The changing HR function - Glass Bead Consulting · The roles and responsibilities of the HR...
Transcript of The changing HR function - Glass Bead Consulting · The roles and responsibilities of the HR...
Survey report September 2007
The changing HR function
Contents
Summary of key findings 2
Introduction 4
Restructuring the HR function 5
Benefits and challenges of HR structures 10
Roles and responsibilities of HR 15
HR skills and careers 24
Conclusions 26
Background 27
Acknowledgements 28
References 28
The changing HR function �
Summary of key findings
• Fifty-three per cent of organisations have restructured of centres of expertise were identified, the most
their HR function in the last year and 81% have done
so in the last five years. By far the most common
common being deeper professional knowledge.
Other commonly perceived benefits are in the
reason for restructuring was to enable the HR consistency of HR advice, the quality of advice
•
function to become a more strategic contributor.
Three out of ten respondents whose HR function
given to HR partners and making the function a
more strategic contributor.
has been restructured say that it now reflects the • In general, the most common difficulties
three-legged ‘Ulrich model’ and a further 28% say
that this is partially true. However, only 18% of HR
encountered in restructuring the HR function are
in defining new roles (42%), having insufficient
functions actually had in place all three elements resources (40%), dealing with skills gaps (38%),
of this model (shared services, business partners
and centres of expertise). Among HR functions
having ineffective technology (35%) and resistance
to change within HR (23%). Respondents also
that were said not to reflect the ‘Ulrich model’, report on specific challenges in implementing each
by far the most common structure is a single HR
team incorporating generalists, specialists and •
element of the so-called ‘Ulrich model’.
When asked about the main objectives of the HR
administration. function, recruitment and retention was given
• Centralised provision of HR administrative services
exist in 28% of organisations responding to the
as the highest priority, followed by developing
competencies and maximising employee
survey. Over two-thirds of these organisations involvement and engagement. Meeting business
currently deliver their shared services wholly in
house and a quarter partially outsource. A range of
strategy or goals is the most important driver of
future people management policies and practices.
benefits are identified in having shared services, the • The HR function has over the last three years
most common of which are repositioning the HR
function, making it a more strategic contributor,
doubled the proportion of time it spends on
strategic inputs, at the expense of administrative
helping focus HR work on more value-added activities. Further movement in the same direction
•
services and improving HR service quality.
HR business partners are present in 38% of
is expected over the next three years. However,
though developing HR strategy and policy and
organisations. A number of benefits were observed contributing to business strategy are the most
in having business partners, the most common
of which is that HR is becoming a more strategic
important tasks for respondents, providing support
to line managers and HR administration are their
contributor. Other common benefits are that HR is most time-consuming tasks.
more business-focused, people management issues
are given more importance and the HR function
• Areas of devolution of people management
activities are largely unchanged from the
has improved its credibility. CIPD’s 2003 survey. HR still takes the lead on
• Centres of expertise are found in 29% of
respondent organisations. The most common
remuneration and implementing redundancies; the
line has prime responsibility for work organisation;
expertise areas are training and development while for a third group (recruitment, employee
(79%), recruitment (67%), reward (60%) and
employee relations (55%). A range of benefits
relations, and training and development) matters
are more shared.
� The changing HR function
• Three-quarters of survey respondents would like to
go further in the transfer of people management
responsibilities to the line. It seems obstacles to
progress appear to be line manager priorities,
their skills, the time available to them for people
management tasks and poor manager self-service.
• Virtually all the survey organisations measure HR’s
efficiency and over half examine HR effectiveness
through people management practice and its effect
on outcomes such as absence.
• With respect to the competencies of HR staff, the
biggest challenges that lie ahead are considered
to be in developing influencing skills and strategic
thinking. Business knowledge, leadership skills,
willingness to innovate and, to a lesser extent,
being able to deliver against targets are also
commonly noted to be a challenge.
• The overall impression from the survey is that
structural change has had little impact on
development upwards or sideways, or in joining
the function. Two-thirds of our survey respondents
say that the changes give more opportunity to staff
compared with only 17% who think that it‘s harder
to develop people into new roles.
• To deal with skills gaps the emphasis is on more
formal types of learning. Nearly three-quarters of
respondents choose external courses, followed by
CIPD study (57%) and half select internal events
and external conferences as the main means to
close skills gaps.
The changing HR function �
Introduction
This report presents the findings of a survey
commissioned by the CIPD as the third phase of its
major two-year research study, ‘The Changing HR
Function’. The survey builds on the work of the first
two stages, a review of existing knowledge and
research and a series of qualitative case studies.
The aim of the survey is to examine how HR functions
across the spectrum of size and sector are meeting the
challenges of structure, role, skills and relationships.
Particular attention is given to the extent to which HR
functions have adopted the so-called ‘three-legged’
model developed from Ulrich’s work, which
incorporates centres of expertise, shared services and
business partners.
This is a companion to the main Research into Practice
report, The changing HR function: transforming HR?
(CIPD 2007), and follows the Phase One report, The
changing HR function: the key questions (CIPD 2006).
� The changing HR function
Restructuring the HR function
The great majority of respondents (81% of the 787)
report that their HR function has changed its structure
in the last five years, with just over half of these (53%)
having done so in the last year. This section focuses on
the structures that have been adopted, in particular in
relation to the three-legged ‘Ulrich model’. We also
discuss the main drivers for restructuring the HR
function, the size of the HR function and what benefits
and challenges respondents identified in the various
elements of the ‘Ulrich model’. The section finishes
with some key lessons that respondents feel they have
learned from the restructuring process.
The roles and responsibilities of the HR function,
including the extent to which HR-related activities were
devolved to line management, and the impact
restructuring the function has had on careers in HR are
discussed separately (see pages 15 and 24).
Drivers for change in structure
Respondents cite a range of drivers for changing the
structure of HR. Among these, by far the most
common reason given is to enable HR to become a
more strategic contributor, this being indicated by 54%
of respondents whose organisations have changed
their structures in the last five years.
Somewhat less prevalent, but nonetheless common,
drivers are a need to improve services (34%), increased
business focus (30%) and cost reduction (29%).
Closely following these reasons are a need to fit the
wider organisational model and repositioning the HR
function (24%) and a need for a more responsive
customer service (23%).
The 41 individual responses citing ‘other’ reasons for
restructuring the HR function include mergers, business
growth, reductions and increases in workforces and a
change of HR director or other senior personnel.
Size of the HR function
The average (median) size of the HR function is 10
staff, with a third (32%) comprising 1 to 5 staff, and
half (51%) between 6 and 50. Eight per cent have over
100 staff in their HR functions and the highest number
recorded is 3,000 (see Figure 1).
0
0
1–5 6–10 11–20 21–50 51–100 101+
35
25
30
10
5
32
18 16
17
8 8
0
15
20
Number of staff in HR
Perc
enta
ge o
f re
spon
dent
s
Figure 1: Number of people employed in your HR function
The changing HR function �
Respondents were asked how the number of staff in
their HR function has changed in the last three years (see
Table 1). Overall, the most common increase is in the
number of mid-level managers, professionals or technical
specialists (45% of organisations). The most common
numerical decrease is in administrators and junior staff,
which has occurred in a third (31%) of organisations. In
just over half of organisations (55%), the number of
senior HR managers has stayed the same.
These figures are similar for public and private sector
organisations, although there are the following notable
differences: more private sector organisations have
increased the number of senior HR managers than
public sector organisations (35% versus 29%);
reduction of mid-level managers is slightly more
common in the private sector than public (17% versus
13%); and in the private sector there is more growth,
and in the public sector more reductions, in the number
of administrative and junior staff in organisations.
Adoption of the ‘Ulrich model’
Adoption of the three elements
Respondents were asked whether their HR function
has introduced the three commonly recognised aspects
of the ‘Ulrich model’ (or three ‘legs of the stool’),
namely centralised provision of shared administrative
services (shared services), business partners and centres
of expertise.
A total of 219 respondents report that their
organisations have introduced centralised provision of
shared administrative HR services. This represents 28%
of all organisations and 35% of those organisations
with new HR structures. At the time, over two-thirds
(69%) of organisations that have shared services
deliver them wholly in-house; just over a quarter
(28%) partially outsource their shared services; and
4% wholly outsource them (see Figure 3). However, a
general shift towards greater outsourcing of shared
services in HR is anticipated. Eleven per cent of
%
Reduced Base
Senior managers 32 55 13 745
Mid-level managers 45 41 15 730
32 37 31 733
Table 1: Changes in the size of the HR function over the previous three years (row percentages)
Grown Stayed the
same
Administrative/junior staff
Business partners
35
40
25
30
10
5
28
38
28
0
15
20
Shared services Centres of expertise
Perc
enta
ge o
f re
spon
dent
s
Figure 2: Percentage of all organisations that have implemented the three legs of the ‘Ulrich model’
Implemented element of ‘Ulrich’ Base: 776
� The changing HR function
Base: 214
Base: 214
69%
4%
28%
Wholly in-house
Wholly outsourced
Partially outsourced
Wholly in-house
Shared services now
Shared services in 3 years
Wholly outsourced
Partially outsourced
42%
11%
47%
Figure 3: How are shared services delivered now?
respondents expect that these will be wholly
outsourced in three years’ time, 47% expect them to
be partially outsourced and 42% expect them to be
wholly in-house.
Twenty-nine per cent of all organisations (36% of
those with new HR structures) have implemented
centres of expertise. These exist for a range of areas
that vary by organisation (see Figure 4). However, the
0 20
60
67
43
55
36
32
26
79
30
8
40
Management information
60 80 100
Percentage of respondents Base: 229
Communications
Health/welfare
Talent management
Employee relations
Organisational development
Recruitment
Reward
Social responsibility
Training/development
Figure 4: Subject with their own centres of expertise as a percentage of organisations with centres of expertise
The changing HR function �
great majority of organisations with centres of
expertise have them for training and development
(79%). Other common areas include recruitment (67%
of organisations with centres of expertise), reward
(60%) and employee relations (55%).
Thirty-eight per cent of organisations (46% of those
with new HR structures) report that their organisations
have introduced HR business partners.
There are moderate correlations between the
implementation of these three aspects of the model,
suggesting that these changes are often implemented
more or less in conjunction, as a general shift towards
the ‘Ulrich model’.
Perceptions of the ‘Ulrich model’
As well as being asked which elements of the ‘Ulrich
model’ have been introduced, respondents whose
organisations have restructured their HR functions
were more generally asked whether these reflected
‘the so-called Ulrich model’. Almost 3 in 10 (29%) say
that this is the case; 28% that it is partially so; and
two-fifths (41%) of respondents report that this is not
the case.
However, although 29% claim that their HR function
has been restructured to reflect the ‘Ulrich model’,
cross-tabulating the results to the individual questions
on shared services, business partners and centres of
expertise shows that, in fact, only 18% of
respondents’ organisations had all three ‘legs of the
stool’ (see Table 2). This is interesting, not least
because the phrase the ‘Ulrich model’ carries a great
deal of currency in HR circles. One can speculate as to
the reasons why respondents report that their
organisations have implemented the three-legged
‘Ulrich model’ when in fact they don’t have all three
components; nonetheless, this finding certainly
reinforces the impression that the pure model is not as
common as the publicity that surrounds it suggests.
Adoption of other models of the HR function
Among organisations that have a new HR structure
but have not adopted the ‘Ulrich model’, two-thirds
(66%) have single HR teams with generalists,
specialists and administration together. A further 15%
have corporate HR strategy teams with operational
teams aligned to business units; 12% have corporate
strategy teams with operational teams aligned by
location; and 5% have a set of centrally provided
specialist services supporting business unit HR teams
(see Figure 5).
Business partners %
3 3 3 18
3 3 7 7
3 7 3 4
3 7 7 6
7 3 3 7
7 3 7 15
7 7 3 8
7 7 7 36
Table 2: Implementation of the three legs of the ‘Ulrich model’
Shared services Centres of expertise
Total �00
Base: 625
� The changing HR function
Corporate HR strategy team aligned by location
Corporate HR team aligned to business units
Single HR team
5%
5%
Other
Set of HR specialist services
67% 15%
12%
Figure 5: Structures of the HR function other than the ‘Ulrich model’
The changing HR function �
Benefits and challenges of HR structures
This section describes the benefits and challenges that
respondents associate with introducing different HR
structures, in particular shared services, business
partners and centres of expertise.
Although a number of respondents feel that the HR
functions are too early in the process of change to see
any benefits, many are able to identify both benefits of
introducing the three elements of the ‘Ulrich model’
and problems associated with doing so.
General challenges in implementing changes
Respondents were asked about general challenges
they have experienced in implementing changes to
the structure of the HR function. The most common
problems cited were defining new roles (42% of
those who noted challenges), having insufficient
resources (40%), dealing with skills gaps (38%) and
having ineffective technology (35%). Resistance to
change in HR is also relatively common, being cited
by a quarter of the respondents who noted
challenges (see Figure 6).
Shared services
Benefits
Respondents whose organisations have shared services
were asked whether its introduction has resulted in ‘no
change’, ‘some change’ or ‘major change’ in a range of
relevant areas (see Table 3). It was most commonly
noted that ‘some change’ has been achieved, with
between 45% and 60% of respondents selecting this
option for each question. Overall, there is some degree,
but not a great deal, of variance between the responses,
average (mean) scores ranging from 0.8 to 1.2 (where
0=no change, 1=some change and 2=major change).
Nonetheless, some benefits are seen to be greater than
others. In particular, a third of respondents (34%) note
major change in repositioning the HR function, with
only 18% noting no change. The extent to which HR
0 10
42
23
35
40
3
38
16
17
13
6
20
Dealing with skills gaps
Inadequate consultancy
Resistance to change in technology
Other
30 40 50
Percentage of respondents with restructured HR function Base: 614
Objections from line manager customers
Insufficient resources
Ineffective technology
Defining roles
Recruitment difficulties
Ineffective process change
Figure 6: Challenges faced in implementing changes
�0 The changing HR function
%
Benefits No change Major change Base
27 60 13 195
14 57 29 192
21 49 30 192
24 52 25 191
25 45 31 191
Repositioning HR 18 48 34 191
19 50 31 193
38 45 17 192
HR time shifted to value-added services 16 59 25 190
Table 3: Observed benefits of shared services
Some change
Cost reduction
Improvement in service quality
More responsive customer service
More commercial approach to HR
Improving credibility of function
HR more strategic
More satisfied HR staff
has become a more strategic contributor, which as
noted above is the most common driver for change,
is also fairly marked – half of respondents noting some
change and 31% noting major change.
There are also some benefits that are generally seen to
be less marked than others. Especially muted is the
increase in satisfaction among HR staff, in which two-
fifths (38%) of respondents note no change and only 1
in 6 (17%) note major change. It is likely that this
finding partially reflects a time lag from the
implementation of changes to effects on staff
satisfaction. In another long-term factor, namely
improvement in the credibility of the HR function,
there is greater variance of opinion. Here, a third of
respondents (34%) note major change and a quarter
note no change.
The benefits to cost reduction are also relatively small,
only 13% noting major change and over a quarter
(27%) noting no change.
Challenges
By far the most common problem encountered in
introducing shared services is boundary disputes (Figure
7) between parts of HR, as recognised by 56% of
0 10
35
34
19
56
41
14
30
36
26
13
20
Boundary disputes
Customer complaints
Expected savings not achieved
30 40 50 60
Percentage of respondents Base: 614
Blocks to development of HR career
Ineffective escalation procedures
Gaps in service provision
Poor learning within shared services
HR staff objections to structure
None
HR communication difficulties
Figure 7: Percentage of respondents with shared services encountering problems
The changing HR function ��
respondents. This is followed by the related issue of
gaps appearing in service provision, which is recognised
by two-fifths of respondents (41%). Other common
difficulties are communication problems within HR
(36% of respondents), customer complaints over the
service (35%) and existing HR staff objecting to a
service centre structure (34%).
Business partners
Benefits
Overall, the introduction of HR business partners is seen
to have a number of benefits for the organisation. The
most common benefit is that HR is becoming a more
strategic contributor, which was observed by three-
quarters (76%) of respondents whose organisations
have introduced HR business partners (Figure 8).
This is an important finding, as this factor was identified
as the most common key driver for change (see page
5). Further, it is supported by the fact that the majority
of respondents recognise that the introduction of
business partners has led to an increased business focus
(69% of respondents), put people management issues
higher up the agenda (60%) and improved the
credibility of the function (58%). About half of
respondents (53%) agree that HR business partners
have helped reposition the function.
Benefits are also seen in staff engagement and
performance outcomes. Three-fifths (61%) of
respondents whose organisations have introduced HR
business partners observe that it has led to greater line
engagement, two-fifths (40%) that it has led to
improvements in service quality and half (51%) that it
has led to increased customer satisfaction.
Challenges
The most common challenges experienced in
implementing business partners generally relate to
developing the role appropriately. Half (49%) of
respondents whose organisations have introduced HR
business partners agree that they have been drawn into
activities that are not relevant to the role (‘going native’);
just under half (46%) recognise that there has been
tension between responding to corporate and business
unit needs; and two-fifths (40%) cite the failure to be
strategic as a problem. A quarter think that the business
partner role is or has been unclearly defined (Figure 9).
Centres of expertise
Benefits
As one would hope, a clear majority (69%, or seven
out of ten) of respondents whose organisations have
implemented centres of expertise think that the depth
of professional experience has been increased as a
0 20
76
51
61
53
40
58
69
60
7
1
40
Base: 291
Repositioning of HR function
None
People management issue higher up agenda
60 80 100
Percentage of respondents
Increased business focus
Improving credibility of function
Improvement in service quality
Greater line engagement
Increased customer satisfaction
HR becoming more strategic contributor
Cost reduction
Figure 8: Percentage of respondents with business partners experiencing benefits
�� The changing HR function
result. More specifically, nearly half (47%) think that Marked improvements are also evidenced in the
there is better awareness of external good HR practice dissemination of this expertise through advisory services.
(Figure 10). In particular, over half (54%) of respondents cite
0 10 20
Higher quality of advice to line managers
Repositioning HR function
Higher quality of advice to executive committee
Higher quality of advice to HR partners
None
Other
30 40 70
69
54
42
51
56
38
30
47
47
3
11
44
36
4
6050
0 10
25
40
46
13
32
12
49
21
41
18
20
Inadequate knowledge
Behavioural skill deficiencies
Failing to act as a service lead
Coping with employee demands
30 40 50
Percentage of respondents Base: 227
Credibility of function improved
Cost reduction
Improved handling of call centre referrals
Better awareness of good practice
More responsive customer service
HR becomes more strategic contributor
Greater consistency of advice
Deeper professional expertise
Improvement in service quality
Figure 10: Percentage of respondents with centres of expertise experiencing benefits
Percentage of respondents Base: 271
Getting drawn into wrong activities
Tensions between corporate and business levels
Failure to be strategic
Unclear role
Difficulties in finding right staff
Customer resistance
Figure 9: Percentage of respondents with business partners encountering problems
The changing HR function ��
benefits in the quality of advice given to HR partners
and half (51%) note that, overall, there is greater
consistency of advice. Substantial proportions of
respondents also note higher-quality advice to line
managers (47%) and executive committees (42%).
Interestingly, however, a more commonly noted benefit
of introducing centres of expertise is that they help HR
become a more strategic contributor (noted by 56% of
respondents). Their role may thus be particularly
important in supporting HR business partners.
Challenges
The problems most commonly associated with
introducing centres of expertise are difficulties in
separating out transactional work (cited by 46% of
respondents whose organisations have shared services)
and communication with the rest of the function (34%).
Other common problems include recruiting appropriately
skilled staff (30% of respondents) and staff having a
poor grasp of business issues (28%) and deficiencies in
their professional skills (21%) (Figure 11).
0 10
12
16
17
13
21
28
4
18
30
34
46
9
7
20
Base: 215
Poor grasp of business issues
Over elaborating services
None
Other
30 40 50
Percentage of respondents
Communication with rest of function
Recruitment of high quality staff
Difficulty in developing specialist careers
Gives inappropriate advice to line managers
Professional skills deficiencies
Not aware of external good practice
Too much time spent on problems
Insufficiently tailored advice
Difficulty in separating out transactional work
Figure 11: Percentage of respondents with centres of expertise encountering problems
�� The changing HR function
Roles and responsibilities of HR
Purpose and objectives
Respondents were asked to identify the five main
objectives of their HR functions. The objective most
commonly cited is to recruit and retain key staff,
identified by 7 out of 10 respondents. Following this are
the objectives of developing employee competencies
(62% of respondents), improving the management of
people performance (61%) and maximising employee
involvement and engagement (59%) (Figure 12).
Helping employees focus on key business goals,
changing line management behaviour and securing
compliance with employment relations regulations are
also common main objectives (respectively cited by 47%,
46% and 39% of respondents).
A similar question was asked in 2003. Comparison
needs to be done with care, as the options offered
were somewhat different. Nevertheless, there are some
striking differences. In particular, where 16% of the
sample this year identify cutting costs as one of their
priorities, 55% did so last time. It is possible that this is
a reflection of a change in the business climate. There
are also striking reductions in developing employee
competencies/capabilities and focusing employees on
business goals and customer needs. Recruitment and
retention of staff is consistently a key goal, and
employee engagement and legal compliance remain
important to roughly three-fifths and a two-fifths of
the survey respondents.
0 20
47
62
16
70
18
39
59
19
35
61
33
46
3
40
Manage major structural change
Maximise employee involvement/engagement
Focus employees on customer needs
Develop employee competencies
Change line management behaviour
Manage major cultural change
60 80
Percentage of respondents Base: 784
Improve the way in which people performance is managed
Create a more diverse workforce
Secure compliance with employment regulations
Recruit and retain key staff
Cut/control costs
Improve employees’ focus on key business goals
Other
Figure 12: Main objectives of the HR function (top five priorities)
The changing HR function ��
%
Not important I i Base
Business strategy 1 11 88 783
Employee needs 5 66 29 778
24 52 24 760
5 48 46 776
Benchmarking against good HR practice 15 62 22 771
Cultural values of organisations 2 39 59 774
1 44 55 776
Line managers 6 63 31 768
10 61 29 772
21 64 15 761
HR strategy 5 45 51 770
30 43 27 759
Table 4: Expected importance of potential drivers of HR change over the coming three years
mportant Very mportant
Changes in product/services
Cost pressures
Views of senior management
Employment regulation
Internal customer pressure
Globalisation/competitive pressure
Future drivers of change
Respondents were asked to rate the importance of a
range of factors as drivers of change in their people
management policies and practices over the coming
three years. Each of the 12 factors listed is thought to
be ‘important’ or ‘very important’ by the majority of
respondents (between 70% and 99%); but some
factors are nonetheless generally considered more
important than others (Table 4).
In line with the CIPD’s 2003 survey, by far the most
important drivers are business strategy and goals –
almost 9 out of 10 respondents (88%) identify them as
very important drivers for the coming years and only 1%
identify them as unimportant. Also extremely important,
and again unchanged from 2003, are the culture and
values of the organisation and the views of senior
management, with over half of respondents predicting
that they would be very important drivers and only 1%
or 2% considering them unimportant. HR’s own strategy
and cost pressures are also considered very important by
many respondents (51% and 46% respectively). Cost
pressure is lower in importance as a driver of future
change compared with 2003, just as it is less important
as a current priority. Less than a third of respondents
think that employment regulation would be very
important as a change driver. In 2003 the figure was
57%. Employee needs as a very important contributor to
HR change also fell from 47% in 2003 to 29% in 2007.
Using five scales indicating different continuums,
respondents were also asked to describe their vision of
where they believe the HR function needs to be in the
future compared with its current position. Figure 13
overleaf shows the mean scores of these results.
Overall, significant shifts are thought necessary for the
function in all five continuums, towards becoming more
strategic, proactive, tailored, business-driven and
specialist. However, the greatest changes thought to
be needed are for the HR function to become more
proactive and for it to shift from being generally
operational to being generally strategic.
�� The changing HR function
1 2
2.7
3.4
1.9
2.6
2.1
2.5
1.7
3.1
2.0
3.2
3 4 5
strategic
business-driven
operational
employee-driven
generalist
Now
1 2
3.7
3.2
2.5
3.4
2.7
2.4
3.1
1.5
3.2
1.9
3 4 5
strategic
business-driven
operational
employee-driven
generalist
Now
proactive
tailored practice
specialist
reactive
off-the-shelf
Mean score Future
Figure 13: Where the HR function is now and where it needs to be in the future (mean scores) 2007
proactive
tailored practice
specialist
reactive
off-the-shelf
Mean score Future
Figure 14: Where the HR function is now and where it needs to be in the future (mean scores) 2003
When comparing these results with 2003, as seen in
Figure 14, they are similar. But two differences can be
picked out. First, is the function becoming more
generalist than in the past, and is this a reflection of the
growth in business partner roles? Second, the function
seems to be even more business-driven in its approach,
and less employee-driven, than in 2003.
Activities
Respondents were asked to indicate what proportion
of their time they spend or would spend doing
administrative, operational and strategic activities three
years ago, at the current time and in three years’ time.
The average scores for these results are presented in
Figure 15 overleaf.
The changing HR function ��
69%
Figure 15: Where the HR function is now and where it needs to be in the future (mean scores) 2007
Three years ago
12%
Administrative activities 50%
39% Operational HR
Strategic input
Base: 611
Now
23%
36% Administrative activities
Operational HR
41% Strategic input
Base: 626
In three years’ time
35% 24%
Administrative activities
Operational HR
41% Strategic input
Base: 607
�� The changing HR function
On average, it is estimated that three years ago
administrative duties took up half (50%) of
respondents’ time. Since then, there has been a marked
drop in this figure to just over a third (36%) and a
corresponding rise in the proportion of time spent on
strategic tasks (from 12% to 23%). The proportion of
time spent on operational tasks is generally thought to
be similar now to three years previously (up from 39%
to 41%).
Over the coming three years, based on these responses,
it can be anticipated that the trends in administrative
tasks and strategic input will continue steadily, with
respondents estimating that the proportion of their time
spent on administrative activities will go from just over a
third to a quarter (36% to 24%), and vice versa for the
time spent on strategic input (23% to 35%). Overall,
the proportion of time spent on operational tasks is
expected to remain at two-fifths (41%).
In short, there is a clear upward trend in strategic input
and a corresponding downward trend in administrative
activities, pointing to a concerted effort to increase the
added value of the HR function.
The shift is also reflected in the importance respondents
attach to their respective activities (Figure 16). Over half
of respondents (58%) identify business strategy
activities and nearly two-thirds (64%) identify
developing HR strategy and policy as among the three
most important types of task that they undertake. By
contrast, only 5% of respondents list administrative
activities as among the three most important types of
tasks they undertake.
Within operational activities, the one most commonly
recognised to be among the most time-consuming is
providing support to line managers (71% of
respondents); by contrast, only a quarter (26%) of
respondents report that supporting employees is among
the most time-consuming of their activities. This
difference is reflected in the importance respondents
attach to these activities, with only 1 in 10 (9%) listing
employee support and over a third (37%) listing line
manager support as among the most important of their
activities.
Other operational tasks considered to be among the
most time-consuming are implementing HR policies
(38% of respondents) and change management (36%).
However, while the latter is frequently considered
among the most important of respondents’ activities (by
49% of respondents), the former is considered thus by
only one-sixth (16%) of respondents.
The results from the 2003 survey are very similar.
0 20 40
Base: 775
HR administration
Updating own HR knowledge
Helping employees
Developing HR strategy and input
Implementing HR policies
Most important
Most time-consuming
60 80 100
58 14
16 38
37
36
71
64 28
49
49
52
30
9
5 5
9
26
10 30 50 70 90
Percentage of respondents
Change management
Providing support to line managers
Providing specialist HR output
Business strategy
Figure 16: Percentage of respondents listing activity areas as among three most important/most time-consuming
The changing HR function ��
Responsibility for HR-related activities
The remits of HR vary to some extent, with substantial
proportions of the respondents reporting that their HR
functions have part or main responsibility for various
activities other than those typical for HR (see Table 5).
The most common among these is organisational design,
9 out of 10 respondents (89%) indicating that their HR
functions have part or main responsibility for this.
A similar proportion (87%) report that their HR functions
are involved in managing internal communications.
The HR functions of a third of respondents (35%) take
the lead responsibility for health and safety, with a
further 42% holding joint responsibility.
The extent to which the allocation of HR-related tasks is
divided between the HR function and line management
varies substantially between respondents. Nonetheless,
there are some general trends, which can be seen in
Table 6. The responsibility for pay and benefits,
employee relations, training and development, and
implementing redundancies is typically shared or lays
primarily with HR. There are particularly low levels of
devolvement to line management in pay and benefits
and the implementation of redundancies, which are
managed mainly or entirely by HR in nearly two-thirds
of organisations (65% and 62% respectively).
On the other hand, the responsibilities for work
organisation and for recruitment and selection lie
mainly with line managers. In over half of organisations
(55%) line managers are mainly or entirely responsible
for work organisation. Recruitment and selection are
primarily the responsibility of line managers in a fifth
(21%) of organisations and shared between line
managers and HR in a further 55% of cases.
Table 6 also allows comparison to be made with the
2003 survey. As can be seen, there is very little change
in the allocation of responsibilities between HR and the
line. This is despite HR’s ambition to devolve more.
Lead /joi None Base
Organisational design 22 67 11 771
Facilities management 12 22 66 753
24 63 13 770
Health and safety 35 42 22 771
14 57 29 761
Corporate branding 4 43 53 759
2003 2007
Li / inly li
inly /
Li / inly li
inly /
Recruitment/selection 31 52 17 29 55 16
Pay and benefits 8 29 62 7 28 65
8 40 52 6 40 54
12 44 43 10 49 42
6 34 59 4 34 62
– – – 54 37 9
Table 5: Percentages of HR functions taking responsibility for atypical HR activities
HR responsibility %
Part nt
Internal communications
Corporate social responsibility
Table 6: The allocation of responsibility and line management in how decisions are taken
Work area nema ne Shared
MaHR HR
nema ne Shared
MaHR HR
Employee relations
Training and development
Implementing redundancies
Work organisation *
* not included in 2003 survey questionnaire
�0 The changing HR function
0
1.40
1.11
1.11
1.35
1.31
0.55
0.70
0.80
0.48
1.19
1.15
1
0 = not at all 1 = a fair amount 2 = a g
Poor employee self-service capability
Reluctance to let go
l
Skills
Disposition
Priorities
2
HR issues
Mean scores
reat deal
Poor manager self-service capability
Technology issues
Lack of management encouragement to devo ve
Lack of role clarity
Restrictive HR processes
Time
Training
Line manager issues
Figure 17: What has restricted progress in the HR function? (mean scores)
Indeed, the great majority (72%) of respondents report
that their line managers currently take less responsibility
for people management than had been intended. The
reasons for this are thought to lie particularly with the
attitudes and abilities of line managers and to a lesser
degree with technology. Overall, the HR functions
themselves are seen as far less problematic.
It is likely that the general thrust of these answers reflects
the fact that respondents are themselves HR managers,
and very different responses may be obtained from line
managers themselves. Nonetheless, the results do give an
indication of the key obstacles to greater devolvement in
people management from the perspective of senior HR
managers. This can be seen in Figure 17.
Within line management, particular challenges are
thought to lie with the work priorities and time
pressures of line managers, which are cited as restricting
progress ‘a great deal’ by 47% and 43% of
respondents respectively. The skill-sets of line managers
are also thought to be a significant challenge, with over
half (55%) reporting that they restrict progress ‘a fair
amount’ and a further two-fifths (38%) ‘a great deal’.
Technological limitations are typically acknowledged in
the self-service capability for both line managers and
employees, in each case nearly 8 out of 10 respondents
(78% and 79% respectively) recognising that it restricts
progress ‘a fair amount’ or ‘a great deal’.
Performance measurement
Respondents were asked to indicate the ways in which
they measure five key aspects of HR performance.
The results are shown in Figure 18 overleaf. The most
measured aspects are the efficiency and effectiveness
of the HR function, with relatively fewer measurements
taken of the quality of the HR service, people
management practice and the impact of the HR
function on organisational performance.
Particularly common measurements of the HR function’s
efficiency are costs, business performance measures,
outcomes and ratios, each of which is used by half of
respondents. Outcomes and business performance
measures are also common measurements of the
effectiveness of the HR function, used respectively in
56% and 50% of cases.
The changing HR function ��
Figure 18: Ways in which HR performance is assessed
�� The changing HR function
The most common measurement of the quality of HR
services is line manager surveys (used in 53% of cases)
and hard outcomes, such as absence rates (46%).
People management practice is most often measured
through outcomes (56% of cases) and employee
surveys (47%). The impact of HR on organisational
performance is most often monitored through the use
of business performance measures (60% of cases) and
outcomes (55%).
Respondents were asked to rate how they think their
chief executives would score the performance of the HR
function in a number of different dimensions. The
results don’t show a great deal of variance, with the
majority of cases being rated ‘positive’ or ‘strongly
positive’. In fact, in almost all dimensions, half or more
of respondents think that their CEO would rate them
positively, and between a fifth and a third (21% to
34%) think their CEO would be strongly positive. The
exception to this is the quality of HR processes, which is
generally rated slightly lower. The mean scores of these
results can be seen in Figure 19.
Compared with 2003, the results have improved in three
areas – contribution to business performance, influence
on board decisions and closeness to the business.
–2.0 0 1.0
1.1
1.0
1.0
0.9
1.1
0.6
1.2
2.0
Relationship with the line
Contribution to business performance
Closeness to business
–1 = Negative 0 = Neither positive or negative 1 = Positive
–1.0
Ability to offer independent perspective
Quality of HR processes
Influence on board decisions
Calibre of people in function
Mean score
–2 = Strongly negative 2 = Strongly positive
Figure 19: How do you think your CEO would score the performance of the HR function? (mean score)
The changing HR function ��
HR skills and careers
Respondents were presented with a list of competencies
and capabilities and asked to identify which they see as
the three most important for establishing the credibility
and effectiveness of the HR function. They were then
asked to identify the competencies or capabilities that
they think are the most challenging to acquire or
develop. Table 7 shows the percentages of respondents
who indicated the various items given. It also compares
this 2007 survey with the 2003 one where the same
questions were asked.
The most important competencies are viewed as
strategic thinking (identified by 54% of respondents)
and influencing skills (51%). Business knowledge
(45%) and the ability to deliver against targets (40%)
are also commonly rated as among the most
important. In general, the competencies identified as
the most important are also identified as the biggest
challenges to develop.
There are differences in the results between the two
surveys, but similarities too. Given that these are not
matched samples, interpretation should be cautious.
The key changes are that business knowledge is
recognised as more important this year than in the 2003
survey, and, as to the most challenging, there have been
reversals in the ability to deliver against targets (less
challenging) and willingness to innovate (more so).
A range of methods are used to address skills gaps
among HR staff, including various modes of study and
training, work placements and recruitment (see Figure
20 overleaf). However, the most commonly used method
is sending staff on external training courses, reported by
more than 7 out of 10 respondents (72%). Other
common practices are CIPD study (57% of respondents),
and conferences and internal courses (both 52%).
‘Other’ training and development interventions used
include coaching and mentoring, job shadowing and job
swaps, networking groups and secondments.
2003 2007
Most important
Bill
( l iills)
Most important
Biggest challenge
these skills)
Influencing/political skills 61 64 51 58
Understanding of HR practices 26 10 27 8
Empathy/communication/listening skills 24 15 16 8
Leadership ability 35 26 34 34
Strategic thinking 46 48 54 53
Ability to deliver against targets 39 40 40 29
Business knowledge 32 34 49 38
Negotiating skills 11 19 8 11
Integrity 25 5 23 4
13 17 17 34
Table 7: Assessment of HR function’s competencies/capabilities (percentage scores)
Work area (to HR’s
effectiveness)
ggest cha enge
to deve op ng these sk
(to HR’s effectiveness)
(to developing
Willingness to innovate
�� The changing HR function
0 20
57
52
72
36
12
13
52
13
24
10
40
36
CIPD study
Short-term assignments
60 80 100
Percentage of respondents Base: 763
External conferences
External degree level study
Recruitment
Project working in other areas
Temporary cover
External courses
Internal courses
Other
Temporary cover
Figure 20: How are you closing skills gaps in HR?
Finally, respondents were asked how the changes they’ve
witnessed in the structure of the HR function have
affected careers within HR (see Figure 21). By far the
most often recognised effect is that it has created more
opportunity (cited by 65% of respondents) and a
substantial proportion of respondents also think that it
has become easier to move between HR roles (31%).
Various negative effects were also noted by some
respondents, including that it has become more difficult
to enter the function and for the function to develop
people, and that HR careers have become more siloed.
0 20 40 60 80
17
65
31
19
17
21
22
4
Percentage of respondents Base: 710
Made it more difficult to enter the function
Made it more difficult to develop people into new roles
Made it easier to move between HR roles
Created more opportunity
Made it more difficult to develop people
Made HR careers more siloed
Other
Made mid-career moves easier
Figure 21: How changes in HR structure have affected HR careers
The changing HR function ��
Conclusions
This report presents the findings of a survey
commissioned by the CIPD as the third phase of its
major two-year research study, ‘The Changing HR
Function’. The findings from this survey report feed into
the final Research into Practice report, The Changing HR
Function: Transforming HR (CIPD 2007). This final report
also includes findings from detailed interviews with
various case-study organisations. As such, the final
report aims to provide practical guidance to
organisations on how best to structure and staff the
function to achieve future success. The Changing HR
Function: Transforming HR? (CIPD 2007) will be available
to purchase from the CIPD bookstore in October 2007
(see www.cipd.co.uk/bookstore for more details).
�� The changing HR function
Background
Methodology
The questions used in this survey drew upon the
questionnaire used for the 2003 CIPD survey of the HR
function (CIPD 2003), the report for the first phase of
this project (CIPD 2006) and the case-study findings
of the second phase. The survey questionnaire was
devised in two formats, paper and online, for
respondents’ convenience.
A list of contacts for potential respondents was drawn
up with the aim of recruiting the most senior HR
personnel from UK organisations. Two-thirds (64%)
of responses were done on paper and a third (36%)
through the online questionnaire. Data was input
automatically from the online questionnaires and
manually from the paper questionnaires.
Respondents
The CIPD sent out 12,000 invitations to complete the
survey: 2,000 by email and 10,000 by post. A total of
787 people responded to the questionnaire. Of these,
57% class themselves as heads of HR functions and a
further 26% say they were board members (Figure 22).
The majority of the remainder describe themselves as
HR managers (8%), HR experts (3%) or business
partners (2%). The context of responses varied slightly
less, with 73% of respondents answering in relation
to whole businesses, 17% in relation to individual
business units and 10% in relation to corporate centres
or head offices.
The variety in the positions held by respondents partly
reflects the sizes of the organisations that they
represent. The median size of the units or
organisations represented is 824, although behind
this figure lies substantial variance: the inter-quartile
range is 2,650, with responses ranging from 1 to over
400,000 employees.
Respondents represent both public (43%) and private
(57%) organisations. Just over a third (36%) work
for multinational organisations.
The great majority (84%) of respondents are
CIPD members.
HR expert
Business partner
Head of HR function
2%
8%
3% 4%
Other
HR manager
Board member
57%
Base: 784
26%
Figure 22: Job description of respondents
The changing HR function ��
Acknowledgements
The CIPD is very grateful to all those organisations We would also like to thank Jonny Gifford from the
and individuals who gave their time to take part in Institute of Employment Studies (IES), who was the
this survey. author of this survey report for the CIPD.
References
CIPD. (2003) HR survey: where we are, where we are REILLy, P. (forthcoming) The changing HR function:
heading. Survey report. London: Chartered Institute of transforming HR. London: Chartered Institute of
Personnel and Development. Personnel and Development.
CIPD. (2006) The changing HR function: the key
questions. Change Agenda. London: Chartered Institute
of Personnel and Development.
�� The changing HR function
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Our aim is to share knowledge, increase learning and understanding, and help our members
make informed decisions about improving practice in their organisations.
We produce many resources on HR issues including guides, books, practical tools, surveys and
research reports. We also organise a number of conferences, events and training courses. Please
visit www.cipd.co.uk to find out more.
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