HR: Maturity model and assessment for human resources function

05 January 2021 Consultancy.uk
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The effectiveness of human resources typically depends on the maturity level of the HR function. Understand the different stages of HR maturity and where your organisations sits on the scale is therefore important, providing the insights where performance can be improved and how.

Experts from KPMG share a maturity model (across four levels) and assessment for HR functions: 

Purpose and digital mindset

Organisational purpose and digital mindset are often treated as separate areas to address. However, in the most successful businesses, the digital mindset connects the core purpose and environmental, social, and governance (ESG) agendas to create a powerful architecture that uses real-time analytic and behavioural economics to nudge behaviour and keep the organisation on track to meet its objectives.

Level 1: Digital mindset is not clearly defined. Purpose and ESG all treated as separate initiatives. Inconsistent behaviour across leadership, no clear model for “the right” behaviours.

Level 2: A baseline definition of “good” is in place as well as a fix on where the enterprise (as well as HR) is relatively strong and weak in both mindset and behaviours. HR has developed its improvement plan as a role modelling opportunity.

Level 3: HR nurtures and grows both digital mindset and culture using the levers at hand such as performance management and reward for team based collaboration, as well as an agile matching process (marketplace) of skills available to the tasks that need doing.

Level 4: Digital mindset has taken root and links core purpose, digital, and ESG agendas as a whole architecture of powerful connections using real-time analytics – including adaptive initiatives and behavioural economics – to nudge behaviour.

Workforce insights and analytics

In early stages of adoption, workforce insights and analytics provide information about what is happening in different areas of the workforce at a specific time. Yet, at a mature stage, analytics can connect people data with business outcomes – enabling new ways of measuring and managing productivity and predicting future needs with greater accuracy. 

Level 1: Diagnostic capability: What is happening? Established reporting drawing on multiple data sources. The core HCM is the main analytics tool.

Level 2: Predictive capability: What will happen? Insightful data analysis undertaken by a dedicated Workforce Insight team using analytics tools beyond the core HCM.

Level 3: Prescriptive capability: What should we do? Hypothesis-based research on business issues affected by the people agenda. A detailed process for turning insight into action.

Level 4: Adaptive capability: Superior returns by X percent . Insight that connects people data to business outcomes. New ways of measuring and managing productivity. 

Workforce shaping

At the most basic level, workforce shaping focuses on identifying priority skills and roles, often in a way that is siloed from the development of the wider business strategy. HR organisations that want to become leaders should be aiming for a “Total Workforce” model that connects workforce shaping with business insights, employee experience design, and agile workforce management. 

Level 1: A plan to build workforce shaping capability is in place, pilot groups, and priority skills/roles identified. No formal integration between workforce shaping and business strategy/planning.

Level 2: Workforce shaping activity is in place on ongoing basis using scenarios sponsored by the business. A workforce shaping capability model is in place that connects relevant activities and information across the business.

Level 3: Business scenarios regularly updated by HR and the business, e.g., with business strategy function. Workforce shaping insights discussed at the leadership level and flow into initiatives and actions.

Level 4: A “Total Workforce” model is used by the business. It integrates workforce shaping with insights, experience design, and agile workforce management. An optimal balance of employee types can evolve over time.

Workplace and experience

Businesses can begin the journey to an outstanding employee experience by identifying “moments of truth” for different employee types and architecting authentic experiences that meet their needs. Crucially, the employee experience should mirror and reinforce the organisational culture and purpose – yielding engagement across the workforce.

Level 1: HR is PR. Enhance or build the talent reputation with employee communications across different channels and technologies.

Level 2: HR the marketer. Employee journey mapping used to identify “moments of truth” for different types of employees and solutions developed. Themes from overall brand inform HR practice.

Level 3: HR the designer. Architect authentic experiences that reinforce multiple employee value propositions (EVPs). Design thinking capability embedded in HR. Begin to use apps to augment experience, e.g., first year onboarding app.

Level 4: HR the architect. Sustain the employee experience design in the new reality so that it yields engagement across the “Total Workforce.” App development on ongoing basis. Employee experience design mirrors and an exemplar of culture and purpose. 

Enabling technology

Many HR organisations are hindered by disparate software, systems, and tools that are heavily dependent on manual intervention. Instead, businesses need to transition to an ecosystem of applications that connect data from across the business, enabling greater agility and more informed decision-making. Additionally, HR functions should seek to automate a high proportion of administrative tasks, which will free them to focus on value-adding activities. 

Level 1: Multiple systems, tools, and manual interfaces.

Level 2: Standard systems, interface layer, and recommended data models. Some connections between HR data and wider business data, e.g., customer experience. “Data lake” in place.

Level 3: Standard tools/applications, on multiple occurrences. Apps operate as an ecosystem to enable a total experience of people performance in a virtual/hybrid workplace mode.

Level 4: AI and machine learning moving from pilot to scale. Level 1 of HR service is automated using voice and chatbots. AI enablement of learning and recruitment. 

HR organisation of the future

Rather than taking an “inside-out” approach, characterised by policing adherence to policies, the HR function of the future will operate an “outside-in” model, which removes the boundaries between HR and the rest of the enterprise. In this new reality, the HR function has automated the more administrative tasks and is using business insights to continuously transform the employee experience while nurturing the wider purpose and culture of the organisation. 

Level 1: HR largely acts by policing adherence to policies. Ulrich model is the dominant mindset. HR initiatives based on HR best practices with inside-out mindset.

Level 2: Customer-centric, applying design thinking to meet the real needs of the business and customers of HR. Greater integration across CoEs so that a total system of workforce performance is created.

Level 3: “Outside-in HR” delivering workforce: insights, shaping, experience, and delivery. Agile and project-based working based on business issues. Prescriptive challenge taken to business leaders.

Level 4: “Boundary-less enterprise and HR” fully enabled by digital and cognitive automation with a focus on insight-driven employee experience. HR uniquely configured to drive business value and nurture core purpose and culture.