A new approach to organizing Human Resources Management

The triple-pillar mode, based on Dave Ulrich‘s role model, has now become widely accepted as an HR business model, particularly in large companies. It consists of three core areas: the HR Business Partner, the Centre of Expertise, and the HR Service Centre.

However, there are still challenges for this model. In this respect, HRM should be more focused on strategic HR work and be able to encounter business on an equal footing. This presupposes that it is perceived by line management as an equal partner. There are also difficulties with regard to clearly defining the interfaces in processes, and in delineating the responsibilities between HR roles.

The basic idea of the HR network organization

The idea of the HR network organization is based on fully integrating supportive and formative HR functions in line departments, and in creating an active network between them. The network consists of “network experts” (NEx), who are coordinated and supported by a central “network partner” (NP).

The NEx are not HR specialists in the conventional sense, but employees from various line departments who take over an HR role for a certain period in addition to their specialized tasks. The central NP manages the network of NEx, and is responsible for comprehensive standardization, processes, and critical special cases.

HR network partners (NPs) and HR network experts (NEx)

Network Partners are experienced HR professionals who manage and develop the network of experts in the specialist departments. In medium-sized and large organizations, the role of NP must be divided among several people. These various NPs function like their own network of various competence centers, each responsible for the centrally managed tasks and running them in cooperation with the NEx.

For example, an NP is in charge of human resources development, i.e., is responsible for centrally-managed leadership development and for managing the company-wide process of talent development – which is, however, implemented in the decentralized individual business units by the Network Experts. The NP’s area of responsibility thus covers the entire HR process, and requires a great deal of knowledge in the respective specialist fields, but also a personality which, together with the NEx, enables persuading line managers and employees toward achieving their objectives.

The network experts remain under the disciplinary auspices of their original line supervisor; with regard to HR they are managed by the responsible network partner. The network expert’s core responsibilities include standardized processes, such as recruitment and onboarding, employee appraisals, personnel development, and resignations. For precedent-setting or special cases, a network partner is always involved.

Tasks that are carried out centrally or in the network

There are also tasks in the HR network organization that are carried out by network partners centrally, tasks that require in-depth knowledge and central management (e.g. compensation and benefits). The respective network partner bears the overall responsibility, and, together with management, develops the company’s overarching strategy in these matters. In the case of compensation and benefits, this means that the NP defines the total budget for salary increases and the guidelines for exception requests, while the network experts, together with the respective department managers, undertake implementation within the prescribed guidelines.

Certain standardized processes, such as payroll or mutations, as before will also be centrally established in so-called HR service centers. With regard to operational issues, the network experts work directly with the specialist units in the shared service center.

Success factors and management factors in an HR network organization

The success of such an HR organization stands or falls with the appropriate personalities. Both network partners and network experts especially need a high level of acceptance within the organization, but also the ability to influence without conventional powers. A critical prerequisite for success is clear regulation of competencies and responsibilities. Disciplined implementation of the standard HR processes is also essential, so that the overall quality level can be maintained.

Added to that is the need for management support via appropriate performance metrics (Key Performance Indicators, or KPIs). These enable the company to have improved operational and strategic personnel planning, which is becoming increasingly important. In order for personnel-related KPIs to have greater relevance, their format has to be adapted to the controlling or finance-based metrics.

Implementation in an HR network organization

Ideally, the personnel department, for example, based on feedback gathered regarding its reputation (such as an employee survey), will be the driving force behind the transformation in an HR network organization, and will persuade the executive management to shift HR responsibilities to the line departments.

The introduction of an HR network organization requires consistent rethinking, mainly due to replacement of the previous HR business partner role with a new network structure, whereby the accompanying change management plays a particularly important role. In addition to dialogue with the concerned line departments and their opinion leaders, intensive focus within HR on the new organizational model is necessary. The existing HR management should be responsible for the change process, and should receive professional support from the communications department.

Selection of the network partner is determined by management in conjunction with the employee dialogue and based on a detailed role description, so that responsibilities are clearly defined from the outset.

In a further step a clear profile is also created for the network expert. This profile is tested and discussed with a selected group of line departments, so that potential ambiguities and uncertainties can be resolved from the beginning. Ideally, network experts will be selected from among their colleagues. If the business culture is not mature, this selection can also be made by management, as long as strict care is taken with regard to acceptance among line department personnel.

The selected network experts are then initiated and trained in their role by the network partner. They will learn the standard processes that they will be responsible for in the future, as well as about cooperation within the future HR network. The new organization will then be gradually introduced, tested, and optimized in the pilot business unit.

Mathias Moelleney is a leadership and change management expert with more than 15 years of experience in senior executive positions. He is the founder of the HR consulting, coaching and training company peopleXpert. He also leads the Centre for Human Resources Management and Leadership at the University for Applied Sciences in Economics Zurich (HWZ) and is the President of the largest professional Human Resources Management Association in Switzerland (ZGP).