5 minute read 28 Jan 2021
Businesswoman viewing graphs on digital tablet in business meeting

Reimagining HR: where is your organization in the People Value Chain?

By Kirsten Vasey

Associate Partner, Transformation Leader, PAS | Switzerland

Global citizen, mother, friend, coach, mentor & triathlete, passionate about enabling people, teams and organizations to be the best they can be.

Contributors
5 minute read 28 Jan 2021
Related topics Workforce CHRO Insights

From a pandemic and the ensuing disruption, something more positive is emerging: a People Value Chain that drives long-term value creation.

In brief:

  • As HR functions emerge from survival mode, it’s an opportunity to reflect on the future of HR
  • Employees’ priorities are shifting and demanding a more empathetic style of leadership
  • New tools and technology will free up capacity and enable HR professionals to focus on less routine tasks
  • Long-term value creation will be achieved along the People Value Chain in future

The new year saw many predictions as to what 2021 will bring – economically, socially and psychologically. Within HR, speculation focused on life after the upheaval of 2020.

Here are some HR highlights and trends we can expect in 2021:

  • The future of work begins today
  • Candidates are prioritizing safety, security, and health when evaluating employers
  • Wellbeing, diversity, inclusion and belonging will become top of the agenda for organizations
  • The focus will shift to outcomes rather than activities
  • Skills, learning and careers will converge
  • Hybrid work models will demand empathetic leadership skills

For the HR function, the last 12 months have been very turbulent, with all efforts focused on ensuring operational continuity – both of the organization and the HR function itself. Many HR organizations have not had the resources or opportunity to reflect on their own purpose, or how to deliver their mission. Stuck in survival mode, HR leaders have not been able to progress in transforming the function to not only deliver operational excellence but also create value for the enterprise in an agile and sustainable way. Now, the question is how to reconcile what was important pre-pandemic with what the crisis has taught us about the function, organization and ways of working. Exploring these aspects allows HR functions to create a transformation roadmap and set priorities for the future.

Working differently

Post pandemic, people functions must adapt the way they work in order to deliver long-term value creation across the four key areas of:

  • Financial value
  • Human value
  • Consumer value
  • Societal value

Today, we’re still observing a failure to prioritize HR transformation due to difficulties in truly unlocking financial value within the HR function or for the organization. Many HR leaders struggle to articulate the initial business case or actual benefits realization.

The good news is that cost savings, better targeting of core services and enhanced people experiences are within reach. Leaders should start by focusing on rebalancing the HR budget and prioritizing efforts around value, working differently and making strategic investments. Combined, these actions will add up to create tangible value as part of an overall People Value Chain.

EY has developed a transformative new operating model based on this concept. The People Value Chain model offers a powerful, evergreen, way of delivering employee services. In this new operating model, the People Value Chain rests on three core components: the digital people team, people consultants and virtual global business services.

Click here for more information about the People Value Chain Model.

So, how can HR get started? 

Some key questions that every HR leader should be asking are:

  • How are organizational priorities being determined going forward?
  • How do we ensure that evolving the people approach remains a top priority at our organization?
  • Do the current HR services and the way they’re delivered truly fit the needs and expectations of our people and organization overall?
  • What has recent experience taught us about ourselves as an HR function and how we can use those insights to spend our time more effectively and fuel the future of HR? 
  • How can we measure value for employees and the organization?

In many organizations, where more transitional HR models are essentially variations on the HRBP, field HR, HR SSC, or CoE models, at least 20% of time and budget is taken up by HRBP or field HR activities. Imagine the possibilities if you could redeploy that value into other digital tools, assets and services, reduce overall HR hours and spend by up to 25% and still deliver people services that make a difference to the employee experience and organization’s long-term value.

Reimagining HR is not only about quick wins. To ensure a sustainable and relevant path forward, two areas of focus should take priority:

1. Operate horizontally

To deliver experiences at scale, the people function of the future must work horizontally across the enterprise, shifting from a process or function-driven approach to an integrated and combined employee and customer experience.

To best deliver services across the enterprise, HR professionals need to understand and enable the following three components:

  • Individual

    personal desires, needs, aspirations, development, and priorities of your people

  • Relational

    interactions with colleagues, customers; how to collaborate and get work done

  • Enterprise

    how the physical, social, technological, organizational, and societal aspects are combined and synergized

How these components interact, and whether they’re enabled in an agile and sustainable way, is what defines business outcomes and people experience.

2. Accelerate digital

Bringing in and leveraging fit-for-purpose and relevant digital tools and technology not only supports streamlining processes, but also unlocks the capacity trapped in current HR service delivery models. Embracing intelligent automation and robotics enables consistent 24/7 support, improves the employee experience and fuels data-driven decisions. The result is more time for the HR team to spend on what matters most across the HR agenda.  

CHROs and Heads of HR who focus on these areas understand what behaviors are needed to achieve these outcomes, what skills, tools, processes and systems enable delivery. Those supported by an agile, human-centered HR operating model will not only survive but thrive over time.

COVID-19 has presented a huge opportunity for HR to reinvent itself and shift from a pure service delivery function to a true catalyst and engine of value creation.

What better time to start than the new year!

Want to learn more about the future of HR, current trends and next steps? EY explores key questions in its webcast “Reimagining the delivery of HR Services through the People Value Chain”.

Summary

COVID-19 has presented a huge opportunity for HR to reinvent itself and shift from a pure service delivery function to a true catalyst and engine of value creation. HR leaders should focus now to reconcile what was important pre-pandemic with what the crisis has taught us about the function, organization and ways of working. By exploring the People Value Chain and embracing tools and technology, organizations will unlock the capacity trapped in current HR service delivery models. The result is cost savings, better targeting of core services and enhanced people experiences.

About this article

By Kirsten Vasey

Associate Partner, Transformation Leader, PAS | Switzerland

Global citizen, mother, friend, coach, mentor & triathlete, passionate about enabling people, teams and organizations to be the best they can be.

Contributors
Related topics Workforce CHRO Insights