Introducing Systemic HR: A New Operating System

Welcome everyone uh to the long awaited session um very very excited about today's session several years ago when I made a career transition um to get into Human Resources I started doing research you know try just trying to figure out like where can I get the best talent information where can I get the best insights where can I find not just any data but data good enough for me to walk into an executive room and um be Influential and it was frustrating until I found Josh Bon's work um I think several of us you know

once we find Josh person's work and we understand the insights um we feel that we are well armed and well prepared to have any Talent conversation and to be able to influence Talent outcomes within our organization and so what we're about to here today is just more of that really rich and good data so super excited uh for today's Session um I'm thrilled uh that we have Kathy end enderis and Josh buron here today uh to help provide insights in the upcoming systemic HR a new operating model report that will be launching in December so

this is fresh off the press we are the first to receive this information so please take a lot of notes and um and afterwards there will be an opportunity to meet with both Josh and Kathy so be prepared to ask uh any follow-up Questions so as I mentioned most of us are already familiar with Josh and Cathy's work but I have to give Josh his due by um a little sharing a little bit of his bio uh Josh Bon is an industry analyst focing on focusing on the Global Talent market trends and Technologies impact packing

workforces across all Industries and segments as we all know his research is featured in Publications such as Forbes Harvard Business Review Fast Company Wall Street Journal and Many many many more he recently published his book irresistible in 2022 the Josh Bon company provides a wide range of research and services for HR leaders and teams as well as the Josh Bon Academy which today has approximately 50,000 members and offers C cohort-based programs for H our professionals Kathy enderis is a senior vice president and Global industry Analyst at the Josh Bon company supporting clients and the market

with Evidence-based insights on all areas of HR learning talent and HR technology Cathy has more than 20 years Global Experience from management consulting with IBM PWC and eny and there are many other alphabets uh letters of the alphabets that we have to make sure that we get in there for you Kathy um as a talent leader at mcken and Kaiser Permanente uh she also LED as a leader at messen and Kaiser Permanente and most recently Cathy LED talent and Workforce Research at deoe her passion is to make the world a better place work a better

place and more meaningful please join me with a warm welcome uh for Josh and Kathy to the talent connect stage thank you TW you're gonna meet Kathy in a minute so uh you are the first ones to hear about something we've been working on for at least two years maybe 15 years which is what can we do what what is going to optimize the HR organization Not the HR practice of this this this and this which we've been studying forever and ever but this whole thing that we call the HR function and as we were

thinking about it and trying to figure figure out what it is and what to call it and what to position it we eventually realized we're going to call it systemic HR and you'll understand why we came up with that name as we get through this um but the idea is that this is not a bunch of individual Domains and individual centers of excellence and individual professionals doing individual things this is a system this is a function that should be operating as an integrated system across the company to make the company more successful to make the

employees happier and more successful and obviously make the financial returns better so so that's a little bit of an intro um the way we do this research we're doing it in partnership with LinkedIn and Linkedin's helped us a lot is we talk to a lot of you you guys know us I'm sure a lot of you know me you probably know Kathy and others we hear about your problems you ask us questions we did a massive survey we've analyzed a lot of the data from the survey we we've interviewed a lot of you and then

we sit down and we try to figure out what is this all about and that's what you're going to hear about today but the reason we're doing it is because we have to and It has to do with the problems that companies face and so let me spend a couple minutes on that first then I'll go through the initial findings then I'm going to turn over to Kathy and she's going to dive into some of the details and just to give you a preview you don't have to take a photo of every slide there's going

to be a lot of information um you're h we're happy if you'd like to do that but um we'll be rolling out much more details on this over the next uh The rest of this year and then into next year because there's a lot of information uh that that's going to be interesting to you so you know this is a strange sort of economy we're living in uh if you look at the stock market short the little blip from the pandemic we've actually been on one of the longest economic growth cycles that I can remember

really the last true recession was in 2008 which is now 15 years ago almost almost 16 years ago I don't think You're going to find another period of time in the American history when we went that long without a recession and during that period of time a lot of things happened uh we had digital transformation of many many types more to come uh but amongst uh many of the things that happened in the digitization of our businesses is we started to redefine what industries were in and one of the things that we find when we

talk to a lot of you is the reason you're Interested in skills the reason you're interested in you know upgrading your hiring and career mobility and career development is because the company that you're in is trying to do something that it never did before and the reason it's trying to do that is that these industries are colliding with each other the retail organ the retail industry for example is getting into healthc care I think I mentioned this earlier in the session I was doing a a little while ago The healthcare industry is the largest employer

in the United States and it's expected to be 50% of of all the new jobs over the next 10 years so it's going to be even bigger because we're all getting older and we need more Health Care to kind of maintain our wonderful lives um so retail is getting into that but if you're a consumer packaged goods company and you make food or items that consumers buy and you used to go through the retailers the Retailers are building what white box label products and so now you have to go directly to Consumers so the cpg

industry is becoming a direct to Consumer industry the energy industry is obviously getting into solar and electric and batteries and Mining the car industry is getting into software I can go on and on and on and on it doesn't matter what company you work for there's something going on in your company that's forcing you to learn how To hire train managed pay um and take care of people that you've probably never done before and that's been part of this um Evolution and of course at the same time that's going on the CEOs are looking at

the financial markets which by the way haven't done super well this year because we're at the end of this economic cycle and they're saying we need more productivity we came out of the pandemic I want you guys back in the office I'm tired of you working from Home because I know you're better more productive at work in the office right because I know better than you do it's basically what they've been saying right the Microsoft research says that 87% of employees think they're highly productive only 177% of Executives think they're highly productive and so they're

bringing in more pressure and and just this last year uh PWC interviewed 2,000 CEOs and they said you know what yes productivity is important yes execution Is important but actually the most important thing for us is the transformation of our company into this new thing that we're trying to become whatever that may be in fact more than half of them said I would like to be spending more time on transformation and less time on execution and by the way we're going to release a piece of research later this year on leadership which shows that actually

that has affected leadership development and Leadership models and all sorts of things related to leadership well and then of course on the employee side quiet quitting burnout turnover uh retention issues I've never seen so much data on the stress and The Angst in a sense that employees have just this morning Kathy and I were reading Kaiser Permanente had the largest strike launch day that they've ever had K Kathy can talk about when she stands up here employee you know the UAW strike and so Forth so so this is a very um complex time to be

in HR it's not a business as usual time um and uh and I don't think this is going to get any better there's some things that are going to change in fact what's going to change the most and this is some research uh that you're going to see you know us next week when we launch this report we're doing at the Tech conference is in the middle of all of that we haven't been having as many Children people are getting married later or they're not getting married at all and so the size of the workforce

the number of working people and virtually every developed economy is either peaking or going to peak in the next decade so over the next 20 or 30 years you're not going to be able to find as many human beings to do the work you want to do this is what's been going on in Japan this is what's been going on in China it's now hitting northern Europe It's going to hit other developed economies and United States of course we have a lot of integration so we have other sort of factors that weigh in but we're

going to have the same problem so so you know HR as a function needs to be defined in a different way um and and so one of the things that drove us to do this research is looking at these issues that you guys tell us about all the time and we you know we're very very familiar with these because you know Kathy and And me and the other people in our company when we talk to HR leaders um we hear the same same thing over and over again it doesn't matter sort of which company it

is or how big or small or whether they're growing or shrinking we tend to hear the same issues um all of these things tend to come up over and over and over again and the thing that's interesting about these problems is none of them fit into one of the traditional domains of HR every one of these Problems are cross-disciplinary problems let's just suppose you do have a retention problem or you do have a problem hiring is it pay is it diversity is it man M skills is it training is it development is it career it's

all of that so we can't operate HR as siloed groups each optimizing our own little thing if we're going to deal with these problems so so so we didn't just dream up this project because we thought it was kind of fun to define the new role Of HR we we lived this and we've been watching this go on and we've been trying to observe what can we do and what can organizations do to adapt now part of you know the story here here before I get into the research is is where organizations are going now

the reason HR is in somewhat of a state that it is is because the history of organizations so let me take two minutes and walk you through the slide you're going to see this big white paper come Out next week on this um you know in the in the 15 16 1700s the way organizations uh operated and made money was they were mostly really groups of people and if you're a farm and you wanted to grow your farm you hired more Farmers so the more people we hired the more money we made and so hiring

was the way to grow and then we had the Industrial Age and we built machines and factories and all sorts of manufacturing efficiencies we Said well yeah we need more people but we need labor we need management and labor so let's divide the workforce into two parts management and labor and the labor is sort of replaceable we'll train them enough to do their job and the more we automate the more money we'll make and we'll grow the company through scale and that basically by the way is where a lot of the HR practices we have

today were invented they were invented in the Industrial Age I I entered the sort of HR domain in the early 2000s and every company I talked to at that point in time asked me exactly the same question how does GE do this because we want to copy them you guys are all a little bit younger than me but you probably remember that everybody wanted to go to cro and they wanted to talk about what Jack Welch had said and on and on and on and they were modeling the HR function after whatever it was those

brilliant guys did at GE and then all of a sudden We had the internet and then we had computers and then we had mobile phones and all these barriers between organizations and across organizations came down people started moving between companies LinkedIn was formed and all of a sudden you know if you were a manufacturer and you had this you know really nice company and everybody worked there their whole career all all your good ideas were going to somebody else and now we had to compete based on time To Market Innovation creativity and we realized we

don't need our employees to be labor we need them to be creators and inventors and problem solvers and so now we need a talent model where we need you know more skilled people and highly skilled people and even maybe we'll let people make decisions at the front line maybe we won't wait for managers to tell them what to do so we had to hire differently we had to pay differently we had to think about you know sort of the Whole Talent experience differently and now we're moving into a fourth era which is one the one

one that I think we're going to be living in for the next couple of decades which is we can't hire that many people there aren't that many to hire so we got to figure out the tools and Technologies to make every single person in this company even more successful than they were before and this is what the data of the economy shows is that if you look at the GDP per per worker it is gone it was flat during the agrarian age it started to go up during the Industrial Age and now it's skyrocketing because

if you use AI or use technology and you guys all know this because you're going through this in HR you can do more and more and more work if the organization is designed appropriately to allow you to take advantage of the science and the technology and the AI and so forth that you have and so what we're moving to is An age that I like to think of as the super worker where every worker is going to have vast amounts of information and tools and and uh other uh automation available to them and you guys

are going to get this right in your desktop from the co-pilot from the new tools from LinkedIn from the recruiter tools and so forth sales people are going to get it marketing people are going to get it manufacturing people and so forth so we've really got you know a lot of Things to deal with in HR now um ultimately the way this you know plays out is the way organizations are going to succeed with all of these Chang es is through what we call organizational Ingenuity and organizational Ingenuity is exactly what you guys are doing

today you are inventing new ideas new ways of working new new models new programs to adapt to this change however the HR function didn't start like this the HR function started as a bunch of personnel Stuff and so we've got payroll and clerks to take care of the back office and compliance officers in the in the early 1900s and then we said we need people to manage the factor so let's do use Labor Relations let's create training departments so we can train all these workers when they come and go because we you know because because

we've got all this labor to manage and then we said well wait maybe there's IO psychology maybe we should do you know a Little bit of analysis maybe we should survey people maybe we should do an annual survey maybe we should do a quarterly survey maybe we should figure out whether people are happy maybe happiness has something to do with how successful our companies are so let's create a bunch of jobs for that and then we said well you know we got a bunch of data let's use the data let's create a group of people

that look at the data about people and let's create a bunch of Jobs there so we created this new world of of sort of smarter and smarter systems and smarter and smarter um and then we said well you know that's all great but we really need to think about the Journey of an employee and so let's create employee experience and you know and you see where I'm going here is this profession that you guys are a part of is like a tree that keeps crowding branches right there's a new Branch here and a new Branch

there and and oh let's Come up with a job in you know prompt engineering for HR or whatever it is you know there'll be a new I'm sure H LinkedIn knows about whatever the new job titles are so so this profession that we're all part of which is a big profession and it's a really important one you know has grown over time to be this kind of complicated um you know uh you know tree of jobs and we just went through all this data with LinkedIn and we and we're going to show you what These

job jobs are in a few minutes and while that's going on and all these people are in these specialized groups in Coes often times isolated from each other by the way that's the problem with HR the problems are all systemic these are the things that I know you guys are working on these are the things that we hear from companies about all the time uh that cross all of those boundaries these are these are programs that most of which couldn't possibly be developed By one domain of HR so that's the idea of systemic HR is

how do we take this this you know this tree with lots of jobs lots of roles lots of skills and Stitch it all together so that they can operate as a problemsolving organization not just an organization that provides great service to the employees and Kathy's going to walk you through the maturity model and you understand what I mean now you know visually I I keep trying to think about How I was going to visualize this because you know one of the things I like to do is I'm kind of a visual thinker so if we

started with this with all the branches uh out doing their thing what we really want to do is we want to fill in the tree we really want to turn HR into this living breathing organic entity that thrives and grows and if you've ever read the book uh uh the life of trees you should read this book by the way it's an absolutely Unbelievable book trees are like living breathing communicating animals and that's the idea here is what we really want to have in an HR is we want to have all of the specialized roles

cross Tred as using the the t-shaped you know kind of career model working together on projects and initiatives and solutions to help the company adapt and change through everything that I talked about earlier that's what we're trying to figure out how to do and that's what This research is all about okay so that's a little bit of the background as to where we're coming from and I think we figured this out by the way I'm pretty sure that what you're going to see in the next part of this presentation is going to ring a bell

and you're going to say aha I kind of see where we need to go now before I get into that let me talk about the research so so what Kathy and I and the other analysts do and I want to give Kathy Credit because Cathy's done the bulk of the work here with another analyst we have in Europe um is we sit around and we hypothesize about this and we literally like a scientist we literally say well maybe it's this maybe it's this and then we go out and do surveys and we study it and

so we did a very large survey a lot of you may have participated in it we've interviewed dozens and dozens of chro we looked back at all of our other research Kathy's Going to show you the relationship between This research and all the other research we've done over the last you know 10 or 15 years and we've covered almost every industry and almost every geography so so there is a lot of data behind this and you're going to see a little bit of it but uh what we're going to try to do mostly today is

give you the the high level ideas so you can take it home and and think about it uh first of all this profession I Want to just take one minute and sort of Honor um all of you guys in the profession by the way I am not an HR person most of you don't know this I've never done HR I'm more of an analyst than a researcher but I I certainly know a lot about it um this is a uh a profession of probably 30 to 40 million people hundreds and hundreds of job titles primarily

uh female but not in all domains some domains are much more diverse um very Highly educated the education level of HR people is extremely high it was actually astounding to me how high the numbers are and the generally so so most of the people in this profession are Highly Educated very passionate people oriented professionals trying to add value in their company so we're dealing with we don't have problems with Talent by the way in HR we have problems of skills but we don't have a lack of passionate people in fact I think we Have sometimes

more passion than we have skills in HR to be honest um and here's how complicated it is so when I left deoy and I was first starting our academy uh keep companies kept asking me where's your competency model you know I I know Dave orich and I've read all the books on competency models and I thought you know we don't need a competency model we need a capability model what are the capabilities that HR people need to do these jobs well and we came up With 92 there's 92 capabilities on this and there's about 10

more we want to add when we get around to it so this is a very very complex domain because we're talking about technology um psychology organizational development and design learning training um all of the aspects of assessment I mean I mean this is a very complex profession so here we are in this sitting in these jobs dealing with some of the biggest problems our companies Face with the biggest skills shortage being ourselves and when I started our Academy I was surprised there were no really big hrms out there they just didn't exist I don't know

why that is because we're trying to you know fix that problem but we have to take care of the fact that most HR Transformations have to be done from the inside out we can't just reorganize the HR department and assume everything's going to change if we're not reskilling and Continuously developing and training ourselves in the HR function so you'll see this as part of the systemic model is that all the pieces have to fit together but all of us has to kind of know a bit more about what the other parts of HR do in

order for us to add enough value in this much more problem oriented problem solving domain and here's just an example of the data that came back from the the survey um I'll let Kathy walk through this more but you Know when we were walking through this data the last couple of months I kept noticing this number seems so low why is this number so low why is this number so low did did we Analyze This correctly you know there's a lot of capabilities missing now the reason this is missing is not because people aren't smart

it's not because people aren't working hard it's not because we don't have great ideas it's because we're living in an old operating model the history of R was Were the Personnel department or the compliance Department were the service delivery department were the center of excellence Department you tell us what you want we'll do it for you you have a problem well we'll call the right specialist and send them over to talk to you we never built an HR function over the years that could adapt and consult and learn and and leverage technology the way we

have to today so so as you'll see and we actually have a couple Clients here in the room who are actually sort of living this world and and and you know we'll we'll introduce you to them a little bit later is that these are these are symptoms of a profession that is about to change and it is changing and that's really what this research is all about so one thing we did and and I'll let Kathy talk about this in a minute is when we go through these these surveys we ask companies about I don't

know there's 89 100 Questions in these surveys and we ask companies to rate themselves in different areas and then we group the questions into categories and there's essentially six um functional areas we studied we studied the strategy part of HR the operating model operating model means how do we actually do things who does it and how do they work together um how dyamic is the HR function how much mobility and so forth inside the function is there um how consultative Can we be how quickly can we adapt to a particular problem when it's new and

it comes up in a new part of the company in a region um how flexible is the structure and uh what is our technology stack and you can see in the dark blue the things that matter really have to do with cross domain expertise skills strategy and alignment with the organization um de thinking about the employee experience at the beginning of everything that we Do some of the things that you guys know about uh but under the covers we have to build a much more adaptable organization to do that and here's sort of the highle

findings and then I'm going to turn over to Kathy in a minute so um of the many things that we looked at the way we do this research is we statistically cluster all of these questions against each other and we try to figure out where the relationships are um related and then we Build a maturity model that Cathy's going to show you in a minute and as a part of doing that we look at all of these practic I and we figure out which ones seem to be driving the highest correlation to three things financial

performance human Capital Performance and Innovation and this is the top 15 things the first category has to do with your ability to align with what the business is trying to do at a very senior level That's not just the chro having a seat at the table that's the HR function being able to literally deliver on the big strategic initiative that the company cares about and I don't just mean skills skills is our problem the CEO's problem is we need to get into this new industry and we need to build market share skills are the way

we might do that but that's not the pro the sea level problem the second level is the operating model how quickly can we adapt Do we understand the problem that we just heard about can we bring people together in HR and solve the problem quickly or is the Coe sitting around you know says well we'll get to that next year because we're too busy implementing workday this year and we'll do that later um Etc so that's the second area the third level is the solution design how do we develop things how do we iterate on

things do we have a product manager or a solution manager to monitor The performance of one of these HR programs we built do we get good data back from our employees and do we iterate on it uh are we working with the Technology Group and doing that then there's the issue of our own professional development how are we training HR business partners are we rotating people around inside the HR function do we bring people from outside of HR into HR by the way most HR departments don't rotate into and out of HR it's very rare

but actually that's a very big best practice is to professionalize HR so much that it's a career path for people who aren't in HR to come into HR and figure out how complicated our lives are and for us to go see how complicated their lives are um and then of course Tech and what we found found in Tech is where we are today is if you're not good at Tech you're not good at HR Tech is not a nice to have Tech is instrumental and Critical to your success so this is just a little bit

of the high level findings and ultimately the big you know sort of story here as I show you uh turn over to Kathy and talk to about the maturity model is that the big transition that has to take place is exactly going back to those four evolutions of the economy is we have to redefine the HR function as not a service delivery function not a compliance function not an operations function but a problemsolving Organization it needs to look much more like a Professional Services organization and much less like the 1980s it department and unfortunately when

I look at the operating model of HR and I'm not trying to B down on it um a lot of you have designed HR departments that look like a 1980s it Department call us when you have a problem we'll take a ticket for you and we'll send somebody out there and we'll fix it that is not what companies need Okay um and one more thing I'll turn it over to Kathy so we have a lot of sort of visuals and um you know stories when you look at this because it's such a big sort of

complicated topic it affects a lot of things it affects your strategy it affects your technology it affects what your business partners do it expects the Coes do we need Coes Maybe not maybe we have combined Coes maybe we have networks of Excellence not centers of excellence um do we measure ourselves By time to service do we measure ourselves by cost of higher or do we measure ourselves through a business measure that might have to do with the performance and success and growth of the business right I mean we could go through this line by line

and you'll see that as you start redefining what you do many many of the things change and if you look at what a you know sort of evolved HR organization looks like you can see that it just operates Differently and you know we talk to a lot of companies and you know many times the company knows that there's a problem we have an old technology or you we're not organized well or we're too inefficient or we have too many people doing this and not enough people doing that and then we talk to somebody else and

they look different and this is just a sense of what this is about and I think this what in the middle HR is a place to learn is a big part of this in The 20 years or so that I've been an analyst every year I see an accelerating set of new topics hitting you guys that weren't there the year before and so if you're uh sort of function or profession but your team isn't able to quickly adapt and learn something new and by the way AI is a perfect example of that then you do

tend to fall behind Okay um so so that's sort of the high level intro to this let me turn it over to Kathy now and Kathy's going to Take you through the maturity model and give you some more specifics I told you guys this is GNA lot of be a lot of material so stay tuned all right Kathy turning over to you oh one more thing I just want to point this chart out here come on come on my here so here's another piece of evidence we looked at the growth rate so we have a

capability model we have an academy we have an assessment you guys hopefully all join and we looked at the Companies that the highly skilled HR people work for those companies are the fastest growing companies and that's what this chart shows is the companies that are growing at 15% per more per year have a significantly higher number and higher level of capabilities in HR and I don't know if that's a cause or an effect but there's a direct relationship there so this this stuff really really is bottom line not just good for us it's good for

the business okay Kathy over to You thank you Josh thank you well this was fantastic of course so it's always a tough act to follow Josh but I'll keep going on a lot of different things about our maturity model so first I want to talk about where we are today so this is based on the survey that we did as Josh said there were over a thousand companies that participated in a survey we had about 3,000 verbal comments too so for everybody who's given their thoughts and their input thank you um This is what came

out what is HR really good at we're really good at being a collaborative HR leadership team you see the highest rated items here on the on the in the blue side where it says the H leadership works really well together we know each other really well the chro works well with the CEO as well uh which is all great um Cho has a good role a strategic role so H leadership being at a at a good level seat at the table if you want uh but are we really utilizing The seat at the table as

much as we could have and on the right hand side you see the lowest scoring items of all the 105 practices that we studied um 105 of them um lowest scoring item and Josh talked about it too is 3% only 3% of organizations actually rotate people in and out of HR 3% so basically bringing people from HR into other areas of the company and then back again when we interviewed the head of HR for a very large tech company that's Global um he Is the head of HR in Europe he said to me um I

was running the business actually as the president in Europe and I was always complaining about HR so they made me be the head of HR so I can fix it right and that's a great strategy because then he really had to understand and learn about it um and but hardly anybody's doing that like having the HR role actually is a leadership role that a president came into the CH role is a very forward thinking approach of the CEO as well um and I I obviously I I spent some time as you heard Pia um in

as an HR leader but I've also worked in Consulting before so I came from Consulting then I came into a child and I'm now now more into a Consulting and research area again I think the point being is if you rotate people in and out of each other they understand your business better and they can bring all of these practices into into the HR function and just think about it in a Different way and understand the business better 4% only 4% of organizations have a fully defined um a Ai Ai and HR strategy and I

know um I was just talking with Josh yesterday when we go into this conference season if you get a dollar for every time we hear AI adhr it's we're going to be rich right um but only 4% of companies have a defined Ai and HR strategy um so the point here is we're on the right track but we're not quite getting there um so Let me talk about a maturity model and the way this maturity model works we always do these four level maturity models actually the first time I met Josh I asked him why

do we have four levels why not three or five and Josh said well three was not enough and five was too many so so that's but the PO Point here is really the four the level four is the highest level of maturity this is what hardly any company is doing but it's something to Aspire to those Are also the level four companies are the companies that have the best business outcomes they're financially growing they they Delight their customers they have great engagement retention of their employees they innovate better they have more productivity all of the

the great stuff that you want as an organization U level one companies less so right level one companies less so so let me walk you through that maturity model um level one Companies are those companies that focus on transactional compliance we call this transactional compliance because this is kind of the HR police right that's the HR police keeps you out of trouble defends the Organization for legal risk makes sure that nobody breaks the law we don't want to get sued we don't want to have any employment lawsuits any of that um basically it's not very

forward-looking obviously HR operates as a cost center so what it means there is Of course when you're the CEO and you have a cost center you want to minimize cost at all costs right you're so going to try to cut HR costs all the time how this works from an operating model is usually a lot of duplication and fragmentations you might have the VP of HR for one business unit and we'll talk more about that um and they have they have maybe all the functional domains reporting to them and then we have another duplication in

another business Unit maybe another geography then we might have some shared services or not and at some point when you have a cost that's operating like that you got to look at this is the CEO and the CFO and say there's too much being spent too much duplication we have all these HR systems all these HR capabilities ac across the globe maybe we should should do an HR transformation I when I was in Consulting at the beginning of my career I worked actually on all of these HR Transformations and we called them Transformations but really

what they were about was more technology enablement of the HR function to take cost out and we had the service delivery model right the 80s ' 80s it Department as Josh calls it where we said okay maybe we should do some shared services maybe we should do some combined things where we do all the technology stuff together on the same system maybe we have the level the tier zero that's Basically Employee Self-Service and tier one when you have a problem you go to the employee call center that the service center and if there's more problems

or the problems is more complicated go to tier three which is the Coe so we stood up all these Coes and then we said there's also the H of business partners that are going to be embedded in the business and if you look on the side actually here you have what percentage of companies are at each Stages um level one 39% of companies are at level one so that's a lot of companies that are on level one and it's not just small companies by the way you might think this is only the smallest companies and

as they grow they go into level two it's not true so we have a very even distribution of companies of all sizes Industries is a big differentiate I'll talk about that in a little bit where you at that the maturity model but level two companies Are those that focus on efficiency um Service delivery answering the phones uh solving the the problems like the ticketing problems that people have uh reducing cost reducing duplication good quality but better cost efficiency basically not so much about the Strategic forward-looking thing this is your typical um Service delivery model that

probably many of you have right U so 29% of companies at that stage and by the way the stage is build up so you Can't say well we are done with legal compliance of course you're still going to do legal compliance As you move up the chain right so when you level two company when you're um at the efficient Service delivery model kind of stage of course on as you want to move up the chain you don't say well we don't do good quality service we don't do Service delivery anymore we don't answer the phones

anymore when people have a question of course you still got to do That but there's something fundamentally different as you go to level three companies we call that solution Centric and you might read through through solution Centric and problem centered and it might sound the same right what's the difference between solution Centric and and problem centered it's actually actually not exactly not the same at all so let me give you an example of what solution Centric means and what problem Centric means solution Centric is the United States Postal Service they are very very efficient about

delivering mail right but did they invent email did they invent slack did they invent teams of course not right they optimizing the solution that they have which is delivering physical mail so that's an example of a solution Centric company that's super efficient about what they do um like optimizing their solution problem Centric is Netflix Netflix is a problem Centric company because they Started with the DVDs and are they in the DVD business anymore not at all right they didn't just optimize the DVD uh distribution business they are now in the streaming business because their problem

that they're having is not Distributing DVDs it's at all it's creating entertainment for people right get getting anti payment to people the way that they want it so that's the difference between the solution Centric companies that usually From an HR operating perspective they have product managers they create really great products um they kind of add a product management layer a solution Center layer over the the regular alri kind of Service delivery model um the problem centered organizations and only 11% of companies are that um the problem oriented level four companies they think about every problem

in a in a fundamentally different way so that when they get a problem they reorganize teams Quickly around that they have solution Cent or problem centered teams that come together from different functions from different areas the recruiting um Cee or the recruiting people might come together with the learning people with the mobility people with the Dei people employee experienced people to really figure out how to solve that problem how to um for example create like fill a skill Gap or a talent Gap that you have in one one area a turnover problem that You might

have in another area it's never just one Coe it's never just one area that has to work on that so level four companies they really operate more like a consulting company they operate and I used to be in Consulting so I know how they work they have actually very very simple um organizational structures very very simple job models very simple they have six levels of consultants and then they have the partner that that's usually how all of them work so they Don't have all these different hierarchies all these different job models they have specialization but

people when I started actually working in an organization somebody told me this is going to be your manager and I said well I don't really care because in Consulting there's there's not even the context the concept of a manager at all in Consulting you have the project project manager that leads the project and with them you work for the the Period of time that you have a project and then um you move on and you go to a different project but of course in most organizations that's not the case at all and that's also not

how most um HR organizations work so this is kind of the maturity model and we've spoken with so many companies um every company is on a different stage and as you think through that you can probably guess where your company is at there probably hot po it's probably a mix of all of This right um so you probably think as I describe all of these different maturity levels you might say oh in some areas we seem to be in level two but maybe we're already going into level three and maybe we're already going into level

four but sometimes we are in level four and maybe we go back to level one as I just had a conversation with um the C of of TomTom actually who is one of our level four organizations that we are we have portrayed in this study so this is our Maturity model and so how are we doing on on um evolving to this maturity model well let me talk a little bit about how progress is going I see here the prog is slow and uneven the reason why I say it's slow well first the good news

maybe first the good news uh when we worked with LinkedIn and actually this is based on it's going to blow your mind the the numbers that this is based on from LinkedIn it's based on 7.5 million HR people um and their profiles and their Roles and their skills on LinkedIn and we asked the team at LinkedIn which was fascinating to go back five years and then go go compare that to today how many skills were in the HR profession and how many many roles different roles did they identify in the age of profession in 2017

300 skills 200 roles that's a lot already right pretty complex pretty pretty pretty big 2022 400 skills 250 different roles so what that means is the function is Getting more complex but they're also more strategic more strategic in the way that when we looked at what the new skills are what these 50 new skills are that came aboard a lot of leadership skills that we have highlight here but then also a lot of kind of new disciplines more strategic disciplines Dei for example Total Rewards employee experience um Talent Development Talent Mobility those kind of new

things that don't fit into one of the traditional More traditional kind of buckets of HR those are evolving so that's really great so why am I saying that progress is slow and uneven well the bad news is when you look at all of the roles that are trending up like the roles that are rising fastest and the roles that are declining fastest uh on the left hand side you see the roles that are rising fastest and a lot of these roles are actually very administrative in nature you have like payroll accountants you Have administrative assistance

those kind of roles Rising really quickly while on the right hand side you see that the H business partners and strategic advisor roles and recruiter roles as well are falling the quickest so what that tells us is as they economy maybe it's economic growth might be uh slowing down people F organizations focus more on Administration and less on the Strategic value so that's kind of a little bit of a problem if we're saying The only way that HR can take the business forward is when we are the Strategic Consulting business partner U to the the

CEO and to every kind of cite leader and every leader in the organization um Industries are also very widely distri distributed I told you about um from an organizational size we see pretty even distribution of uh maturity across the board from the smallest two organizations all the way to the largest organizations the same Actually holds true for the different geographies not a lot of differentiation between um the different geographies but you see wide variation between the different Industries on the left hand side you have the industries that are least Advanced and on the right hand

side of the industry that are most advanced and when you look at the industries that are most advanced you see Industries like professional uh Services Uh consumer products for example even Health Care is pretty far up the chain and the reason for that is those are the people Centric businesses that really know you you can't really survive in business if you don't have and if you don't have good people and if you don't focus on your people um on the other side of the fence is more like government in retail is is way down the

fence because they haven't made the switch in for the most part to think About our people is really are really the biggest differentiator I know everybody puts it on their website and says people are greatest assets but are they really operating the AG of function in that way and the answer is not so much so that's what we say it's both slow a little bit one step forward and two steps backward and um pretty unevenly distributed who is doing this well so if your name is not up there doesn't mean you're not doing this well

These are just the companies that we talked with that we feel are doing some great things we have LinkedIn on here as well because I know you're doing some great things too of for example combining the the talent acquisition CE with the Learning and Development Coe to really like help people work in problem Center teams not in their functional um silos as well um the the other part that I wanted to mention as you look at all these different different um names up There it's every geography it's every industry really that you can be good

at um we have a couple of healthcare companies we have the LEGO Group which is a great example actually of how they are transforming the HR organization as well uh Master Card for example is also doing some really Innovative things unil um so the the point here being um lots of different examples of of Excellence has anybody totally figured it out probably not right everybody's on a Journey everybody is maybe going a step forward and a couple of steps backward as well okay so that's the first one the first Insight was um we um progress

is going but it's not that fast as we might have it to be well let's talk about how you get there let's talk about the first point uh of how you get there first point is how you measure measure the success of the HR functions really drives your H strategy and and really drives what you focus on and we see a Really clear distribution and like it almost looks like we made it up but we didn't right because it's such a clear differentiation on the light blue you see here uh those are the companies that

focus on business growth business outcomes as the key success measure how you measure the success of the HR uh function uh whereas um the orange one means like engagement and retention of people uh the um the green one is net promoter score and those kind of Measures of how satisfied people are with hr's services and the dark blue one is basically efficiency cost saving measures and as we would have expected um a lot of the level one companies that are those that the cost cost and cost center kind of companies um are focused on efficiency

or maybe net promoter score of um of basically employees and managers with the services that H provides versus the level four companies you see the huge jump of this blue light Blue area where they are all focusing about the success of the HR function as the success of the business itself uh when I interviewed one of the C Rose of a very large um healthc care system here in new New York actually he said to me I can't just measure the U the success of our function by engagement and retention of people the only way

I know we are successful is the business succeed if we deliver great care to all of our patients and are still financially Viable and that's the only way we can measure our success so how you measure your success really drives how you organize around it as well so knowing what you're accountable for and who drives these business success measures really really important the other thing that I want you to say about the operating model and we talked a little bit about that too uh operating model on and the different levels kind of um can we

can visualize this here and and the Level one companies that do the transactional compliance you see all of these disconnected dots right you see all of these people that are doing their own thing nobody really knows what anybody is accountable for you have lots of duplication not a lot of connection at all so we didn't draw any connections between the very fragmented operating model um and then you go to level two where you bring it all together and bundle a lot of things and create the Coes and create the sh services and create uh like

the business partners um so you see a lot more basically moving towards the center a lot more centralized um and organized and role Clarity which is great right uh but not a lot of flexibility not a lot of slack when you say well the problems are changing so fast as Josh said too right the problems changing all the time um when you're in these rigid kind of centers how can you reorganize very very Quick quickly and align to the problems and to solve them that's what kind of the level three companies already go to so

you see these dots move a little bit away from the center and also some connections so you could say for example you might combine some CES you might create some connections between the different HR business partner teams you might even create some Pro product manager teams that like there's a product manager for maybe the onboarding Product where somebody for the the learning product there's somebody for the Performance Management product to look end to endend for the the success of these products and solutions and then um level four companies we call them systemic and consultative because

they really operate very very easy easily connected way connect all the different Coes help people also um align to business problems bring these agile teams together to solve those business Problems um and it's it's going quite well alth Al though not quite as well as we might want to see this this shows you um how how important each of these um colums like we call them elements that Josh showed as well how important they are to the outcomes as well as how far along companies are well first when you see look on the right how

far along companies are how good they are not very good right but the best the best the area where companies are best at is Having consultative HR jobs so jobs are changing and the roles are changing but we don't we haven't quite figured out how to build the structure around it the operating model around it the organization models around it because 30% of companies are good at at building consultative AG jobs but only 15% are good at um reorganizing the work itself or um having supporting technology as well 14% or less so only half of

the companies that are good at it um at the Consultative jobs are actually good also organizing around it so lots of work to be done to to think about the operating model the organizational model in a different way okay so let me talk a little bit more about how you solve business problems so we said HR is all about falling in love with the problem and solving the right business problems in uh in your company um how do you do that well the the approach that we have come up with and and Josh talked about

It before as well we call this the fourr framework and the forarm framework goes like this when you have any business problem for example in we studied the healthcare industry um and we identified they have a massive gap of nurses not not surprisingly I think um probably everybody has heard about it and we identified one in three nursing jobs actually in the US will be open if companies keep go Healthcare companies keep going as they've been going and so If you try to solve that problem that nursing gap or any skills Gap any Talent Gap

that you have with a recruiting alone I guarantee you won't get there right because there's just enough of people Josh talked about how we will have less people how we have less um just headcount to to pull them from not even having the right skills but having enough people won't get there of course you're going to do recruiting but you're going to do it well and you're going to Think about location strategies and Predictive Analytics on what jobs will be open and everything else and skill-based recruiting so we got to do recruiting but recruiting alone

won't solve any of these problems you also have to think about of course how you retain the people that you already have how do you help them stay with your company longer um in the healthcare industry we identified some of the the the healthcare so basically you got to Think about retaining people you also have to think about reskilling people that's the Learning and Development side of course as well you got to think about how do you res skill people for these new for the jobs that you need to fill and that could be in

the in the healthcare industry for example they are even reskilling people that are not clinical into first level nursing roles and having care Pathways built in and then also maybe the biggest the biggest Area would be the redesign of the jobs themselves and we hear a lot about Job redesign now with AI how do you need less people to begin with if you don't can't get enough people how do you redesign the jobs how do you think about bringing in technology and and helping people basically to not focus on what they don't have to do

but focus on basically what we call top of license work that the work that they have uniquely is skilled that they uniquely Skilled to perform well so that's the 4r model I talked about the healthcare stuff and thanks for for telling me to to speed up a little bit Josh um this is how we think about actually when we studied all of we studied each of these buckets each of these are massive domains we have learning development we have talent acquisition we have uh pay and rewards and pay equity and Leadership and on and on

and on every single thing that you can think of in HR When we studied all of these things over the last few years uh we always do these maturity models that the point here is to look at all of these together and say what we we found out when we looked at all of these different maturity levels was level four companies are the systemic companies these are the in each of these disciplines so the systemic learning approach is actually we call this um basically growth in the flow of work it's not just doing training and

Learning and Development really well but helping people grow and be internal Mo have internal mobility and everything else uh you see every single domain basically has to be part of this systemic approach bringing them together in this systemic way not just optimizing for the function that you already have okay and I know a lot of you are in recruiting right a lot of you are in Talent acquisition are maybe in learning when we looked at each of these Disciplines as well in this survey we asked them questions about how do you work basically intent acquisition

in rewards in Learning and Development what we found out we rank these dis from most transactional to most systemic what we found out was fascinating the disciplines that are older and more kind of traditional less less systemic than the ones that are maybe newer like employee experience diversity and inclusion Talent management orc design tend to be more systemic because they have to be because they were developed actually in a way that they are systemic by Nature right diversity inclusion for example you can't do without integrating with Talent acquisition with Learning and Development with rewards for

pay Equity all of those kind of things so that was kind of interesting and another another Insight I have for you um specifically on ta and Learning and Development I Broke them down even further to say of each of these levels of HR maturity how um systemically are they operating and you see actually that Talent acquisition even the level four um HR companies that are really those sophisticated it's systemic HR companies only a quarter of them operate in Talent acquisition in a systemic way where they work in Talent acquisition with Learning and Development with uh

talent management with uh rewards and Dei to actually Solve business problems and the same similar sit scenario actually holds true for the Learning and Development function as well so every function actually has to participate every function has to um kind of uh work together with other function and what that means of course when you want to do that you got to build these what we call full stack HR capabilities as well so you can't really participate and solve Problems when you're in Talent acquisition for example that also have a learning component if you don't understand

a little bit about learning as well right and when you're a learning person you got to understand enough about Talent acquisition to really understand is this now an internal Mobility Talent how do I pull on the like Talent acquisition kind of theme skill-based coing for example all of those kind of things um and that holds True for every single discipline as in hii as well holds true by for the hi business partners too by the way so the H business partners really also have to be kind of these full stack H business partners and as

we compared in our H uh capability model as we compare the at business partner roles of the high performing high growth companies with everybody else we saw that the high growth companies have different different capabil ities that they're Strong in and this is from our HR capability work where we saw that the most differentiating capabilities B for HR people are working with leaders developing leaders and managers orc design change in communication um those kind of more strategic forward-looking capabilities building those in the HR business partners specifically is critical because otherwise how can they solve your

operating model challenges if you have to move into another business Area if you have to like reorganize the organization all together uh building those capabilities most of the like the rest of the companies that are not high performing are stronger at more legal compliance even creating onboarding programs or something like that with the HR business partners where they can't really add the highest value so really thinking about how do you build these HR capabilities and build them well this is from our study with LinkedIn as well Where we said for each of these four R

models what are the common skills that they have and the good news is there is actually a lot of skills overlap already um and capability overlap already as you see in the middle here um so skills like recruiting a lot of recruiting skills but that are also talent management skills Learning and Development skills the the functions the disciplines the Coes are getting closer and closer together from a from a capability Perspective as well this is also I wanted to show you this so I'm glad we're getting to this as well this is also based on

all of these data points that LinkedIn has from their data set and it might look a little bit confusing so let me explain how this works this is uh each of the dots are rolls um and these are in a nutshell not all of these 400 roll or 250 roles but this is like combined some of these roles and the way that are clustered they clustered Statistically basically uh with the underlying skill set so we identified and Linkedin identified there's six clusters that that um that emerged here and you see what the Clusters are that

talent management and and learning a Di and and um Talent acquisition of course and AG of business partners total rewards and payroll and you see that most of these kind of um planets or I don't know countries there um overlap with each other which means the skills Are already getting closer together you also see though that Talent acquisition is a little bit out there right so that's a little bit of a problem that Talent acquisition is not one of the ones that are really overlapping so lots of work to do as well to move Talent

acquisition specifically a little bit closer to having not just the like the Deep specialized skills because you still need them you don't you don't forget about the Deep specialization but You also need the like when you think about the team you also need the the crossbar basically of the team so building these capabilities U let me just show you one more thing and then maybe we'll wrap it up okay so how does it look like how does this look like from an operating an organizational perspective uh we um outlined based on and these are actual

operating or organizational structures of the top level organizations uh of level one Companies level two level three and level four level one companies they have uh a lots of duplication they have the VP of HR for each of the business units and they might have some shared Services HR operations HR technology up down there level two you actually get the chro actually gets more direct reports not less because then you have all the Coes right you still probably have the HR business partners senior HR business partners for each of the business units You have a

lot of the different Coes that you typically have like six or seven of them and then you also have somebody ahead of H shared services H Tech um and H operations so the the uh the the structure actually gets deeper and at like more complex and more um more like functionally oriented in a way at level two then at when you move to level three there's a lot of consolidation that usually happens so a lot of times then you have ahead of all Of the H business partners that's on top of all of these VPS

of head heads of um hrbps um so you see this here in the yellow then you have a lot of times you have this consolidation going for the the cues so you might have um one head of global head of maybe the chief Talent offic so that has all the CE maybe they don't have rewards a lot of times maybe rewards comes later and then you have still the shared services kind of stuff and then when you move to the level four And this is actually an like an actual um kind of or chart as

well all of these are actual or charts we won't tell you who it is but um you might have more pulled Services you then you have actually a lot flatter structure if you look at how many direct reports the the chro has at this time because you might have all of the Coes kind of combined and people being cross trained and cross skilled and more pooled the same with the HR strategy and HR business partners People being cross trained cross skilled on that and then probably also some consolidation going on in the in the shared

services where you have the H operations also working with the H technology and with the um with the other shared services function to design and and implement this thank you Kathy um you guys so I I was just telling to basically this is a workshop we just did in an hour and a quarter but um we're going to Be publishing a lot more on this there's just an amazing amount of actionable stuff here um we want to help every one of you in any way we can we're going to be working through Linkedin we're going

to do a lot of things on our own um so stay tuned um and you know if you want to take advantage of some of this IP immediately our Academy is available right now you can join our Academy you can learn all sorts of stuff like this and we want to thank thank you for your Attention and we'll be here Kathy and I'll just hang around for a half an hour during the break if anybody would like to come ask us questions thank you very much thank [Music] you