Editorial
Every decade or so, whether it's due to oil shocks, the impact of COVID-19 or transitioning to Net Zero, new challenges arise in the business landscape.
In response, HR teams swiftly mobilize to address them. A prime example is the reaction to COVID-19 in 2020. The global health crisis spurred a wave of digital transformation, where ensuring the safety and productivity of the workforce propelled the Chief Human Resources Officer (CHRO) into the forefront of the C-Suite's focus.
The implementation of hybrid working models also underscores the crucial role of HR. However, these evolutionary shifts come with a cost: namely, complexity and legacy. Our Global HR Capability Framework outlines 92 distinct competencies in HR, and still overlooks a few emerging ones. Throughout the years, HR functions have incorporated global corporate universities, HR tech and gig work. More recently, HR has swelled to include wellbeing and DEI. It’s a lot to manage, especially with the challenges of executing tasks across all these touchpoints.
Imagine this: a system capable of seamlessly handling tasks ranging from crafting hybrid work models and establishing a skills-based meritocracy, to modernizing your organization's hiring practices and reshaping jobs, roles and pay policies in the era of AI. Let’s be honest—the result wouldn't resemble the typical HR org chart.
That’s because the HR function has rapidly expanded into numerous specialized HR roles, each addressing new and distinct issues in the business. While I mentioned 92 HR competencies, it's worth noting that, in collaboration with LinkedIn, my team delved even deeper. We identified a staggering 250 distinct HR jobs and unearthed 400 unique HR skills, drawing insights from LinkedIn’s vast database. Our research proves that the scope and scale of HR’s responsibility is expansive and ever-evolving.
Our research also shows that 68% of HR organizations are far behind in their skills, operating models and technologies. There's a threshold to how long HR can sustain its current trajectory of increasing complexity, and I believe we've reached that point.
HR for a New Age
To streamline and adapt HR for the challenges of a new era, CHROs must welcome a new transformation. This necessitates a departure from the outdated "HR as a service center" model from the 1980s. The new business model is centered around cultivating and maintaining a dynamic, skills-based, consultative HR approach — one that is organized to bring together essential expertise and steer transformation and growth within organizations.
As AI-enhanced HR tech grows in popularity, it’s critical not to mistake the shift I am talking about as just adding another platform to the mix. Frankly, many HR transformation initiatives concentrate on technology, but our research underscores that technology, while significant, is not a standalone solution for achieving the next-generation HR success to which we should be striving for.
The CHRO must adopt a significantly bolder approach. If that sounds intimidating, then let me tell you the encouraging news: moving to what I call “Systemic HR” not only enhances the employee experience (EX) but proves highly beneficial for the bottom line.
In our study, we discovered that only 11% currently adopt Systemic HR practices. However, the organizations that do implement these practices are:
- 12 times more likely to accomplish high workforce productivity.
- 7 times more likely to adapt to change.
- 6 times more likely to innovate effectively.
- An impressive 9 times more likely to engage and retain the workforce effectively than their non-systemic HR peers.
These organizations are twice as likely to surpass financial targets and to delight their customers. The pattern of success is consistent among organizations such as LEGO, Mastercard, NewYork-Presbyterian, LinkedIn, IBM, Telstra, ING, REA Group, Advocate Health, SAP, Unilever, and others. For instance, TomTom, a developer and creator of location technology and consumer electronics, says it’s been working towards a systemic HR operating model, “and the benefit has been immense.”
Related Article: What HR's Top 5 Priorities Say About the Year to Come
Goal-Centered HR and a Goal-Oriented People Strategy
So how should organizations get started? Achieving a systemic HR operating model requires HR leaders to follow best practices, and it typically begins with strategy.
Systemic HR organizations need to develop a solid HR and people strategy that never deviates from the business strategy. When this is the case, it drives the most impact on your business, your people and the market.
For example, healthcare leader NewYork-Presbyterian said it wanted to improve the patient experience, expand its network and digitize across the system. The corresponding people strategy that resulted from these goals naturally centered on:
- Improving the talent pipeline, especially in clinical areas.
- Developing skills and capabilities for digital, AI and technology.
- Redesigning care teams for improved patient experience.
The important thing to note is that these are the relevant goals for NewYork-Presbyterian — your organization’s systemic HR goals will be different.
To become Systemic, HR needs to become a problem-solving team that deeply understands the business problems, challenges and opportunities; analyzes data and insights to determine solutions; and regularly reviews and updates its offerings to keep them current. It also needs to involve business teams in designing and implementing HR programs.
In NewYork-Presbyterian’s case, this meant that nursing leadership needed to be part of the design of a nurse skilling program that helps clinicians embrace AI in the hospital’s care protocols, and so on.
Related Article: It’s Time for People Practices to Become More Human-Centric
An Integrated HR Operating Model and Dynamic HR Work
Once the strategy is defined, HR needs to break down silos to address business problems systemically. Again, this is sector- and organization-specific. Using personas and employee segments to personalize HR solutions and offerings enables the HR team to create effective solutions. The solutions that work for nurses to develop digital skills won’t work for sales, and what pharmacists need is different from the requirements of the IT department.
Systemic HR organizations also build full-stack HR capabilities to develop HRBPs (HR Business Partners) to advise on all major aspects of management and talent strategy and enable them to act as senior members of their business teams.
HR needs to align dynamic work around problems. In a world of constant change, execution excellence or change management support is no longer enough. HR needs to change work for the future, not just execute on change management.
Conference
Sep
16
HR Tech Conference Las Vegas 2025
Register
Conference
Oct
27
Gartner HR Symposium/Xpo Orlando 2025
Register
Consider a company’s AI strategy, for example. If IT solely drives the strategy, it will fail at transforming work and roles, which is a massive opportunity that only HR can lead.
Employee-Centered HR Technology Is a Must
HR technology serves as a critical accelerator for progress toward systemic HR. The most successful organizations make the HR technology roadmap a key component of the company's tech roadmap, collaborating with IT or even taking ownership of their tech roadmap.
Finally, Systemic HR organizations are the ones already articulating a clear strategy to leverage AI within HR.
As a CHRO observant of the evolving landscape and future challenges, you'll have an awareness of the imperative to transition to a systemic approach as swiftly as possible.
While you may not have framed that imperative in the terms I have used, you’ll recognize that HR, unlike its personnel function predecessor, must evolve into a multifaceted profession encompassing design, consulting, technology and data.
Today’s environment demands HR teams equipped not only with technical proficiency but also with expertise in culture, leadership models and change management, enabling them to swiftly implement solutions.
The evidence suggests pivoting from service center to Systemic HR is the best way to do that.
Learn how you can join our contributor community.
