Published on 1st September 2008
The model was first put forward by Dave Ulrich, a leading HR academic, in 1997. The idea revolved around reorganising the HR function around three main pillars - a shared service centre, centres of excellence, and strategic partners.
Business Partnering was - and often still is - considered radical as it is a fundamental re-think of what HR is for, and how HR success is measured.
A Shared Service Centre is a single unit which handles all of the routine or 'transactional' HR services for the business. This is very often facilitated by an HR database or an HR Information System, a software solution that integrates the routine HR procedures. The idea of a Shared Service Centre is to provide low-cost HR administration, freeing up time for HR to become more strategic in its thinking.
The initial aim of the model has barely changed over the years. In the UK, one of the main drivers of change has been cost efficiency, with a Shared Service Centre providing low-cost HR administration.
In the US - and increasingly today in the UK - the aim has also been to adapt HR to modern business practices - i.e. to make HR fitter and stronger. This implies that HR is growing in importance, and as a result must be more strategic. The result of this was the creation of HR Business Partners who worked closely with line managers and departments to provide relevant HR delivery. By working more closely with line managers, HR are better able to understand their organisation and the challenges that it faces and therefore can deliver people activities that enable the business rather than merely support it.
Ulrich originally broke the model down into four roles:
Although over the years, Ulrich has modified the model, the basic idea behind the model has remained the same - to rebuild HR in order to face modern competitive business challenges, while making it more cost-efficient and accountable.
If a quarter of businesses say that the model has been ineffective, we can safely say that there is still work to be done if the Business Partner model is to be a success.
Indeed, Business Partnering on paper - as conceived by Ulrich - is different from Business Partnering in practice. Ulrich claims that many organisations have failed to implement their own models successfully. This can mean that they have failed to apply the roles correctly or the people in the new strategic roles have not been given sufficient training for the added responsibility. It can also imply that the lines of communication between the business and HR have not been sufficiently thought through.
Ulrich told Personnel Today that "HR has been woeful at knowing the business well enough. We still have people in HR that cannot talk to board members when they start talking about cashflow or numbers."
Highlighting the strategy aspect of his model, Ulrich reminded HR professionals that it was not "how HR can get into the boardroom, but what it does once it's there."
The reorganisation of an entire department is not something that can be carried out overnight. Shifting to an HR Business Partner model requires a certain amount of up-skilling and development, and a large amount of adaptation to each individual business. It also requires HR professionals who have experience outside HR. As Business Partners, HR has to see the rest of the business as 'customers', and therefore has to understand the customer's business needs.
Ceridian's Chief People Officer Karan Paige underlined the value of HR Business Partners with experience in the business as key drivers of a successful organisation:
Ceridian adopts this model internally. As an outsourcing company, we make full use of our facilities and outsource our payroll and HR administration to our modern HR shared service centre in Glasgow. Our Business Partners are aligned with functional teams and work with senior leadership team members to design and deliver people plans that enable Ceridian's strategic and operational objectives. 50% of our Business Partners have spent time in the operational areas of our business before joining the HR team. This experience is invaluable in enabling understanding of business challenges as well as designing practical solutions that are easily adoptable by our colleagues.Karan Paige, Chief People Officer, Ceridian
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