Only one in three organisations deploys the key components of a high-performing HR service delivery model, according to a study from Mercer.
The HR Transformation Study – How HR Needs to Change surveyed 300 companies from across 26 industries. It found that just a third (35%) of organisations worldwide employ an HR service delivery model, widely known as the Ulrich model, that includes the three components of centres of expertise (CoEs), HR business partners (HRBPs), and HR shared services (HRSS).
The research claimed that this model is an attribute of high-performing HR functions, with 71% of the highest-performing HR functions surveyed boasting all three elements.
When it came to structure, 50% of HR in the firms were centralised while 15% were decentralised. The remaining 35% were a hybrid, with some decisions and policies deployed commonly across the organisation and some locally.
Only 17% of the companies polled said that they plan to change their existing HR model. However, 68% of the high-performing HR functions identified had redesigned their HR structure within the last five years.
Margaret Ruiséal, partner in Mercer UK’s HR transformation business, said getting the HR service delivery model right is crucial in light of the important role HR plays in supporting the future success of a business.
“Organisations are making changes to boost innovation and increase agility, which requires a significant culture change,” she said. “HR needs to be well-positioned to support these changes and ensure its priorities and practices are aligned to business needs."
She added that HR also needs to adapt its skillset and structure for the digital age. “There is significant opportunity for the HR function to grow its digital presence,” she said.
“HR functions need to enhance their technology and data analytics skills to strengthen their strategic decision-making and enhance their partnerships with business leaders and other functions. Creating a more digital and consumer-oriented manager and employee experience is fundamental to this shift and requires significant change management to ensure success.”