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Transforming the Operating Model: From Silos to Solutions

Updated: Jan 25

Transforming HR Operating Model: From Silos to Solutions

In today's rapidly evolving business landscape, the traditional siloed operating model is facing increased scrutiny. The popular Ulrich operating model, known for its functional nature, is being questioned for its ability to deliver cross-functional and integrated business solutions. As businesses shift towards more digital and adaptable models, the need for a new approach to HR operations becomes evident.


The Evolution of HR Operating Models

Business models are evolving to meet the changing needs of consumers, prompting a reevaluation of existing operating models. The Ulrich model, known for its siloed nature, is expected to transform into a new HR operating model aligned with organizational business strategies. This evolution is anticipated to commence in 2024, with siloed HR services giving way to fully developed and integrated solutions.


Impact: Deconstructed CoEs Become People Solution Areas

Design thinking and customer-first principles are shaping the evolution of HR practices. In this shift, traditional functional Centers of Excellence (CoEs) are deconstructed, paving the way for solution areas focused on delivering specific outcomes for HR's customers. Four key areas are predicted to emerge in 2024:


  • Strategy, Advisory, and Transformation: Focus on business transformation and strategic initiatives to realize the people strategy.

  • Awareness and Attraction: Focus on an integrated awareness and attraction experience based on employer brand, candidate experience, and onboarding.

  • People Experience and Culture: Focus on designing and implementing positive work experiences that appeal to all employees and create a productive and inclusive work environment.

  • People Growth and Enablement: Focus on motivating, developing, and empowering employees to achieve their potential and capitalize on internal opportunities.

These solution-focused teams will collaborate closely with HR units within specific business areas, actively participating in and driving the implementation of solutions alongside business HR teams.


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HR Action: Merging Critical Skills for Impact

As HR becomes more value-driven and business-centric, every HR professional is expected to understand where they can add value to the business. Business partnering, once reserved for a select few, will become relevant to everyone in HR.


Similarly, data literacy will play a pivotal role beyond traditional people analytics functions. The ability to develop hypotheses, set KPIs, interpret data, and communicate data stories will become critical across all HR roles. Organizations are encouraged to foster data literacy as a fundamental skill, breaking down traditional barriers between generalists and specialists.


New HR Operating Models: Agility, Fluidity, Adaptability

These shifts represent the initial steps toward new HR operating models. Built on contemporary organizational design principles, these models prioritize agility, fluidity, and adaptability. In 2024, we anticipate further experimentation within these changes. HR teams will increasingly adopt project-based delivery approaches, intentionally combining different skills to address current business challenges.


Conclusion

The transformation from siloed operating models to integrated solutions is not only a necessity but an opportunity for organizations to thrive in the evolving business landscape. By embracing these shifts in HR practices, businesses can position themselves as agile, adaptable, and responsive entities ready to meet the challenges of the future. The journey towards integrated solutions is ongoing, and organizations that actively participate in this transformation will reap the benefits of enhanced efficiency, innovation, and overall success.

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