Agile HR: Evolving HR Practices

How can you build agile capabilities in your HR organization?

by Angela Goodwin and Justin Williams

Photo by cottonbro from Pexels

In our previous article, Agile HR: Fad or Future, we explored the forces driving the need for an agile HR. There’s no doubt that it’s here to stay and not just a passing fad. Let’s now focus on what HR can do to create and grow its agile capabilities.

We’ll start with what we mean by agile HR. At its core, agile HR means:

• Focusing on HR’s customers (employees, managers, leaders) and putting the employee experience first.
• Proactively adapting and evolving HR services to solve people-related business challenges.
• Having a growth mindset and looking for ways to continuously improve.
• Leveraging people data and analytics to anticipate business needs, guide solution development, and measure outcomes.

Below are a few areas where leading HR organizations are investing to evolve to a more agile HR model.

• Focus on the employee experience: Using the methodology that marketing and product organizations have used to place the customer at the center of their design, leading HR teams are employing capabilities to better understand and meet the needs of its customers. They leverage techniques like value stream mapping, journey maps, and lean processes to focus HR service delivery on the employee lifecycle and continually improve the products and services provided. The intent is to maximize the value of HR services from a customer perspective focusing on things such as ease, speed, consistency, and cost.
• People analytics: The availability of robust data analytics and visualization platforms means HR teams can move beyond providing backward-looking reporting and data in static formats. Today’s analytics tools enable HR teams to deliver insights to the business that not only assess and measure the impact of prior actions, but that predict the impact that people-related actions will have and therefore better influence business decision making. Leading HR teams equip managers and leaders with proactive data and trend analysis, and provide real-time, configurable reports that allow people and business leaders to make decisions that are based upon data rather than hunches or prior experience.
• Evolve the HRBP role: Where leading HR teams have an established HRBP role in place, we see a narrowing of their focus so that they are able to concentrate the bulk of their attention on the strategic talent needs of the business (e.g., workforce planning, talent acquisition, leadership development, succession planning, etc.). Agile HR teams are moving away from the initial HRBP role that covered a wide array of HR services (e.g., policy interpretation and guidance, employee/labor relations, disciplinary and grievance support, etc.). Instead, these HR teams are elevating this role to focus on the strategic talent challenges of the business and delivering a wider array of services through its HR Operations capability.
• Flexible Communities of Excellence: Agile HR teams are reimagining their ‘Centers of Excellence (CoE)’ teams and instead becoming more flexible ‘Communities of Excellence.’ While this may seem like nuance, it’s not. Traditional Centers of Excellence were often static teams responsible for developing and disseminating practices from the center, outwards to the business. This often resulted in the perception (rightly or wrongly) that the CoEs knew best and that the business needed to adopt whatever those CoEs rolled out. The Communities of Excellence model adopts a view of partnership with the business to achieve target outcomes. The CoEs are still deep subject matter experts in their field, but there is an increased level of collaboration between the CoEs and the business to ensure the right outcomes are achieved. In addition, these new CoEs often augment their FTE resources with external and contract skills as needed in order to flex their capabilities based upon business priorities.
• Expanded HR Operations: Agile HR teams are expanding beyond their traditional HR Shared Services role and adopting a wider HR Operations capability. New HR tools such as automation and expanded ESS/MSS functionality allow this HR function to venture beyond basic transactional and inquiry support and provide a wider range of services (e.g., HR technology enhancement, people analytics and intelligence, employee/labor relations, talent acquisition support, learning and development support, etc.). In agile HR teams, the HR Operations function expands its capabilities beyond efficient and consistent transactional support and begins to offer more ‘back office’ support for strategic business services.
• HR Transformation Team: While the reimagined HRBP, CoE, and HR Operations teams all create the capability to deliver agile HR and continuous incremental improvement, delivering rapid transformational change still remains elusive under the traditional HRBP model. For this reason, it is critical for agile HR teams to have a group of resources dedicated to transformational programs and projects that solve emerging people-related business challenges. The HR Transformation team is a group of experienced HR delivery experts responsible for developing, implementing, and transitioning programs/projects to BAU (business-as-usual). They typically adopt a product team structure where they are identified and established to realize a transformational effort or set of efforts. The membership of the team to deliver the transformation will vary depending upon skill sets required and the team disbands to focus on other transformational efforts once the pre-agreed outcomes are achieved and the change is transitioned to BAU.
• Adaptive HR: Agile HR teams adopt a less rigid view of their team structure. While HRBPs (or similar roles) continue to rely upon static HR resource that develops a deep understanding of the business and its strategic goals, other HR roles and team structures are more fluid. For instance, HR CoEs may leverage external contract resource to respond to specific skill set needs to address delivery peaks. HR Transformation team members may flex their involvement on delivery teams based upon business needs and priorities. CoE and HR Operations team members may transfer between functions to respond to a particular business challenge. The point of all of this — HR needs to be ready and able to adapt its workforce, structure, and capabilities based upon the changing needs of the business.
• Adaptive organizational design: While HR needs to be more fluid, so too do they need to facilitate adaptability in business teams. Rigid hierarchical structures are dissolving away, replaced with cross-functional teams. These cross-functional teams live for the product and customer they serve. As business needs change and investment shifts between products, business leaders need the ability to quickly shift resources. This is giving rise to internal talent marketplaces to improve internal mobility.
• Performance management: HR should know better than any other function, if you want to encourage a particular behavior, make sure that you recognize and potentially reward that behavior as close as possible to the time it occurred. At its heart, being agile is about trying something, learning from that experience, making incremental improvements, and then repeating that cycle indefinitely. It is about never being satisfied with the status quo and constantly striving for better. It is about trust of those with whom you work that the performance feedback received is meant to drive improved results rather than to inform an annual performance rating. When it comes to performance management, the same principle applies. Instead of time-intensive, documentation-heavy, annual performance management practices, agile teams need to adapt a lighter and more frequent performance feedback loops. Agile teams create and rely upon a steady stream of team/360-degree feedback that prioritizes frequent face-to-face ‘light touch’ interaction over detailed documentation. While simple in concept, this is frequently challenging to implement as people often have difficulty letting go of processes and experiences associated with prior performance management practices.
• Compensation: Closely aligned to performance management practices, it is important to link any performance-based compensation changes as close as possible to the event that you want to incentivize. If an organization wants to create a more agile team, then its reward and recognition practices should also promote agility. Traditional annual or semi-annual compensation review processes run contrary to agile principles. If you want your team to constantly reflect upon their work, objectively review and measure the outcomes achieved, and then continuously iterate their practices to improve the outcomes, you wouldn’t ask them to do it once or twice a year. The same is true with compensation. If you want to incentivize continuous improvement, you need to incentivize continuously. This often means removing annual raises and replacing them with more outcome-driven increases, and/or reducing the size of annual bonuses but providing more frequent and smaller bonuses tied to specific near-term performance metrics.

A call to action

Evolving your organization’s HR capabilities to become more agile and in tune with rapidly changing business requirements is not a ‘nice to have’. It is a strategic imperative. The risk is not the business’ appetite for greater agile HR service delivery. The need is already here and only showing signs of increasing. The risk is that HR is unprepared or unable to provide the agile HR service delivery that the business needs to compete and win.

The question is: Does your organization have an agile HR function that is capable of rapidly adapting to the needs of the business as those needs change?

To learn more, reach out to Slalom Orange County Business Advisory Services at slalomocbas@slalom.com

Slalom is a global consulting firm focused on strategy, technology and business transformation. Learn more and reach out today.