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The role of HR in driving work transformation

By Bill MacKenzie , Roman Weidlich and Yasmin Zolkefli | July 1, 2024

HR plays a critical role in driving organizational transformation and shaping the future of work.
Workers Compensation|Career Analysis and Design
Future of Work

Ways of working in organizations are evolving, driven by market dynamics and new skills requirements, and enabled by advances in technology. Automation of core processes and the use of AI to accelerate and inform decision making have served as disruptors as well as enablers, providing organizations with opportunities to increase operational efficiency and effectiveness, expand capabilities and accelerate speed to market.

This evolution has required organizations to enhance their readiness and agility to transform ways of working and embrace the potential that new technology can bring. But are organizations ready? Recent research conducted by WTW found that more than half of organizations said they feel prepared to manage multiple challenges around work transformation.

These challenges include managing:

  • Work efficiency and effectiveness
  • Talent attraction, retention and engagement
  • Scaling for growth
  • Diversity, equity and inclusion

However, fewer than 2 in 5 organizations think they are prepared to address reskilling and the impact of technologies and digital tools.

The common denominator in the long-term success of each of these work transformation areas? The human resources organization.

We asked our global Work, Rewards and Careers leaders, Bill MacKenzie, Roman Weidlich and Yasmin Zolkefi to share their perspectives on the role of HR in preparing organizations and workforces for work transformation.

How do you see HR supporting organizational design as well as workforce analysis and planning?

Bill MacKenzie: There’s often a significant role for a business-facing employee from the HR function (who are commonly termed HR business partners). The role is intended to fully understand the respective part of the business for which they are responsible, analyze the requirements of that business and then interpret those requirements on behalf of the rest of HR so that HR can ensure the requirements are being met.

In many organizations, the business partner role is intended to be consultative, advising business leaders and their teams on issues around organizational design and effectiveness. This consultative role also thinks through talent demand and supply, and specific skills among the critical segments on which each part of the business depends.

But there can be challenges with this model, for instance, if incumbents don’t have the right kind of expertise. Some organizations have implemented human resources business partner (HRBP) development programs to combat this and expand capabilities. But even with this in place, achieving that strategic role positioning and ensuring credibility with business leaders can be a long-term endeavor.

In these cases, an organizational effectiveness team within HR can provide strategic expertise, creating a center of excellence (COE) dedicated to supporting workforce planning and organizational effectiveness and design initiatives. Typically, this team is pulled in to assist with business segment-specific initiatives. For full-scale enterprise-level initiatives, it’s more common to leverage external consulting assistance, given the scale and complexity of the effort that’s often required.

Roman Weidlich: Building on that last point, today’s most frequent business challenges include scaling for growth, delivering on efficiencies and the drive for technological transformations. These can be exhibited in the form of CEO-led transformations across the organization that affect every aspect of the business.

Other changes might be smaller-scale but equally transformative, such as a commitment to diversity, equity and inclusion, or simply a commitment to getting better at attracting and retaining the right talent for ongoing business success.

Yasmin Zolkefli: Regardless of the reasons for organizational change, as companies evolve to stay relevant, HR plays a pivotal role in aligning the organization and workforce that’s required to gain competitive advantage.

This could include ensuring the required capabilities are translated into the structure through organization design or looking at workforce capital reallocation and workforce reconfiguration that catalyzes future areas of growth.

Bill: One thing to remember is that workforce planning can mean different things to different organizations. Typically, we’ve seen workforce planning processes focus on a particular talent segment, for example, research and development in life sciences, pharmaceutical or tech firms. But workforce planning really involves trying to understand the internal and external supply of and business demand for talent in specific segments, and that means going far beyond headcount planning.

Strategic workforce planning looks at the organization’s skills requirements not only today, but also in the future, then trying to forecast needs to target talent attraction and retention strategies. To accomplish this, the business turns to HR for a strategic level of support.

I’ve seen organizations get a bit too excited about the potential technologies that can help in assessing talent supply and demand and thereby risk over-complicating the workforce planning process. I find it best for organizations to pilot the process first, just using spreadsheets, perhaps coupled with labor data benchmarks. Technology certainly has its place, but there are often data integrity, availability and relevance questions to answer first. 

What’s critical for HR in order to effectively support the business?

Yasmin: Building on what Bill said about workforce planning going beyond headcount, it goes without saying that HR will need to invest time and effort to really understand the business, the operating model and the drivers of growth and value. This will be critical to identify the capabilities and skills required by the organization — in other words, establishing talent demand requirements.

This is where HR can leverage data to provide the necessary insights and recommendations so that the business can make informed decisions. And it’s not just about looking at internal data. Organizations also need to look at external benchmarks and data to bring in an outside perspective, especially when we talk about a future-ready workforce.

Roman: I agree with Yasmin; data really is helpful because it gives credibility to HR’s insights. Elevating HR’s role among senior leadership is important in supporting organizational transformation.

If HR only hears, “Please hire X number of people with these skills and do it quickly,” failure is imminent. In this scenario, HR isn’t a part of the bigger picture from the start. There’s no input into cascading the business requirements into required skills and capabilities, nor reflections on the existing labor market and talent that’s actually available and at what cost.

Bill: Exactly. The whole point of the partnership between HR and the business is to be proactive and forecast what the organization needs. Then, the rest of HR has a reasonable chance of being able to organize its resources to support that need rather than being caught off-guard and having to catch up.

I wholeheartedly agree that HR needs to bring data-based insights to the table to build their credibility. Gut instinct without data isn’t going to cut it with most business leaders.

How can HR get started in this strategic and collaborative direction?

Roman: HR needs to be a custodian of consistency and simplicity. Very often we see that, as organizations create new departments or functions, consistency and simplicity are at risk. Oftentimes, many jobs (as opposed to positions) that are created as new are already existing elsewhere in the organization (at least in the job catalog that HR maintains).

While there may be a different spin on a new job’s roles and responsibilities, HR is responsible for maintaining an independent and clear view on whether these newly requested jobs are required or if existing jobs will satisfy the need. This also applies to skills and competencies.

Many organizations maintain robust competency libraries, and we often see requests for additional skills and competencies to be added. But, on closer inspection, those requested new skills are nearly identical to those that already exist.

Obviously, jobs and requirements are evolving, so the business will require brand new skills and competencies. It’s down to HR to ensure that we aren’t creating something for the sake of saying we have something new.

Yasmin: HR also needs to ensure that these pieces – organization structure, job catalog, competencies — go together. We’ve had clients who struggle to do this; it can be a challenge because these areas tend to be led by different HR teams, not to mention that various HR data will reside under different custodians.

If you are asking how to make these different pieces talk to and complement one another, HR as a group will need to think about an overarching framework or architecture that can bring everything together.

How does the integration of technology in the workplace impact the way HR should approach organizational design and workforce planning?

Yasmin: The last decade has been a witness to technology making a significant impact on our lives and the workplace, both positive and negative. The latest technology disruption represents entirely new ways in which technologies are being integrated within businesses, with automation substituting manual labor for some tasks while augmenting others and creating new types of work. Essentially – impacting how, where and who does work, when.

As they introduce digital solutions to resolve manual labor, we are seeing companies struggle to move the workforce toward higher-value jobs with the aim to drive higher return on improved performance.

Shifting a workforce to high-value work will require reconfiguration of workforce with a renewed mix of skillsets, whereby reskilling and upskilling will be very important. If you know your business is going to investigate digital transformation to increase efficiencies, you need to think about how to quantify the impact from a workforce standpoint to see which jobs may need reinvention.

A successful transition to a new world of work will require well-coordinated efforts by both the business and HR — especially in coming up with the optimal solution between human and automation that takes into consideration sustainability of employment and minimizing job displacement.

Roman: Most organizations struggle to smoothly adopt changes in technology and the use of digital tools in their efforts toward higher efficiencies. Unfortunately, HR roles are often limited to upgrading the function’s own operations rather than playing an active role in the digitalization and transformation of the overall business.

CHROs and their teams are best positioned to navigate the business through these changes by upgrading their employees. This requires identifying and sourcing new talent with skills instrumental for the transformation. But equally important is to appreciate the existing employees with institutional knowledge essential for the business’ sustainability. With the eager focus on ‘the new’, one can easily underestimate the value of the existing staff. Current assets assessment, targeted re-skilling and preparation for change is often the difference between aspiration and transformative change.

Bill: When HR engages with the business, it becomes a terrific partnership with business leaders thinking strategically about the future rather than just tactically in the moment. And HR must have the tools to support such a robust process.

The next steps in work transformation

The dynamics of work are truly changing, and this will likely mandate greater flexibility, adaptation and innovation in the way we work.

Ready to transform your organization? Contact one of our experts today to harness the full potential of your workforce and drive strategic change.


Contributing author

Practice Leader - Work, Rewards & Careers - International covering CEEMEA, APAC and LATAM
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Associate Director, Work, Rewards & Careers
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