Download the free 2023 HR Operating Model Report to understand how companies worldwide are structuring and operationalizing HR. Get insights on COEs, HRBPs, and
Understanding the HR Operating Model Report 2023
The HR Operating Model Report 2023 is a comprehensive assessment of how companies are optimizing their human resources operating models today. Developed by The Talent Strategy Group, this report provides invaluable insights into the structural and operational aspects of HR across various organizations. It's an essential resource for HR professionals, compliance teams, and management seeking to enhance their HR functions.
What the HR Operating Model Report Contains
This report compiles data from over 200 companies worldwide, offering a robust representation across small, medium, and large organizations. Key areas covered include:
- The structure of Centers of Excellence (COEs) and their reporting relationships.
- The roles of HR Business Partners (HRBPs) and their interactions with COEs.
- Facts and insights regarding shared services organizations.
- Confirmation of the dominance of the traditional three-pillar HR system (Ulrich model).
- Data on CHRO reporting structures, with 86% reporting directly to the CEO.
- Insights into the expansion of HR team members across various functions, particularly Talent Acquisition and DE&I.
- Analysis of the relationship between HRBPs and COEs, noting moderated conflict levels.
- A hierarchy within COEs, with Total Rewards and Talent Management frequently reporting directly to the CHRO.
- Prevalence of formal, typically centralized, HR service centers (68% of companies).
- A critical finding that 6 out of 10 companies changing their operating model provided no training to help leaders succeed.
Who Should Use This Report and When
This report is highly beneficial for CHROs, HR Directors, HR Managers, HR Business Partners, and anyone involved in HR strategy and operations within manufacturing, especially garments, textile, and apparel factories. It's particularly useful when:
- Considering restructuring your HR department.
- Evaluating the effectiveness of your current HR operating model.
- Seeking to understand global HR trends and benchmarks (with caution, as noted in the report).
- Addressing conflicts or inefficiencies between HR functions like COEs and HRBPs.
- Planning for HR team expansion or talent acquisition strategies.
- Developing training programs for HR leaders during organizational changes.
How to Implement Insights from the Report in a Factory Setting
Factories can leverage the HR Operating Model Report 2023 to refine their HR strategies. For instance, a garments factory could:
- Review its COE structure: Assess if key COEs like Total Rewards and Talent Management are optimally positioned, perhaps reporting directly to the CHRO as suggested by the report's findings.
- Enhance HRBP effectiveness: Analyze the HRBP to employee ratio and consider training for HRBPs to improve their collaboration with COEs, aiming for the 56% 'largely or often worked well together' benchmark.
- Establish or optimize shared services: If not already in place, consider implementing a centralized HR service center to streamline administrative tasks, freeing up HRBPs for more strategic work.
- Prioritize training during HR model changes: If planning any HR restructuring, ensure comprehensive training is provided to all leaders and team members to facilitate a smooth transition and successful adoption of the new model, addressing the report's finding that 6 in 10 companies fail to do so.
- Strengthen CHRO's role: Ensure the CHRO is actively engaged at the executive level, leveraging their direct reporting line to the CEO (as seen in 86% of companies) to drive strategic HR initiatives that support overall business goals, including social compliance and worker welfare.
Related International Standards and Laws
While this report focuses on HR operating models rather than specific safety or labor laws, an effective HR operating model is crucial for complying with various international standards and local labor laws. These include:
- ILO Conventions and Recommendations: The International Labour Organization provides a framework for labor practices, which a well-structured HR model helps to implement and monitor.
- ISO 45001 (Occupational Health and Safety Management Systems): An efficient HR operating model supports the human element of safety management, including training, competency, and worker participation, which are integral to ISO 45001.
- Social Compliance Standards (e.g., SA8000, BSCI, WRAP): These standards, often relevant for garments and textile factories, require robust HR practices related to working hours, wages, child labor, and discrimination. A well-optimized HR operating model ensures these requirements are met and audited effectively.
- Local Labour Laws: In countries like Bangladesh, the Bangladesh Labour Act 2006 (as amended) dictates many aspects of HR, from recruitment to termination. An effective HR operating model helps ensure compliance with these specific legal requirements.
Frequently Asked Questions
What is an HR operating model?
An HR operating model defines how the HR function is structured, how it delivers services, and how it aligns with the overall business strategy. It typically involves COEs, HRBPs, and shared services.
What is the Ulrich model in HR?
The Ulrich model, proposed by Dave Ulrich, is a common HR operating model that divides HR into three main pillars: Centers of Expertise (COEs), HR Business Partners (HRBPs), and Shared Services.
How many companies participated in the 2023 HR Operating Model Report?
More than 200 companies worldwide participated in the 2023 HR Operating Model Report, with strong representation across small, medium, and large organizations.
What is the typical reporting structure for CHROs?
The 2023 HR Operating Model Report found that 86% of CHROs report directly to the CEO, indicating that HR leaders are definitely 'at the table' in most companies.
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