HR and tsunamis: time for a new model?

Newsletter articles

21 Dec 2017

HR Insight Issue 25

Professor Paul SparrowPaul Sparrow, Emeritus Professor of International HRM, Lancaster University and IES Honorary Fellow

Thirty years after strategic human resource management (HRM) ideas hit the UK, does the HR function need to rethink its purpose and structures again?

Tsunamis become important when those inside organisations are busy looking down, getting the job as they see it done, fixing things, and digging trenches to shore up their organisation’s ‘resilience’. Behind their back, seen by those in the trenches but not by them, there is a huge tsunami on the horizon, rapidly approaching. Will the structures hold, or is it time to flee the trenches? Well, I think it is time to start digging faster, but also to build some new structures to a better design. Allow me to explain.

The HR function has always had to manage tensions that exist across two agendas:

  • The looking-in agenda, where we try to align the thrust of people management to the organisation’s strategy, business model, and the performance challenges that this creates.

  • The looking-out agenda, where the HR function helps the organisation adjust its people management to the actions of the agendas of institutions, and social and technical change.

HR and tsunamis: time for a new model?

When the strategic HRM model first came in, we had just observed a wave of social change, and had experienced the competitive restructurings of the 1970s and 1980s. The challenge that remained was to realign people management to the new strategic realities of the organisation. In this, HR did pretty well, Adopting an internal service model (the Ulrich model) to tidy up and monetarise the activity of HR into that of business partners, centres of expertise and e-enablement (of the more transactional parts of service delivery) made as much sense to those in HR as it did to other service centres, such as IT and finance. However, two new challenges have now arisen.

  • In a more networked and collaborative business structure, we are seeing a new organisational effectiveness context for HR that extends increasingly beyond the organisation. We need to rethink how HR should play in this new horizontal space. The solutions to all of today’s performance challenges – productivity, innovation, and customer centricity – are cross-functional. They need a bringing together of expertise from all the core management functions, and collaboration with outside institutions.

  • The tsunami is getting awfully near now. We are moving into a world that is going to need radical and collaborative interventions as a range of disruptive technologies, from the internet and digital platforms, to knowledge-work automation and 3D printing, will blow apart many existing business and service models. At a societal level, these near-term developments will create paradoxes and policy debates around purpose, globalisation, democratisation and fairness. These are debates to which HR will simply not be allowed to turn a blind eye.

It is time to start building HR’s capability and structures now for this new world. I believe that if we look at some of the experiments HR functions are already making, it provides us with some clues about how HR can build its capability and structures. At the moment, there seem to be three options:

  1. Creating a place in the structure for dedicated HR project resources that can be assigned to more strategic activity. These professionals become the ones equipped to work on the cross-functional projects aimed at dealing with business problems such as productivity, innovation, globalisation and so forth, on an as-needs (and business-funded) basis.
  2. Partitioning the HR function, with one half (or proportions determined on your business model) being aligned to the 'internal' world (your own organisation) and the other half being aligned to the other business partners, strategic alliances, collaborations, and external institutions that you need to both work with and influence.
  3. Creating 'integrator' roles within the HR structure that operate across internal and external businesses, designed to bring together the new expertise and provide leadership around that expertise.

We must move away from the days of adopting 'one size fits all' HR structures and instead find the people with the educational wherewithal and network-building skills to establish meaningful projects and interventions.

This article draws heavily on Paul Sparrow’s presentation at the IES annual conference 2017, which considered the future of HR and people management.

View all forthcoming IES events