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- 1. What is an HR Business Partner? The HR Business Partner model was promulgated by one Mr. David Ulrich in 1997 (Mr. Ulrich is a university professor, author, speaker, management coach, and management consultant. he is a professor of business at the Ross School of Business, University of Michigan) Mr. Ulrich sees HR business partners as part of a successful modern HR function who work closely with an organization’s senior leaders in order to develop an HR agenda that closely supports the overall aims of the organization. This may involve the HR business partner sitting on the board of directors or working closely with the board of directors and C-suite. with experience of putting points across to senior leaders on a regular basis. In the HR business partner model, the human resource department participates in strategic planning to help the business meet present and future goals. Rather than concentrating solely on HR duties such as benefits, payroll and employee relations, HR departments seek to add value to the company by overseeing recruiting, training, advancement and placement of new and current employees in conjunction with line managers. HRBP is essentially person-centered and because HRBPs need to communicate the financial value and future worth of person-centered HR policies to the company’s leadership, as well as communicate
- 2. high-level decisions down to other members of the HR department and the whole organization, communication skills are very important. HR business partnering is becoming more popular as organizations become people-focused and see the value in aligning agendas toward a common goal Commentators talk of a ‘breakdown of traditional silos’ and greater collaboration between departments HR business partners are seen as important in this process as a progressive way to connect the HR department to other functions – since HR business partners often have experience in senior positions they are well-placed to communicate effectively with other senior leaders. The best HR business partners have: Self-belief in their personal ability to make a difference to the business Belief in the value of the HR function Confidence to have a strong point of view and express it even if it proves unpopular Knowledge and experience of the business and its intricacies and an ability to communicate in business terms An ability to build long-term, trusting relationships with clients and with HR colleagues A focus on delivering business outcomes through making best use of the whole HR function and acting as a strong role-model for the rest of the team
- 3. What Is the HR Business Partner Model? In essence, the roles of HR professionals were redefined to meet the competitive challenges organisations were facing then and would face in the future. The structure advocates that where basic administrative HR is taken care of by low-cost, shared-service centres, while a small team of ‘business partners’ are given higher-paid jobs concentrating on people strategies. In the middle are teams of specialists. Benefits The business partner model relieves pressure from management to hone employee job skills for efficiency and productivity, as well as identifying, developing and grooming key employees for advancement. Human resource personnel is also responsible for analyzing employee review data. This allows HR personnel to recognize strengths, which they may then further develop to place employees more effectively, and weaknesses, which they may correct with further job skill training or disciplinary action. Challenges If the HR department is already overworked with everyday employee relation issues, there may not be adequate time and personnel to devote to partnering with the business for additional functions.
- 4. The business partner model requires HR to be involved in almost every aspect of the business, including production statistics, financial status and sales projections. Management buy-in may also be a challenge, as the traditional role of human resources is extended to that of an overseer of the entire business in the business-partner model. Features In theory, the HR business partner model is designed to positively impact the business on all levels over time. By being involved in the recruiting process, HR is able to more carefully screen and choose individuals best suited for the jobs. In the training and development process, HR is able to pinpoint which employees need particular training and ensure that it is carried out. In knowing the inner workings of the business, the strategic nature of the HR partnership model is tasked with a corporate chess game of employee and manager placement to achieve the most productive outcome. Change The primary reason that companies consider and implement the HR business model is change. Whether to grow the business or to make it more competitive, productive, efficient or to solve problems, change in the business paradigm is often necessary. The HR business model handles the changes and improvements necessary by investing in what is known as "human capital." Proponents of the model recognize that the personal success and job satisfaction of the individual is one of the keys to business success, and a well-run HR partner model is ideally suited to focus on both the needs of the individual and the company.
- 5. Considerations Businesses considering the HR business partner model need to consider the specialized nature of different model aspects, and hire, train or outsource HR specialists. Expecting a one-person HR office to handle generalist duties on top of recruiting, interviewing, training, reviews and strategic planning will result in frustration and possible program failure for all involved. The HR business partner model requires a conscious decision to change and the hiring of a sufficient force of specialized HR talent to see it through The HR Business Partner: Panacea or impossible role? Most large organizations have undergone HR transformation following the classic Ulrich model of HR shared services; however, practitioners who have implemented the structure often highlight teething problems and acknowledge they have some way to go before the role of HR Business Partner is operating as they would like within their organization. The Ulrich model provides a centralized HR administration and operational function to line managers and individuals. Centers of expertise create leading edge HR policies, advice on specific issues and HR Business Partners providing organization development, change management expertise and a value-adding partnership to the business. And just as practitioners have found teething problems, if you ask business advisors in the field of HR transformation which
- 6. organization is delivering the business partner element of the model they will often struggle to come up with examples. Are these problems down to how organizations have implemented the Ulrich model or, more potently, is it a flaw in the model on which most organizations have hung their hat? Our experience of working in the field of HR Transformation since the heady days when the Ulrich model heralded the new era suggests that it’s probably a bit of both. Let’s examine the facets of the issue. Exploring the implementation issues In terms of implementation there are a series of interrelated issues. Perhaps the most frequently cited is the problem of line managers not taking responsibility for day-to-day people management that enables HR to focus on more strategic issues. This is exacerbated by the fact that a high proportion of HR transformation is, to a large degree, HR led even where there is a cost reduction driver from on high. This means line managers whose behaviors the function is seeking to change, often don’t welcome the new way of working that results from a restructuring of the HR function. A very common issue arising from function-led HR change is a lack of focus on the business outcomes that are expected from a transformation program. There can be too much focus on cost reduction and service improvements – “Our ratios will be down to 1:120, we’ll be able to recruit faster,” - rather than on driving out clarity on what the business outcomes should and will be. Compare this with a business-led change such as applying lean manufacturing principles which, when done well, has a clear business impact that provides the common goal for example errors in manufacture to one per million, cycle times reduced from 21 to four days
- 7. Very few HR transformation programs can articulate their business impact with such clarity. Then there’s the problem of the capabilities and behaviors of individuals appointed into business partner roles. Very often the organization simply doesn’t have the individuals within it that are a good match to the demanding profile for a business partner. Individuals who bring new insights to seasoned business managers in terms of answers to the problems they’ve thought of and those they haven’t, then integrate delivery of the resulting interventions within the wider organizational context, are relatively few and far between. Yet despite this demanding requirement HR generalists are often required to metamorphosise into strategic players and redefine the relationships with their customers almost overnight. Exploring issues with the model itself Then there is perhaps the thorniest issue – that of a flaw in the model. There are two issues here. Firstly, the core Ulrich model does not adequately address the components that a business partner needs around prioritizing what needs to be delivered across the business and ensuring there is access to key resources such as project delivery, people information and decision support. The second issue stems from the extent to which large-scale technology implementations have become part and parcel of HR transformation. There is an inherent tension between the drive for standardization required for successful ERP and shared service center implementation and the need for specific, tailored business solutions that are essential for the business partner to be credible in the delivery of specific and tangible business outcomes. Let’s take an example. An organization has acquired a niche player which needs to be integrated into an existing business unit. The two cultures are at odds but rapid integration is required to gain benefit from the acquisition. The business partner knows that new
- 8. management behaviors are key to this and the lever to change is the way senior management performance assessment and pay are structured. There needs to be a new approach that goes outside of the company ‘s compensation policy and administrative cycle. The business line wants the change but senior HR colleagues will not support delivery because the specific solution is at odds with the philosophy of standardization. How can organizations keen to buck the trend establish effective business partnering roles? Ulrich’s model still represents the best chance that HR has of repositioning itself and there are ways to overcome the challenges we’ve discussed. Firstly, it is critical to acknowledge that getting line managers to take accountability for people management issues is not going to be achieved overnight, but represents an ongoing process of attitudinal and behavioral change. The first step is to achieve buy in to a new way of working through effective education and communication. Not theory but practicalities. What’s in it for me? What will I see and feel that is different from before? What is my role in this? These messages also need to be consistent across the organization even if the methods are tailored to different audiences. This buy in process must be complimented by appropriate training and reinforced through performance management, remuneration and strong signals from the board down that excellent people management skills are core to being successful in the organization. Secondly, there needs to be a demonstrable link between what HR is doing differently and the business results. Rather than being preoccupied with the intricacies of measurement, if a business partner is able to show that their business unit is closer to having the right skills in the right place doing the right things, then that is a good starting point for demonstrating value add.
- 9. Moreover, it is even better when they can demonstrate their contribution to establishing the right structures and governance, clear objectives and measurement together with excellent talent and succession management. Further, there must be a focus on tailored organization development interventions that become recognized differentiators by business managers and have other colleagues asking how to make it happen, for example in driving the mindset shift required when an organization shifts its strategy from cost reduction to top line revenue growth. Thirdly, it is important to recognize that you can’t just give the same people different job titles. There is a real need to bring in new people with a proven track record and give existing staff with the right skills the chance to wear a new hat with a group of people who don’t prefer them in the old one. Capability assessment exercises are a vital part of any transformation programmer to ensure people able to operate in a different way are identified and aligned to the right customer group. You have to accept from the outset that there are likely to be a significant number of people who will not succeed and ensure that expectations are managed accordingly. It’s also important that developing business partnering capability becomes an ongoing process in the organization and to take a long, hard look at the development paths in HR - there must be a business not a functional focus. It is essential to know what operational knowledge and business skills matter in your organization and to ensure that is what potential business partners are being developed against in addition to their HR and change skills. Moreover, this skill development should be aligned with business wide management development interventions so programmers are complimentary. Be patient and recognize it will take time to embed a successful programmer.
- 10. Lastly, some refinements to the core model are also important to enable the business partner to succeed. There needs to be a clear approach to the prioritization of HR change projects and a simple and transparent process for identifying and allocating resources to work on them. An HR department that establishes programmer office and resource management functions provides two key enablers to helping the business partner discharge their role effectively. To address the tension between HR shared services and business partners is an organizational rather than a functional issue. Business leaders, coached by the HR leadership team, need to set direction on the right balance between standardization and customization given their organizational context. This can then underpin the thinking on appropriate costs of the function, suitable technologies, policy and process. Most importantly it enables the right governance approach to be developed within the function in terms of the decisions that rest with a business partner versus the shared service center or center of expertise. Focus outwards and ensure that senior business customers are fully involved in the HR transformation process. The key to successful HR transformation and strong, effective business partners is to focus outwards and ensure that senior business customers are fully involved in the HR transformation process. Any disconnect with the business and any transformation that is premised on ‘HR for HR’s sake’ will not deliver for HR or the business and will result in a progressive degradation of the HR business partner role over time. Where did the businesspartner model go wrong?
- 11. Hailed as the approach progressive human resources departments should be taking in the 21st Century, it would seem the jury is still out on the HR business partner model. That is according to research less than half (47%) of managers think the HR business partner experiment has been a success and, a quarter (26%) went as far as to say the system was not effective at all, while the remainder said it was too early to tell. But although this approach does seem to have been successful in a lot of organisations, why has it also failed in so many? A common pitfall is for HR departments is to get hung up on implementing structures without actually developing their strategic influence. “It’s easy to change a structure, but if there’s no clarity around what HR is supposed to deliver once this structure is in place then nothing will change,” he said. “In a lot of the companies, it’s not always clear what HR is there to do.” Rather than get bogged down with implementing the structure and re- labelling itself a business partner, HR should start by “getting its value proposition and delivery right and the structure should fall out of that”. – Paul Higgins Confusion Part of the reason for the confusion over the role of the business partner, he says, is that Ulrich defined four distinct roles for HR professionals within his model – strategic player, administrative expert, employee champion, and change agent. In some cases, the lack of clear definition for these roles has stopped the business partner model from being truly effective and meant the HR delivery has not lived up to the expectations of the business, according to Higgins. He also feels there is a question mark over whether there are enough HR people capable of delivering the business partner model and feels
- 12. there are many people in HR who don’t have the expertise or competencies to make the jump to a strategic role. “Role fulfilment can only happen if the requisite talent is there,” he said. This point is picked up by Jane Clark, senior HR business partner at aid agency Christian Aid. She says HR business partners require a whole different skill set compared with traditional HR generalists, and in some organisations HR has been expected to make this transition without adequate support. “If you re-badge people without giving them training and awareness, you are setting them up for failure” she said. For Clark, a strategic HR business partner must be focused on looking forward, “anticipating change, understanding its impact on the people side of the business and managing this change”. She says they must be comfortable working with senior people from the business on an equal footing and acting as an internal consultant within the business. Outside experience But many HR practitioners who have spent all their working life solely within the function will struggle to tick all these boxes, according to Clark. She believes her experience of working outside of HR in an international development role for many years has helped her develop her strategic focus. She recommends giving HR business partners secondments to other functions in the business as a way of expanding their strategic and commercial nous. At international law firm Bird and Bird, head of HR Johnny Nicholls previously worked as a lawyer as well as an HR practitioner for a recruitment firm. He says this blend of experience, and cross fertilisation of ideas it has produced, has enabled him to make the step to business partner and given him “a different view on timescales and the business process”.
- 13. “I consider my role to be about adding value to the business and understanding the business model,” he added. Nicholls says while the business partner model sounds good in theory, where it falls down in a lot of organisations is the hiving off of adminstrative roles to a shared-service centre. According to Nicholls, the shared-service model only truly bears fruit in larger organisations. In smaller companies, it is the administrative and transactional tasks that give HR the opportunity to interact with the business and offer good service – facets of the role that help build credibility with the business. “Anyone who feels they can just deal with the strategic piece and not get their hands dirty needs to look at a position in a really big company,” he said. A good working relationship between line managers and HR business partners is also essential if the model is to work, according to Gary Miles, a principal consultant responsible for strategic HR at Roffey Park. Work with line managers He says line managers are the key enablers of an organisation’s strategy on the ground, and therefore they need to understand how they fit in and what HR business partners are there to do. “Business partnering is only effective if line managers have been prepared beforehand and know what to expect from this new HR approach,” he added. This issue, according to Paul Kearns, director of HR consultancy PWL, strikes at the heart of why many business partner approaches fail. He says if HR is to be effective into the future, something must be done about improving the quality of line management rather than HR per se. He said: “Managers use very old techiques, such as profit and loss auditing, and see people and training as overheads, and until they are
- 14. educated otherwise HR will find it very difficult to offer them a better service.” He added: “Most HR teams have not educated their management teams about what HR-focused management is. They should be going out into the business and explaining their vision.” Kearns says that despite the cool response to the business partner model from some quarters, HR must never give up trying to work closely with business managers? “The need for a business-focused role for HR is more important today than it has ever been, he said. “Globalisation means more competition, and more competition means getting more out of people.” But if the business partner model is not delivering, does Kearns feel there is an alternative structure that will be more effective? Not so much a different structure as a totally different approach altogether, says Kearns, who believes the model that splits HR into transactional and strategic is a false dichotomy. “If companies have very complex pay schemes that cost a lot to administer, the answer is not more efficient administration, but better designed, simpler pay schemes. “In other words, better strategic HR decisions will lead to more efficient administration – not the other way around.” Does Ulrich’s HR business partner model work? “Ulrich’s original thesis was an excellent piece of work and very influential. It stimulated a lot of thinking in HR and encouraged the function to be more strategic. It was a wake-up call.” Jane Clark, senior business partner, Christian Aid “HR business partnering can be effective and there are a number of organisations out there that are doing things right.” Nicholas Higgins, chief executive, Valuentis
- 15. “Ulrich is an academic and has never been an HR manager, never mind a business partner. Like many academics he produced a model that looks OK on paper but his research was seriously flawed.” Paul Kearns, director, PWL “Only a limited number of HR people are capable of taking the step towards being a business partner,” Johnny Nicholls, head of HR, Bird and Bird Career paths for HR business partners While the Roffey Park research may suggest an element of uncertainty for HR practitioners who have made the move to a business partner role, Paul Kearns believes their future is bright. He said: “For a business-focused, totally professional, modern HR person who creates lots of value, the sky is the limit.” Kearns says with the topic of human capital management high on the corporate agenda, effective HR business partners are well-placed to play a central role within their organisations. “With many of the low-skilled jobs going to India and China, Western organisations are focused on getting the best out of their people and moving up the value chain.” For Jane Clark at Christian Aid, strategic HR business partners, who have developed commercial skills, have a choice of career paths. She said: “They are well-positioned to move into an HR director’s role, but equally could make the step into a senior management position on the top table, and even the chief executive role. Consultancy work is also another option.” 7