile resource pools – teams of HR business partners tasked with identifying processes and functional areas that lend themselves to an iterative way of operating. These teams will not specialize in a particular area of HR, but rather, they will be made up of HR professionals who are skilled in Agile ways of operating and can apply their skills across different projects, processes and functional areas. 

Creating these teams and managing the necessary technologies and automation will require new skills. HR resources may need to invest in ways they can improve their analytical thinking, coaching, design thinking and influencing. This will require a thoughtful and deliberate approach. In the past, when we’ve seen organizations attempt to reskill HR business partners, they’ve simply renamed HR generalists as “HR Business Partners” and expected the individuals in the new roles to adopt the skillset needed to operate as a strategic partner to the business without providing them the training they need to succeed. Of course, renaming does not equate to reskilling.

This reskilling effort must be a true transformation of key roles and a deliberate campaign to equip individuals with the skills they need to operate in an Agile and digital HR organization. The technology and people pillars we discussed here also enable this effort, encouraging HR to tap into learning experience platforms to support the reskilling of key HR roles.

Establishing Strong Governance

As with Agile, applying different delivery approaches in different areas of HR will influence future decisions around sourcing. While outsourcing will continue to be the prevalent delivery model in tried-and-true areas, such as benefits administration, broad, large-scale sourcing deals are becoming less common. Hybrid models that combine internal shared services and outsourcing are gaining adherents.

We are seeing organizations use a more selective approach to outsourcing, using it only where it adds the most value or addresses an internal skill gap. Take application management support (AMS), for example. Organizations are turning to service providers for specialized technical support after they have migrated to new HCM platforms, rather than trying to build these capabilities internally. At the same time, organizations are beginning to move some of the more functional “Tier 2” activities back in house as they develop capabilities in this area after a few years of operating their HCM platforms. 

Governance is the glue that holds the Agile HR organization together. A cohesive governance structure is critical to getting everything humming as HR introduces new tools, technology, skills and ways of working into the operating model. A solid governance framework will align strategic and operational activities and metrics to empower decision-making that balances business needs, technology investments and operational efficiency. It will also position the organization to optimize technology investments, improve the user experience and align on a vision for HR service delivery that optimizes Agile teams and outsourced providers.

As organizations realize their technology roadmaps around experience suites and cloud ERP, strong alignment between HR, Finance and IT will be critical to measuring the ROI on these technology investments and capitalizing on the available data. Additionally, increased access to more and better data will help leaders measure the things that matter most to them, such as employee experience, talent attraction and retention, and the success of diversity and inclusion initiatives.

As we discussed here, optimizing the employee experience, designing end-to-end processes and developing robust analytics are foundational to the HR organization of the future. Building from there, as organizations tackle reskilling efforts and establish strong governance, they will be well positioned to succeed as a strategic and Agile HR organization. 

Is your company on its way to building the HR organization of the future? Contact us to discuss how ISG can help your organization develop an HR strategy for thriving in the “new normal.”