In multi-site organizations, you often have three fundamental HR models to work from:
- A centralized HR function
- Independently operating HR resources at each site
- A hybrid model (central control/guidance, with individuals in worksites)
But how do you determine which model is best for your organization? To do this effectively you need to do a quick “cost/benefit” analysis. Generally, in the case of centralization the costs will be less flexibility and the potential for slower responses. The costs of a decentralized organization cover lack of control (potential regulatory issues), conflict can arise when policies are not applied consistently across worksites.
Recently McKinsey covered a few key questions to help determine whether or not you should centralize a function:
In addition to these questions, you need to assess your ideal operating model, whether or not your organization has the processes and structures to allow the change, and lastly if your staff have the skills.
Organizational Abilities:
- Communication (Formal Vertical, Formal Vertical / Informal Horizontal, Two directions)
- Decision Making process, clarity, and roles
- Leadership / Management style
- Compensation and Total Rewards (do they support the new operating model)
- Business Culture
- Business Technology (not actual systems, but rather the method in which your organization delivers value)
Staff Competencies: Do employees and managers posess the requisite skills to properly perform in the new structure. Start by identifying the roles within the model, for example:
- Centralized HR: Specialists with consultation skills, pool of generalists, significant support staff, management has appropriate skills for any delegated hr tasks, significant effort to develop
- Independent HR: Ability to work Autonomously, strong business knowledge, ability to work across silos to ensure consistent policy delivery between hr professionals,
- Hybrid HR: These are excellent for large multi-site workplaces, and I will write about how Corning has managed to use this method to deliver high quality hr needs across their organization. Ultimately, for a hybrid to be successful there needs to be very clear lines and scope of responsibility as well as constant communication between the Centers of Excellence and site HR. Additionally, when executed well, this model allows the sharing of innovative or more effective programs that are piloted in the site hr organizations before before implemented across the organization.
While this was certainly not an all encompassing article on centralizing your HR function, I hope it helps with getting the conversation started. And, if this is something you want more information on (details on various structures for HR organizations to deliver) feel free to send me a message on LinkedIN.
Twitter: @FAPhoenix
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