This article explores how HR can lead to AI integration while preserving these human foundations of work.

Contents
The hidden risks of the growing AI adoption
Why HR needs to lead AI integration and capability efforts
What a human-centered workplace looks like in an AI world
Making human-centered work a strategic priority for HR

The hidden risks of the growing AI adoption

It is easy to get swept up in the excitement of AI’s promise. The technology is already reshaping how work gets done, from generative AI tools that write job descriptions to algorithms that screen resumes in seconds. However, while the benefits are significant, so are the risks, especially if we focus solely on efficiency and ignore the broader implications for people and jobs.

While concerns about bias and unethical AI use are valid, the conversation must include more systemic implications of how AI shapes our organizations and society.

Productivity gains may come at the cost of engagement

Globally, AI could displace up to 300 million jobs, with 47% of workers in the United States alone at risk of being affected by AI-driven automation. One in four CEOs anticipates job cuts due to generative AI in the near future, while 30% of workers are concerned about their jobs.

Despite AI’s potential to boost productivity, we must also remain mindful of its impact on the meaning people find in their work. Global employee engagement levels are already in decline, and if AI is implemented without intentional design, businesses risk creating future roles that lack challenge, purpose, and fulfillment. The result could be a workforce that is more efficient but less inspired and invested.

“I’ve seen the pictures—and you have too—of robots on Amazon lines, moving large packages from one conveyor belt to another, being able to track their movements precisely. They’re part of the supply chain now. They’re not human; they don’t talk, they don’t call in sick, and they show up every day. I think that’s resonating with leadership. One company said, ‘We’ll make the $70,000 investment—this pays for itself in a year or two. We don’t have to pay benefits.”

Professor Marc Miller

Short-term decisions are backfiring

OrgVue’s research reveals that many CEOs are experiencing AI regret, second-guessing decisions made to replace human work with artificial intelligence. In the UK, two in five businesses (39%) reported making redundancies as part of their AI adoption efforts. Yet, over half of those organizations (55%) now admit that those decisions were misguided.

Many companies have faced unintended consequences rather than unlocking the anticipated gains in efficiency and innovation, such as internal confusion, increased employee turnover, and a decline in productivity. These outcomes highlight a critical lesson: AI decisions must be guided by long-term thinking and organizational foresight, not short-term cost-cutting or hype-driven expectations.

AI risks increasing inequality and anxiety

Beyond the headlines, we also need to understand that displacement due to AI is rarely evenly distributed. Younger workers, lower-income employees, and workers of colour are disproportionately worried about the future. The promise of AI has, for many, become entangled with feelings of insecurity, inequality, and exclusion. 

This is especially important as AI adoption risks deepening existing inequalities. In contrast, in high-income countries, as many as 60 percent of jobs are considered automatable, compared to just 26 percent in low-income economies, leading to increased anxiety related to AI’s impact on skilled labor. 

These disparities are not just societal concerns. They have direct implications for how organizations adopt and scale AI. If left unaddressed, they risk breaking down trust between employees and employers, leading to increased fear and anxiety towards AI and undermining the goals AI is meant to serve. This is where HR’s role becomes critical.

Why HR needs to lead AI integration and capability efforts

HR is uniquely positioned to play a critical role in how AI is adopted in organizations. No other discipline holds the mandate to align technology with people or the responsibility to balance organizational priorities with workforce wellbeing. As AI becomes embedded in how organizations hire, manage, develop, and engage people, HR must lead its adoption, not just for productivity gains but to preserve the human essence of work.

HR’s role is to drive the implementation of AI solutions that improve efficiency and service delivery while safeguarding employee experience, trust, and inclusion. The challenge lies in ensuring that innovation serves people, not the other way around.

“It’s the human aspects—the organization has to be human-centered. It has to be the kind of environment that makes someone want to join the company. And HR sits right at the center of that through recruiting and branding.”

Professor Marc Miller

What a human-centered workplace looks like in an AI world

The term human-centered is often misunderstood as opposing performance or technology. However, a truly human-centered workplace does not reject AI; it integrates it thoughtfully to protect psychological safety, amplify purpose, and deepen connection. 

HR is the custodian of this balance. It must set the tone for how AI is introduced, communicated, and experienced across the organization, balancing decisions to drive business results with human implications. A truly human-centered HR function uses AI to enhance, rather than replace, the human aspects of work. This involves applying technology thoughtfully to reduce friction, support better decision-making, and personalize employee experiences, all while preserving human connection.

For instance, AI can efficiently manage repetitive tasks such as scheduling interviews or analyzing employee feedback data. By automating these routine activities, HR professionals can focus on high-impact, high-touch efforts like coaching leaders, facilitating inclusion dialogues, and shaping experiences that build a sense of purpose and belonging.

However, when AI is applied without consideration for the human experience, the consequences can be counterproductive. Some organizations, for example, have experimented with using AI to replace managers fully in the performance review process. These initiatives often backfire. Employees resisted being evaluated solely by algorithms and strongly preferred maintaining a human relationship with their managers. They see AI as a tool that should assist managers by reducing bias and supporting better insights, not as a substitute for human judgment and connection.

Making human-centered work a strategic priority for HR

For HR to lead AI in a human-centered way, you need to embed five key principles within all HR activities. Each of these supports the broader goal: making sure technology supports people, not the other way around.

1. Build psychological safety into your AI strategy and address fear proactively

Across all AI efforts, HR should aim to create psychological safety for individuals. This means that employees feel that they have the space to voice their concerns, process disruption, and participate in shaping the future. HR can enable open dialogue and create forums for listening, allowing employees to express their fears and concerns. 

Transparency and proactive communication also play a critical role in building psychological safety. Research shows that only 32 percent of employees feel their organization has been transparent about how AI is used. This lack of openness undermines trust and reinforces anxiety.

Employees want to understand how AI is being used, who benefits from it, and what safeguards are in place to ensure ethical, fair, and inclusive practices. That’s why HR should avoid vague or overly technical messaging in employee communication and involve teams early through pilots and feedback sessions.

Also, executive leaders should openly discuss their plans for adopting AI and influencing jobs in the future, as well as their plans for reskilling or transitioning employees.

2. Build an AI-ready workforce

With 120 million workers expected to retrain in the next few years, HR must lead the development of new learning pathways and career transitions. It’s essential to go beyond the intent and principle of reskilling and be more specific in terms of:

• Which jobs will be in focus, and how the organization is segmenting and prioritizing workers who are currently in those jobs
• What skills will be required in the future, and what paths to develop these skills entail
• What the investments required to transition the workforce into these opportunities are, and if the organization is willing to invest these numbers into its workforce.

Upskilling and reskilling efforts haven’t always prioritized AI. According to a TalentLMS and Workable report, only 41% of companies include AI skills in their upskilling programs, and just 39% of employees say they use those skills in their roles. This gap highlights the need for a more holistic approach—one that goes beyond training to include opportunities for real-world application, alignment with business needs, and clear links to growth and recognition.

3. Audit AI systems for fairness and inclusion

HR needs to partner with the Risk Management, Compliance, and Legal teams to conduct realistic audits of AI systems to evaluate them for fairness and inclusion. The results of these audits should show how AI initiatives are intentionally inclusive and highlight where AI initiatives might be unintentionally excluding specific groups.

For example, how AI is adopted can lead to exclusion and perceived unfairness. A global financial services firm adopted AI tools for client insights and productivity, which were rolled out first to senior consultants and head office teams, giving them a significant edge in performance and visibility. Meanwhile, regional teams and junior staff received delayed access and minimal support, limiting their ability to benefit from the same tools. This uneven implementation widened internal inequalities, creating a digital divide within the organization.

4. Redefine the value of work

AI can help eliminate low-value tasks. HR should use this opportunity to elevate roles focused on creativity, empathy, and collaboration, the parts of work that technology cannot replicate. HR should rethink work design and intentionally design for meaningful work that improves engagement, wellbeing, and job satisfaction. 

Meaningful work also balances the individual’s need to be challenged and feel like they are contributing to work that adds value to the business objectives and strategies.

AI offers a great opportunity to completely reinvent work design, and HR needs to lead the efforts to ensure the responsible adoption and implementation of these principles.

5. Create guiding principles for ethical AI use

Establish internal policies that prioritize consent, transparency, and data dignity. Data dignity means treating people’s data with the same respect as the individuals themselves, ensuring they have visibility, control, and fair benefit from how their data is used.

These principles should guide all decisions around AI deployment in the workplace. While most AI policies today focus on basic compliance, HR has an opportunity to go further by helping shape policies that are grounded in human-centered thinking, not just minimum standards.

The future of HR and work is more human, not less

There is a growing narrative that the future of work is digital, fast-paced, and AI-powered. That may be true, but it is incomplete. The future of HR must also be deeply human.

As technology becomes more powerful, HR’s responsibility is not to abandon the human side of their work but to amplify it. This means using AI to unlock time, insights, and possibilities; not to replace judgment, empathy, and connection. 

AI is an opportunity to elevate the human aspects of work, not replace them. HR is key in shaping authentic human-centered organizations, making sure that as AI is integrated, connection, thoughtful work design, and values like dignity and inclusion remain at the core.

The post Putting the ‘Human’ Back into Human Resources: How HR Can Protect the Human Side of Work appeared first on AIHR.

To support this, organizations have been adopting new ways of working that enable faster decisions and improved speed-to-market for their products and services. These modern organizational design models center around creating autonomous teams that promote transparency, accountability, and ownership. Yet, while many companies aspire to adopt these approaches, few implement them effectively.

In this article, we explore three modern organizational models that enable team autonomy as a way of working and highlight the role of HR in guiding organizations through this transition.

Contents
Why is there a growing need for team autonomy?
Understanding different levels of team autonomy
3 modern organizational models designed to enable autonomy as a way of work
Common pitfalls and challenges of autonomy-driven organization models
The role of HR in preparing the organization for the transition to increased team autonomy

Why is there a growing need for team autonomy?

Market disruptions, technological innovation, and shifting customer expectations have created a business environment where stability is no longer the norm. Organizations are under pressure to adapt more quickly, deliver value faster, and stay competitive in industries where change happens in months, not years. In response, many have explored new ways of working designed to support faster decision-making, greater flexibility, and more substantial alignment with client needs.

Yet despite significant investment and effort, many organizations struggle to move away from traditional and hierarchical operating models. McKinsey highlights that only 30% of organizational transformation programs achieve the expected outcomes, with failure often rooted in misaligned and outdated operating models.

These legacy organizational models are characterized by rigid hierarchies, functional silos, and slow decision-making that often inhibit autonomy with teams having to follow strict protocols to make decisions and get work done.

If organizations want to work more autonomously as part of their design, a new way of working is required, demanding a change in how leaders operate and how teams are structured. As the pressure to deliver business value intensifies, leaders must reexamine what and how they transform to organizational designs that promote team autonomy. Success will depend on adopting operating models that are adaptable, integrated, and purposefully aligned with the intent of fostering an autonomous way of work and culture.

Understanding different levels of team autonomy

With businesses shifting toward more autonomous ways of working, it’s essential to understand the different team structures that support varying levels of autonomy.

The following comparison outlines four common team models—ranging from traditionally managed teams to leaderless teams—highlighting how leadership roles, decision-making, and team dynamics evolve as autonomy increases.

	Traditionally managed teams	A designated manager or supervisor directs the team’s work, makes key decisions, assigns tasks, and holds accountability for outcomes.
	Self-managed teams	Self-managed teams have a degree of autonomy but operate within parameters set by the organization. They manage day-to-day operations, assign tasks among themselves, and are responsible for meeting goals, but they still have a team leader or report to management for strategic decisions.
	Self-directed teams	Self-directed teams organize around a set goal or objective and have a high level of autonomy to make decisions regarding work, roles and leadership.
	Leaderless teams	A group in which no single individual is designated as the formal leader. Instead, leadership responsibilities are shared among team members or emerge organically based on expertise, context, or need.

Note: The Blue dot depicts the positioning of the leader in the team. A form of leadership exists across all four of these team models. However, leaders’ roles differ significantly, as do the decision-making rights assigned to these individuals, whether formally or informally.

We discussed self-managed teams with Bex Hewett, Associate Professor in Human Resource Management at Rotterdam School of Management, Erasmus University. Watch the full interview here:

3 modern organizational models designed to enable autonomy as a way of work

Giving teams more freedom isn’t enough to build real team autonomy. Organizations need to set up the right structures that make autonomy sustainable. Recently, several organizational models have emerged that rethink how work gets done, who makes decisions, and how teams are supported.

Below, we explore three organizational designs that use autonomous work as a core principle. Each model supports autonomy in different ways, and the degree of self-management or self-direction varies depending on how the model is applied in practice.

Operating as a networked organization

Networked structures replace rigid hierarchies with fluid, interconnected teams emphasizing lateral collaboration. Practically, teams are organized into teams based on criteria such as specialization or location. However, multidisciplinary teams from across these various areas can deliver the work and fully leverage the organization’s resources when work needs to happen.

This model thrives in environments where cross-functional work is critical, such as design firms, consultancies, or global HR functions. Expertise moves dynamically across teams, often supported by communities of practice.

For example, DEI, talent, or learning specialists might work across business units rather than be tied to a single function. While networked models boost agility and innovation, they also require clear decision rights and shared accountability to avoid ambiguity, coordination overload, and slow execution.

In networked organizations, teams are usually self-managed and sometimes self-directed, depending on how much autonomy individual nodes or groups are given.

Working in agile and tribe-based structures

Popularized by technology companies like Spotify, this model organizes work into small, autonomous teams (squads) grouped under broader goals (tribes) and supported by shared capabilities (chapters) and learning communities (guilds). It’s designed for rapid iteration, tight feedback loops, and customer-centricity.

In HR, an agile ‘People Tribe’ might include squads focused on onboarding, mobility, or performance. These squads test new ideas in sprints and iterate based on feedback. While agile boosts speed and employee engagement, scaling requires strong governance and team alignment to maintain cohesion.

Teams are generally self-managed in agile organizations. Some squads or tribes may operate as self-directed teams in more mature setups.

Organizing through holacracy 

Holacracy is a decentralized organizational model that distributes authority across self-managing teams known as circles. Each circle functions as a mini-organization with defined roles rather than job titles and is responsible for its governance and operations. Roles within circles have clear purposes and accountabilities, allowing individuals to hold multiple roles across different circles. 

Through structured governance and tactical meetings, circles can dynamically adapt their roles and processes, enabling the organization to respond quickly, reduce hierarchy, and foster agility and transparency.

Teams in holacracy are typically self-managed and often self-directed, with clear roles but distributed authority for decision-making and governance.

The comparison below shows the different features of the three organizational models side by side to help you understand which model could help you build team autonomy.

Common pitfalls and challenges of autonomy-driven organization models

While models such as networked organizations, agile tribes, and holacracy offer clear advantages in speed, flexibility, and ownership, they are not without challenges. There are several recurring pitfalls that can hinder success:

Autonomy without clarity

Empowering teams without clearly defined roles, responsibilities, or decision-making boundaries can lead to confusion, duplicated efforts, and gaps in accountability. Clarity is critical to prevent chaos in networked or holacratic systems, where roles are fluid and authority is distributed.

Hidden hierarchies and informal power structures

Even without a formal hierarchy, informal influence and legacy power dynamics often persist. These can undermine transparency and trust, particularly in holacratic environments where decision-making is meant to be decentralized. Leaders must actively address these invisible dynamics to enable distributed authority truly.

One-size-fits-all application

Not every team or task is suited to self-management. Highly regulated functions, crisis response teams, or roles requiring hierarchical oversight may need different structures. Misapplying models like agile or sociocracy across all teams without considering context can lead to friction or inefficiency.

Inconsistent implementation at scale

Modern organizational models often show early success in certain parts of the business but struggle when expanded across the entire organization. Agile squads, for example, may perform well in product or tech teams but face challenges when applied to functions like HR or Finance, where the nature of work and decision-making processes differ.

Organizations face fragmentation and misalignment without thoughtful coordination and a shared operating rhythm.

Leadership misalignment and resistance

Shifting to self-directed teams demands a fundamental rethinking of leadership. Leaders must transition from controllers to coaches, enablers, and system stewards. Many struggle with this mindset shift, which can lead to micromanagement, unclear direction, or undermining team autonomy.

The role of HR in preparing the organization for the transition to increased team autonomy

HR is critical in enabling organizations to transition toward more autonomous work. One key priority is reimagining organizational design and helping the organization choose a model that fits its purpose and context. HR must help organizations understand the benefits and limitations of these models and the implications of adopting these ways of work. 

Equally important is equipping leaders and teams with autonomy. HR should champion a mindset shift from control to enablement, thereby helping leaders adopt a coaching approach and empowering teams with the tools, rituals, and skills needed for self-management. 

To make these new ways of working stick, HR needs to evolve alongside the organization. Core practices like performance management, rewards, and talent development must be redesigned to shift ownership, accountability, and growth closer to the teams themselves.

For example, performance management needs to focus more on team outcomes and continuous feedback; rewards should recognize team contributions rather than individual successes; and talent development should support flexible, self-driven learning paths.

Practices like transparent governance, real-time feedback loops, and adaptive policies are critical in reinforcing these shifts, helping teams make decisions faster and adapt more easily while preventing the organization from slipping back into traditional, top-down ways of operating.

A final word

As organizations adapt to the new challenges of the hyper-turbulent world of work, the ability to build true team autonomy is becoming a defining advantage. HR is responsible for this shift, designing systems, structures, and leadership practices that support flexibility, faster delivery, and greater responsiveness.

To sum up, building true team autonomy isn’t a one-time effort; it’s an ongoing commitment to rethinking how work gets done at every level of the organization.

The post Enabling Team Autonomy: What HR Needs to Know About Modern Organizational Models appeared first on AIHR.

Our latest HR Trends report revealed that disengagement costs businesses $8.8 trillion in lost productivity. This shows a clear need for a more effective approach that focuses on what truly matters to employees and moves away from surface-level perks that generate short-term excitement but fail to foster lasting engagement.

Beyond the lost productivity, employee engagement models and approaches often neglect the needs of the frontline worker. Historically, this has been due to perceptions of “being hard to reach,” time constraints, and a lack of access to technology.

In this article, we examine engagement through the lens of frontline employees and propose a needs-based model and approach to driving frontline employee engagement.

Contents
The importance of frontline employee engagement
How well do employee engagement models apply to the frontline workforce?
What does the frontline really want from work?
Adopting a needs-based approach to frontline employee engagement
How can HR adopt the model for their frontline employee engagement strategies?

The importance of frontline employee engagement

Frontline workers account for over 2 billion employees worldwide, accounting for nearly 80% of the global workforce. Yet, many employee engagement models fail to address their unique needs, often relying on engagement models developed for office-based workers.

Traditional engagement models emphasize career development, learning opportunities, and flexibility. Although these factors remain important for the frontline, other factors, such as fair pay, safety, and security, are more critical in the life of a frontline worker. 

For example, an insurance organization had to implement “safety and panic buttons” for traveling sales individuals due to rising safety concerns when entering the homes of new potential clients. Similarly, most mining operations focus on physical safety, given the high levels of danger associated with the role. Yet, these factors are often not emphasized when approaching employee engagement strategies.

Organizations that neglect to apply relevant and targeted frontline engagement strategies risk higher turnover, reduced productivity, and lower customer satisfaction.

How well do employee engagement models apply to the frontline workforce?

Before developing a more frontline-focused employee engagement model, let’s summarize some well-known employee engagement models as a starting point.

Each model has strengths and limitations, but many fail to capture frontline realities fully. For instance:

• Safety and security—top concerns for frontline workers—are rarely central to these models.
• Career growth is often a primary engagement driver in these frameworks, yet frontline roles frequently offer limited advancement opportunities.
• Fair pay and benefits, essential to frontline engagement, are often dismissed as “hygiene factors” rather than recognized as fundamental drivers of motivation and retention.

Engagement in the frontline cannot be an afterthought. Organizations must rethink how they apply these frameworks, ensuring they reflect the priorities of those on the ground.

What does the frontline really want from work?

We had the opportunity to interview Dr Cristian Grossman from the frontline employee app provider Beekeeper about their recent research report on the pulse of the frontline worker. They engaged with more than 8,000 frontline workers to explore what is important to them and what are the main barriers to frontline employee engagement.

We summarized their findings below, and you can listen to the full interview here:

Factors such as managerial support, access to tools, and clear communication are essential drivers of engagement for the frontline.

Workload management and adequate staffing and scheduling also impact frontline engagement. In industries such as retail and healthcare, where there are extensive skills shortages, this becomes even more important as the lack of available people often leads current employees to work additional shifts or do more than what is reasonably expected.

Most organizations depend on managers to communicate between the head office and frontline environments. Yet managers are overburdened with administrative tasks, spending nearly 60% of their time on repetitive processes, leading to disconnected and inconsistent communication.

Technology and tools remain misaligned with frontline realities. While corporate employees benefit from AI-powered efficiencies and streamlined digital tools, many frontline workers still rely on outdated methods such as paper forms and manual scheduling. 

The frontline is now starting to experience, I would say, a renaissance, getting tools suddenly developed only for them. But those are, in many cases, only point solutions, or the type of tools that desktop workers use themselves because they’re the ones that are conceiving the solutions and say, “Hey, if I’m already using this tool from a legacy vendor in the desktop world, why not just try to put it out there, right? It has a mobile app, it should work.” Well, it turns out that creating software for the frontline is almost a different discipline than creating software for the desktop.

Dr Cristian Grossman, CEO at Beekeeper

Employee retention remains a challenge, with nearly half of frontline workers in this study changing jobs within a year. Pay and work-life balance are listed as the top reasons for leaving, but culture and career progression also play a decisive role in job mobility.

It is also important to create a culture of appreciation, where recognition is embedded in everyday interactions rather than reserved for structured reward programs. Frontline employees don’t just want praise for outcomes; they seek acknowledgment of their effort and contribution. 

Building on these insights, the models highlighted previously, and the implementation of various employee engagement strategies in frontline environments, we position a different focus for frontline employee engagement.

Adopting a needs-based approach to frontline employee engagement

To ensure its relevance to the frontline, we developed our model based on basic human needs applicable to the frontline workforce. Human needs are fundamental requirements that drive behavior, motivation, and wellbeing. Models such as Maslow’s Hierarchy of Needs, Self-Determination Theory, and Alderfer’s ERG theory are good examples of human needs models.

In our model, we highlight the drivers or factors that need to be in place for engagement to occur. We define engagement as the extent to which employees are willing and committed to contribute within reason to the goals of the organization over time. In our model, if the needs are met, engagement will occur.

We highlight the needs of frontline workers in terms of three levels:

• Individual needs in job: These refer to needs that the individual has specifically related to the content of their job.
• Individual needs from manager: These refer to needs that frontline workers have from their direct managers.
• Individual needs from organization: These refer to needs that frontline employees have in terms of the broader organization and environment.

Let’s break the model down.

Individual needs in job

At the individual needs level, we identify four needs:

Individual needs from manager

The next level describes what individuals need from their managers. These activities fall within the scope and control of the manager:

Individual needs from organization

At an organizational level, there are also needs that have to be met. Specifically, at this level, we look at policies and environmental factors that are only within the control of leaders:

When considering frontline engagement, organizations must take a holistic approach that considers needs at all these levels. When measuring engagement and planning engagement interventions, these factors can be used as a guide for the elements needed for the organization to be an environment where frontline employees can be engaged.

How can HR adopt the model to their frontline employee engagement strategies?

We firmly believe that even though employee engagement is a business responsibility, HR must play a key role in facilitating and ensuring these elements are in place. Specifically, related to our model above, HR can contribute in the following ways:

Workforce planning

HR is responsible for a robust, data-driven approach to workforce planning. This can help ensure adequate workload management.

For frontline employees, effective workforce planning goes beyond just staffing numbers—it directly impacts engagement, job satisfaction, and retention. When scheduling and workload distribution are managed thoughtfully, employees are less likely to experience burnout and more likely to stay motivated. 

Work design

HR needs to design jobs for the frontline workforce that promote autonomy and challenging work and balance the skills required for success with how employees are recruited and developed.

Compensation practices

HR can ensure a fair and transparent compensation policy and practice through continuous benchmarking and fair pay.

Specifically, HR can implement comprehensive benefits packages for frontline employees that prioritize medical care, social support for their families, and housing.

Manager development

Given managers’ important role in frontline engagement, HR needs to support the development of the right managerial competencies to keep the frontline well-managed.

Specifically, HR should also scope out the expectations from managerial roles, allowing enough time to effectively manage the frontline without being overburdened with administrative processes.

A culture of recognition

HR can foster a culture of recognition within the workforce and reinforce these mechanisms through policies and practices related to recognition. Similarly, HR can guide managers in using informal recognition and praise, building a culture where frontline employees feel seen and heard.

Wellbeing

Robust wellbeing programs can significantly increase the engagement of the frontline. HR can provide these employees with sufficient access to relevant wellbeing services while also promoting proactive wellbeing management.

Final words

The frontline is an important part of the workforce and the lifeblood of many economies around the world. Ensuring that this workforce segment is engaged will require a different approach from organizations and HR, requiring a sharp focus on and prioritizing the things that really matter to the frontline employees.

The post Frontline Employee Engagement: Taking a Needs-Based Approach appeared first on AIHR.

Despite increased investments in AI upskilling, many HR professionals report that companies have not sufficiently adopted AI in a way that demonstrates impact and return on investment. This issue largely arises from organizations failing to integrate AI into their existing processes and workflows. 61% of HR professionals believe their departments have not yet successfully integrated AI into their work. Additionally, Gallup reports that only 22% of individuals feel comfortable or somewhat comfortable using AI in their roles.

That’s why upskilling alone will not lead to sustainable adoption. Instead, successful AI integration requires a combination of new skills and a clear strategy for applying AI in the HR function. 

In this article, we dive deeper into how organizations can practically bridge the gap between upskilling and real-world AI integration.

Contents
What is AI integration in HR?
What are the skills HR professionals need in the age of AI?
4 strategies to drive AI integration in HR

What is AI integration in HR?

AI integration in HR refers to the use of artificial intelligence technologies to automate, enhance, and optimize HR processes such as recruitment, employee engagement, performance management, and workforce analytics. It’s not just about developing AI-related skills but also about strategically implementing, scaling, and leveraging AI to optimize processes, enhance decision-making, and drive business impact.

I think there’s this expectation that when new technology comes out like it’s here and now, it’s going to change the world. And I believe it will, but not within 24 hours. With every major technological transformation—whether digital or even something like the printing press, you essentially have two components. You have the tech thing being invented, and then you have humans using it. And which one do you think is more difficult?

Sophia Matveeva, CEO & Founder of Tech For Non-Techies

What are the skills HR professionals need in the age of AI?

Our T-Shaped HR Competency Model defines five core competencies for HR professionals to succeed and remain relevant to meet the changing expectations of HR professionals:

• Business Acumen
• Data Literacy
• Digital Agility
• People Advocacy
• Execution Excellence. 

While HR professionals have made strides in Business Acumen, technical HR expertise, and People Advocacy, their ability to leverage data and technology effectively remains a persistent challenge.

One reason for this gap is historical exposure—many HR professionals simply haven’t had the same immersion in data and digital tools as their peers in other functions like Finance, Marketing, or Operations.

Another potential reason is that HR professionals do not stay abreast of technological changes over time as they mature in their careers. Unfortunately, this lack of competence and confidence leads to limited translation of skills development back to the day-to-day work of HR professionals.

In an AI-driven world, Data Literacy and Digital Agility are even more critical than before. Beyond technical expertise, HR professionals also have to develop the right mindset and behaviors to set themselves up for success. This includes developing curiosity, systemic thinking, and the ability to critically evaluate and consider ethical considerations when using AI. 

HR professionals are often hesitant to ask their employers for AI training. “I don’t want them to know I don’t understand this,” they say. But why would you? You work in HR—no one is born knowing AI. Yet, there’s a lot of shame around not instantly grasping digital transformation. In tech startups or big tech companies, there’s this unspoken expectation that you’ll absorb it when you walk in.

Sophia Matveeva, CEO & Founder of Tech For Non-Techies

A common misconception, however, is that all HR professionals require the same skills to use and apply AI. Context is essential, and we have found it helpful to think about skills requirements in three distinct categories. These categories help us understand how AI skills are developed and how HR professionals apply different skills within different roles.

Let’s take a closer look at these three skills categories.

Base skills for general users

The first skills category applies to most HR professionals who interact with AI-driven tools but do not build or maintain them. They use AI within their role in areas like talent acquisition, employee engagement, and workforce planning.

To do this effectively, the key requirements for this group of HR professionals are to have a basic understanding of how they can leverage AI, confidence in where and how to apply AI safely, and the ability to use essential AI tools. Some of the key skills required are:

• AI fundamentals and functionality: Understanding the core principles of AI, including how machine learning, natural language processing, and automation work and their applications in business and HR.
• Ethical and responsible AI usage: Ensuring AI is used transparently, fairly, and responsibly by addressing bias, data privacy, compliance, and ethical decision-making in AI-driven processes.
• Basic data literacy: The ability to read, interpret, and apply data insights, including understanding data sources, quality, and limitations, to support informed decision-making.
• Prompt design (for effective AI interaction): Crafting clear, structured, and strategic prompts to enhance interactions with AI tools, improving accuracy, relevance, and response efficiency.
• Adaptability, curiosity, and problem-solving: Cultivating a mindset that embraces change, exploring new possibilities, and applying critical thinking to solve challenges in dynamic and AI-enhanced environments.

Technical skills for builders and maintainers

The next category applies to fewer HR professionals. They are typically in roles that build, configure, manage, and optimize AI applications within HR functions. HR technology specialists, HRIS analysts, and some HR Center of Excellence functions fall into this category.

Applying AI at this level requires more specialized skills, including the following: 

• Machine learning fundamentals: Understanding key machine learning concepts, including algorithms, training models, and pattern recognition, to grasp how AI learns and improves over time.
• Business analysis and AI integration: Evaluating business needs, identifying AI opportunities, and aligning AI solutions with strategic goals to drive efficiency and innovation.
• Data management: Organizing, storing, and securing data effectively to ensure accuracy, accessibility, and compliance for AI-driven decision-making.
• Programming and system optimization: Applying coding skills and technical knowledge to develop, refine, and optimize AI systems for performance, scalability, and reliability.
• Communication and stakeholder collaboration: Translating AI concepts for diverse audiences, fostering cross-functional teamwork, and ensuring AI initiatives align with business priorities and user needs.

Advanced skills for developers and innovators

The last category applies to a small percentage of professionals who specialize in AI research, development, and security. These roles drive AI advancements, develop proprietary models, and ensure ethical and legal compliance.

Even though these skills will not be represented in most HR roles, HR professionals who are involved in developing HR technologies must be proficient in these advanced skills:

• Advanced AI model development: Designing and refining complex AI systems, including deep learning architectures and large language models, to enhance automation, prediction, and decision-making capabilities.
• Cybersecurity in AI-driven HR applications: Safeguarding HR data and AI systems by implementing security measures to prevent breaches, bias perpetuation, and unauthorized access while ensuring compliance with data protection regulations.
• Analytical and critical thinking: Evaluating AI-generated insights with a data-driven mindset, questioning assumptions, and making informed, strategic decisions based on evidence and logical reasoning.
• Problem-solving for AI optimization: Identifying inefficiencies, troubleshooting AI system errors, and enhancing AI performance through continuous refinement and innovative solutions.

To build these skills successfully and sustainably, we need to adopt a different approach beyond simply upskilling all HR professionals.

We discussed how to successfully integrate AI in HR and the business with Sophia Matveeva, CEO & Founder of Tech For Non-Techies. Watch the interview below:

4 strategies to drive AI integration in HR

When it comes to AI, most HR professionals upskill themselves through self-exploration, online resources, or vendor-driven training on specific platforms and tools. While developing AI-related skills is important, this unstructured approach has many limitations and can even hinder successful AI integration in HR.

A broader, more strategic approach is needed—one that goes beyond skill-building to focus on the structured implementation, scaling, and effective use of AI in HR.

We propose a structured, step-by-step approach to driving AI integration through four key phases that move HR professionals from awareness to being able to scale AI within the team.

1. Educate: Building AI awareness and understanding

Before HR professionals can effectively use AI, they need a strong foundational understanding of what AI is, what it can do, and how it applies to HR. Moreover, they need to have a strong grasp of the risks associated with AI use, specifically data security, where it should not be applied, and the technology’s limitations, such as hallucinations. This starts with structured learning and exposure to real-world applications.

How to start

• Create structured training programs: Offer learning paths that introduce HR professionals to AI fundamentals, ethics, and practical applications.
• Show clear and relevant use cases: Use real examples to illustrate AI’s role in recruitment, employee experience, talent management, and workforce planning.
• Implement AI literacy frameworks: Provide a structured learning journey, ensuring HR professionals understand:
  • What AI is good at (E.g., automation, pattern recognition, predictive analytics)
  • Where AI can be applied in HR (E.g., talent acquisition, employee engagement, workforce analytics)
  • How to approach AI in HR (Emphasizing ethics, data integrity, and responsible AI governance)

2. Equip: Providing the right tools and safe practice environments

Once HR professionals understand AI’s what and why, they need access to tools, guidelines, and structured opportunities to experiment. With the right tools, structured training, and a practice-first approach, they will gradually develop confidence and AI fluency. This phase focuses on practical application in a low-risk, supportive environment.

How to start

• Introduce AI tools progressively: Start with simple, user-friendly AI tools before moving to advanced applications. Generative AI tools can be a good starting point.
• Leverage familiar use cases: Begin with areas where HR professionals already have experience to build confidence.
• Create sandbox environments: Provide safe spaces where HR teams can experiment with AI without risk, allowing them to explore how AI generates insights, how AI adds value, and how to interpret AI-generated outputs. An example of this is using training HR data sets.
• Encourage reflection: Ensure users continuously reflect on what they are learning:
  • Where has AI been useful?
  • How does it enhance HR decision-making?
  • How can AI applications be expanded over time?

3. Expose: Integrating AI into daily work and encouraging collaboration

Once HR professionals are familiar with AI tools, the next step is to embed AI into their daily workflows in a structured way. This involves gradual adoption, social learning, and an environment encouraging knowledge-sharing.

How to start

• Create structured experiments: Allow HR teams to test AI applications in a controlled way, measuring their effectiveness and iterating based on results.
• Facilitate social learning: Encourage HR professionals to share their AI experiences, challenges, and best practices. Strategies include:
  • AI knowledge-sharing forums
  • HR learning groups focused on AI integration
  • Peer mentoring and collaborative problem-solving.
• Showcase success stories: Regularly share real-world examples of AI success within the organization. Highlight improvements in efficiency, candidate experience, or employee engagement.

By gradually integrating AI into real work scenarios, HR professionals will become more comfortable, confident, and willing to expand AI’s role in HR.

4. Elevate: Scaling AI across HR functions and strategy

The final step is to embed AI into the broader HR value chain, transforming HR from an AI adopter into an AI-enabled strategic function. This means moving from isolated use cases to a systematic and scalable AI-driven HR strategy.

How to start

• Expand AI applications across HR: Once AI proves its value in smaller projects, broaden its impact by embedding it into HR’s core processes and policies. Examples include:
  • AI-driven talent management (E.g., predicting future skills gaps and reskilling needs)
  • Intelligent automation of HR service delivery (E.g., AI-powered chatbots handling routine HR inquiries)
  • AI-assisted employee development (E.g., personalized learning recommendations).
• Start with HR processes before enterprise-wide AI adoption: Focus first on HR-specific AI applications, then expand AI into enterprise-wide HR decision-making (e.g., AI-driven workforce planning at the executive level).
• Establish governance and ethical frameworks: Ensure AI is used responsibly by implementing bias mitigation, compliance, and AI transparency policies.
• Measure impact and iterate: Continuously assess AI’s effectiveness in HR processes. Regularly gather feedback, refine AI applications, and stay updated on AI advancements.

Getting started

The first step is understanding the current state of AI skills in your HR department and across the business. Assess where your team and organization stand by asking key questions:

• How is AI currently used in HR processes?
• What level of data literacy exists within the team?
• Where are the biggest challenges or inefficiencies that AI could help solve?

Understanding these factors will clarify where AI can add value, ensuring that adoption aligns with business and talent strategies rather than becoming a disconnected initiative.

Once you have established a baseline, prioritize your starting point for the various roles that form part of your HR team based on the three levels of skills requirements. Next, structure a roadmap to guide activities based on the four strategies of Educate, Equip, Expose, and Elevate. 

AI adoption in HR is an ongoing journey, requiring continuous learning and iteration. Establish a system to monitor progress by tracking key HR metrics, gathering feedback from employees and HR stakeholders, and measuring the impact of AI-driven interventions. Regularly assess and refine your approach as AI capabilities evolve to ensure that AI strengthens HR’s role in driving business success rather than a one-time experiment.

The post AI Integration in HR: Educate, Equip, Expose and Elevate appeared first on AIHR.

At the same time, accusations against the Los Angeles Fire Department Chief, alleging that DEIB-focused hiring compromised operational readiness during the catastrophic fires in early 2025, have fueled debates about the role and impact of DEIB efforts. Even though these claims have no supporting evidence, they drive a negative perception of the value of DEIB.

Unfortunately, the debate about DEIB tends to focus on representation and equity at the expense of inclusion and belonging in the workplace. This view is limiting and leads to us getting caught up in debates on hiring and promotions. The evidence shows that representation in isolation does not lead to better performance, calling on us as HR to take a more holistic view of the end-to-end DEIB domain.

In this article, we provide a holistic framework to help HR professionals take a more holistic approach to inclusion and belonging and move beyond the focus on diversity and equity.

Contents
Defining inclusion and belonging beyond diversity and equity
What are organizations getting wrong with inclusion and belonging in the workplace?
A comprehensive framework for inclusion and belonging in the workplace
Getting started

Defining inclusion and belonging beyond diversity and equity

The acronym DEIB is commonly used today by HR and business professionals. Even though the term’s awareness has increased, the unintended consequence is that we have lost a deeper understanding of the details below each of the letters. Many see DEIB as one concept instead of acknowledging that the different parts of the acronym have significantly different objectives, strategies, and values. 

As mentioned earlier, a significant discrepancy is the perception that DEIB programs focus solely on representation, which means that most organizations ignore inclusion and belonging as an essential part of organizational culture.

Taking a step back, we need to understand that each part of the acronym is a domain in its own right, even though they are interrelated:

While closely related, inclusion and belonging address different aspects of the workplace and the relationship between the employee and employer.

Inclusion focuses on creating an environment where individuals feel empowered to contribute and is often influenced by a strong focus on access to the workplace, team relationships, and organizational culture. 

Belonging is the emotional counterpart to inclusion and reflects an individual’s sense of acceptance and connection within the organization. Belonging also refers to the extent to which employees feel seen, heard, and appreciated for who they are. It is often associated with employee engagement strategies, the team’s trust levels, and the quality of the relationship between employees and management.

It is important to note that inclusion and belonging are shared responsibilities between individuals and the organization. Individuals need to want to be included and also do their part to belong, while the organization has to create an environment that includes, celebrates differences, and allows individuals to contribute.

What are organizations getting wrong with inclusion and belonging in the workplace?

Many organizations have embarked on DEIB initiatives with noble intentions. Unfortunately, as is evident from the public sentiment about these practices, some common mistakes are preventing businesses from seeing the value that DEIB brings to the organization.

A few of the common pitfalls are:

Focusing on ethics, not impact

HR teams often frame DEIB initiatives as the “right thing to do” driven by a sense of social responsibility. While such an approach highlights the moral and ethical dimensions of DEIB, it risks positioning it as an external obligation rather than a key driver of organizational success. 

This narrow focus can lead stakeholders to view it as a “check-box” exercise without seeing its tangible connection to business value.

→ What organizations need: A more holistic way to explain the value to the business of the different elements of D, E, I, and B and link the outcomes to tangible business value substantiated by evidence. For example:

Overemphasis on representation

Many organizations reduce DEIB to focusing narrowly on demographic representation. This approach typically involves tracking metrics like the number of people from underrepresented groups hired, promoted, or represented at each level of the organization. While representation is critical, only focusing on these metrics often limits progress. 

Representation focuses on who is in the room, but if this is not balanced with inclusion and belonging, it becomes symbolic rather than transformative. Employees who are present but feel overlooked or undervalued may still struggle to thrive or to bring the creativity and perspectives that make diversity an asset.

→ What organizations need: Ensure that monitoring and tracking metrics are focused on all domains of DEIB, expanding the business conversation to go beyond the numbers and focus on aspects of culture and engagement.

Seeing inclusion and belonging as an outcome and not a focus

Many believe inclusion and belonging will follow if we focus on diversity and equity. As stated above, this is not true. For authentic and sustainable inclusion and belonging to occur, we must understand the differences between the areas and how they contribute value.

→ What organizations need: Strategies and frameworks that view each of these elements in its own right and target them appropriately to drive value.

Making DEIB only about justice

DEIB programs can inadvertently place significant focus on past injustices and emphasize who has been wronged. While raising awareness of inequities and acknowledging systemic barriers is important, framing these discussions primarily through a lens of victimization can be counterproductive.

→ What organizations need: Businesses need a “building” narrative focused on acknowledging and understanding history and context while seeking a way forward that includes all. A balanced approach that recognizes challenges while empowering individuals and fostering forward-looking solutions is more effective in driving meaningful change.

Avoiding the debate altogether

Some organizations have opted to avoid DEIB issues altogether to escape criticism. However, this neutrality often alienates employees, particularly younger generations, who value employers that take a stance on social and workplace problems.

→ What organizations need: Companies should participate in the discussion and express their perspectives on DEIB issues instead of abolishing these programs outright. We need more participation and sharing of what works, what does not, and how we should move the intent that sits DEIB forward.

A comprehensive framework for inclusion and belonging in the workplace

Considering these recommendations, we have provided a framework below that HR professionals can utilize to guide their DEIB practices to be broader and drive higher value. Before diving into the framework, we acknowledge that DEIB is highly contextual, and as such, we should always consider the external context to inform our initiatives and priorities.

The framework is divided into two layers. The inner layer reflects the various outcomes we want to achieve, or in simple terms, what success looks like. The outer layer showcases the enablers that need to be in place for these outcomes to be achieved.

Outcomes can be linked to the specific areas of diversity, equity, inclusion, and belonging. Below the line are the areas that focus specifically on diversity and equity, while the areas above the line strongly focus on inclusion and belonging.

Here are the outcomes for the organization to achieve:

• Representation and accessibility: The organization is accessible to individuals from all backgrounds and effectively represents the communities we serve and operate within.
• Fairness, transparency, and dignity: Consistently acting in ways that are fair, transparent, and aligned with employee needs, ensuring their dignity and humanity are upheld.
• Psychological safety and professional respect: Creating an environment where individuals feel psychologically safe to be themselves and engage professionally without fear of undue consequences.
• Employee voice and collaborative contribution: Employees can voice their perspectives formally and informally and collaborate to achieve shared goals.
• High levels of trust: Building a workplace where people trust each other and the intentions behind decisions and actions.

These outcomes can only become a reality if specific enablers are in place. These enablers range from systemic areas to interpersonal and behavioral dimensions. 

• Policies and processes: Robust policies and processes must be in place to dismantle barriers, promote consistency in actions, and create trust.
• Workplace practices: Day-to-day practices must reflect and reinforce inclusion, belonging, and equity, ensuring they are embedded in how work is designed and executed across the organization
• Leadership and management commitment: Managers and leaders must demonstrate a genuine commitment to driving inclusion and belonging, extending beyond surface-level support for diversity and equity.
• Team relationships: Teams must trust each other’s competence and build strong relationships.
• Culture and climate: The organization’s culture must set the foundation for inclusion and belonging, ensuring it aligns with and supports these values at every level.

The inner and outer layers work together to ensure a broader focus on DEIB, and although distinct, they are interrelated.

We discussed inclusion in the workplace with the inclusion strategist Amri B. Johnson. Watch the full interview below:

Getting started

To make the model practical, the first step is to evaluate the current work being done in the organization against the framework. It is helpful to categorize to what extent these realities are true for the organization and prioritize areas to focus on where the most significant discrepancies exist.

Below, we provide a series of questions that can be used as a starting point:

A final word

Amid the ongoing public debate about DEIB’s value, HR must adopt a more holistic approach that demonstrates clear business value and highlights its importance in the future of work. To do so, DEIB must move away from a narrow focus that only targets representation and expand on creating environments that actively foster inclusion and belonging for all employees.

The post Beyond Diversity & Equity: Focusing on Inclusion and Belonging in the Workplace appeared first on AIHR.

To keep up, HR departments must develop new capabilities to adapt to current business needs while also anticipating future requirements. However, our State of HR report reveals that the growth of HR often lags behind that of the business. As such, many HR leaders struggle to identify which capabilities to prioritize at each stage of business growth. 

In this article, we explore how to identify, build, and scale HR capabilities in alignment with business growth and strategic objectives.

Contents
HR capabilities across business stages
HR capabilities vs. competencies
5 steps to develop HR capabilities that meet business needs

HR capabilities across business stages

Aligning HR capability development with the stages of business growth ensures that HR functions can consistently contribute to organizational goals.

The business life cycle model is a helpful framework for understanding the challenges and priorities businesses need to solve at each growth stage. Using the lifecycle stages as a guide, we can identify the requirements from HR, which in turn dictate the capability requirements.

Here’s a breakdown of how HR’s focus and capabilities might adapt across the different business lifecycle stages:

1. Startup stage

The company is focused on proving its value proposition and generating revenue. During this stage, the business consists of the founders and a core team with little structure and resources.

To prepare the business for the next phase, HR has to establish the basic policies, processes, and payroll while also focusing on talent acquisition as a critical priority.

→ Primary HR capabilities: Talent acquisition and setting up foundational HR processes and payroll.

2. Growth stage

The company increases its customer base and builds additional products or services to help scale further. The business starts to formalize, the headcount grows, and the organization begins introducing more structure in responsibilities and roles.

HR has to play a role in stretching current talent and driving a performance culture while also helping the business with the relevant organizational design to execute its growth ambitions.

→ Primary HR capabilities: Talent development, performance management, employer brand, HR Technology and Analytics, Total Rewards, and Organizational design.

We discussed how to structure your HR department for growth and what capabilities you need with Dr. JooBee Yeow, an adviser to start-ups, educator, speaker, writer, and entrepreneur at Learngility. Watch the full interview below:

3. Maturity stage

The company stabilizes operations, manages costs, and seeks new opportunities. At this stage, efficiency becomes a key focus, and HR is tasked with helping drive productivity through people, ensuring the health of the leadership pool, and developing succession and retention plans for critical talent.

Wellbeing becomes an important consideration, and HR has to formalize it as part of the business’s culture. Employee engagement and manager development remain key focus areas, and HR formalizes its strategy and priorities for the long term.

→ Primary HR capabilities: Operational efficiency, leadership development, employee experience and engagement, HR strategy, and succession planning.

4. Renewal or transformation stage

The company focuses on finding new avenues for growth, often engaging in activities such as mergers and acquisitions, aggressive expansion strategies, or developing new products and services.

HR drives these changes for the workforce, aligning workforce capabilities with new business directions and developing reskilling programs to enable execution.

→ Primary HR capabilities: Change management, strategic workforce planning, and reskilling/upskilling.

5. Decline stage (if applicable)

For many companies, this stage is characterized by declining sales, and resources are reallocated elsewhere to maintain profitability. If organizations act quickly, they can move back to the renewal phase, while a lack of action leads to business closure.

HR’s focus during this stage is on guiding employees through these transitions, retaining key talent for essential operations, and managing knowledge transfer to preserve critical organizational knowledge.

→ Primary HR capabilities: Outplacement, retention of critical talent, and knowledge transfer.

To summarize, at the different business lifecycle stages, specific HR capabilities become more important for developing and solving the business’s needs. Although this has to be adapted to the context and needs of each company, below is a generic view of how HR capabilities typically develop in alignment with the business lifecycle.

Capabilities developed during earlier stages remain relevant as the organization grows, serving as foundational elements. Maintaining these core capabilities is essential to keep the foundations supporting ongoing growth.

HR capabilities vs. competencies

A competency is a combination of skills, knowledge, and experiences that an individual needs to perform specific tasks or responsibilities. At AIHR, our T-shaped HR Competency Model outlines the key competencies we believe are essential for future HR professionals’ success.

Capabilities, on the other hand, are positioned at a functional or organizational level. They refer to the people, processes, and technology required to achieve strategic goals. Simply put, capabilities answer the question, “What do we, as a team, need to excel at to drive success?” while competencies address, “What skills, knowledge, and experience enable individuals to complete specific activities successfully?”

Understanding the differences between these two concepts is crucial, as building individual competencies is distinct from building functional capabilities. Many organizations mistakenly assume that developing competencies will automatically lead to strong capabilities. However, this limited view often results in highly skilled individuals who lack the necessary tools, processes, or infrastructure to achieve desired outcomes.

5 steps to develop HR capabilities that meet business needs

Building capabilities requires a structured approach that balances the business’s needs with the availability of HR resources and investments. Here are six steps to put the right HR capabilities in place.

Step 1: Identify the HR capabilities relevant to your business

To identify the HR capabilities the organization needs to succeed, it’s essential to clarify what’s expected from HR, understand strategic priorities, and determine how HR can deliver the most value.

The business life cycle stages mentioned above are a helpful starting point for determining which HR capabilities are relevant to the business. Still, it is important to validate which capabilities are relevant to your specific context.

A few guiding questions that can help identify the relevant capabilities are:

• How will we measure HR’s success? Establish key performance indicators (KPIs) to measure HR’s contributions and align them with business objectives.
• What are the business’s top priorities for HR? HR and business leaders should align to clarify which areas need focus, whether it’s talent acquisition, employee experience, or driving organizational change.
• Where can HR have the greatest impact? Identify the capabilities and initiatives that align with strategic goals and address the organization’s most pressing challenges.

Using these questions, the relevant capabilities can be identified and prioritized. Be careful of selecting too many capabilities; instead, focus on the essential capabilities that will drive the biggest business impact.

Implementation tip

If you struggle to identify HR capabilities, it is helpful to refer back to the various functions within HR. Start by focusing on the foundational pillars of HR, as described in this article.

Step 2: Describe your capabilities

After defining the capabilities, the next step is to describe the capabilities in terms of people, process, and technology requirements. This involves answering three key questions:

1. What competencies are essential for this capability?
2. What processes should be in place?
3. What systems and tools are required?

To illustrate how to do this, let’s consider the example of talent acquisition capability.

First, the capability is described in terms of the specific competencies required to source, recruit, and onboard talent. Second, the critical processes for implementing talent acquisition-related outcomes include candidate acquisition, onboarding, reference checks, and sourcing strategies. Third, regarding technology, an Applicant Tracking System (ATS) and the ability to integrate it into the core HRIS will be crucial.

Describing each capability clarifies what will be required to implement it effectively. Once all the necessary capabilities for this stage of the business have been clearly defined, the required capabilities can be prioritized based on their strategic importance to the business and the available resources to build them.

Step 3: Categorize your capabilities

Categorizing capabilities helps prioritize which ones to develop based on their strategic importance. While all capabilities add value, their significance can vary depending on the business’s current HR needs. So, put simply, even though all capabilities are required, some require more focus than others.

A helpful framework to use is to draw a capability map. A capability map ranks and prioritizes capabilities in terms of three categories:

1. Core essentials: These are essential, foundational capabilities necessary for day-to-day operations. They often cover governance, employee relations, and compliance—areas that require consistent investment to maintain functionality.
2. Industry standard: These capabilities align with standard industry practices, providing a solid baseline for HR service delivery. They help ensure that our HR offerings meet basic standards without necessarily exceeding them.
3. Strategic differentiators: These are the capabilities that distinguish the organization in the market. They might include a compelling employee value proposition, innovative compensation practices, or flexible work policies, reflecting areas where your business aims to stand out.

Let’s look at an example.

Company ABC is in a scale-up phase and has identified a need to develop capabilities in talent management, policies and procedures, and HR technologies. Given their business stage, they prioritize HR technologies that can effectively manage payroll and offer self-service. They’re not looking for best-in-market solutions but rather for technology that meets current needs without excessive features.

For policies and procedures, they aim to be “as good as the rest.” Practically, this means developing policies that are practical and fit for purpose, investing only as much as necessary to meet standard expectations. Their policies will be aligned with, but not necessarily exceed, those of competitors.

However, they see talent management as a critical capability that can provide a competitive advantage. Therefore, they prioritize building robust talent management processes and dedicated teams focused on attracting and developing top talent. They allocate more resources to the talent management function to fully realize the value.

Once ABC sets these priorities, it can visualize the capabilities through a capability map, which provides a clear overview of focus areas and investment levels.

Below is an example of a capability map drawn for an HR organization aligned to the needs of a business in the “Maturity” phase.

Step 4: Assess current capabilities and identify gaps

With the capability map in place, the next step is to assess the current state of each HR capability. This involves collecting comprehensive data on existing competencies, processes, and technologies using methods such as interviews, assessments, system data analysis, observational studies, and stakeholder feedback. Each capability should be evaluated against defined criteria like effectiveness, efficiency, and scalability.

This analysis should reveal gaps, strengths, and targeted actions to bridge areas needing improvement. For example, if talent acquisition technologies are found to be inadequate, this signals a priority for investment. Conversely, you can earmark capabilities assessed as strong for maintenance rather than further development.

By identifying these gaps and strengths, HR can make informed decisions to align capabilities with business goals and support long-term growth. Findings from this assessment will inform the next step in building a robust, future-ready HR function.

Below is an example of a capability analysis with identified strengths and gaps:

Step 5: Develop and implement capability-building initiatives

With the gaps identified, the next step is to outline a structured capability-building plan that details:

• Key initiatives: What specific actions are needed to strengthen each capability?
• Responsibility: Who will lead each initiative?
• Budget requirements: What financial resources are necessary to support these initiatives?
• Ownership: Who will take accountability for driving these initiatives forward?

Final words

Identifying, describing, and developing capabilities are crucial to the success of any HR team. Aligning these capabilities with the business lifecycle stages ensures that HR priorities evolve alongside the company’s needs, from startup to growth, maturity, or reinvention.

Ensuring a structured and holistic approach allows HR teams to execute sustainably and optimize the available resources to invest in capabilities that matter most at each stage of the business journey.

The post How HR Capabilities Evolve with Business Growth [+ 5 Tips for HR Leaders] appeared first on AIHR.

So, what’s the solution to this dilemma? Should we abandon performance management altogether?

In this article, we evaluate why performance management remains essential for business success, argue that current approaches are not suitable for all organizations, and show four innovative performance management approaches.

Contents
Do we still need performance management?
4 future-ready performance management approaches
1. The Retro Reflection Method
2. Client-Colleague-Manager Feedback Method
3. Mission-Based OKR Method
4. Continuous Dialogue Method
How to start innovating your performance management

Do we still need performance management?

When done correctly, performance management remains a critical process for aligning business objectives with employee development. The problem is that many performance management approaches are based on outdated principles designed for more predictable, repetitive work environments.

In the fast-paced world of work of today, where roles change and goals shift rapidly, performance management must evolve too. New approaches are required—ones that reflect the way work happens now.

Traditionally, performance management followed a structured process. Managers would set specific goals for employees, often aligning them with company objectives through a top-down approach known as goal cascading.

Throughout the year, managers would provide feedback, measure performance, and calibrate ratings to ensure consistency across teams. At the end of the cycle, these evaluations would be finalized, usually influencing decisions about promotions, raises, or development plans.

This method works well in organizations that meet the following five criteria:

1. There is a clear organizational structure, with accountability and goals defined at each level. In an organization like this, it’s easy to understand how each team member contributes to the manager’s goals.
2. The organization runs on an annual cycle, with plans set for each year. For example, there is a plan in place with targets, and goals are evaluated annually.
3. A traditional method works in organizations that can easily link successful output to performance impact. For example, call center agents can be assessed by the number of queries they resolve or sales consultants by the amount of products they sell. 
4. The organization has clear roles and responsibilities that define each individual’s contributions to organizational success. That means job descriptions or other statements of work for all roles. 
5. The organization uses precise rating scales describing work output at each level to quantify success. For example, a sales consultant must know that hitting 100% of their sales target is a 3, or a “meet expectations” rating, while 120% is a 5, or exceptional performance.

However, in today’s agile, fast-moving organizations, these assumptions no longer hold for all types of business. Many employees work across projects, collaborate with multiple teams, and juggle rapidly shifting priorities. Traditional performance management methods fail to account for the fluidity of modern work and the complexity of measuring success in such environments.

This is where alternative performance management methods come into play, offering more flexibility and a better fit for modern work demands.

4 future-ready performance management approaches

Modern performance management methods can be mapped across two key dimensions: flexibility vs. structure and internal vs. external focus.

• Flexible vs. structured: Flexible methods are adaptable and can be applied anytime, while structured methods follow a defined sequence with clear steps.
• Internal vs. external focus: Internal methods focus on the impact within the organization, while external methods emphasize outcomes that affect clients or external stakeholders.

1. The Retro Reflection Method

The Retro Reflection Method centers on continuous feedback and focuses on collaboration and behavior. It’s ideal for project-based or assignment-driven work, where clear goals are set at the outset and reviewed at the end of each project or cycle.

How it works:

• Step 1: Target impact statement: At the beginning of a project or assignment, the employee and their manager collaboratively craft a target impact statement. This statement clearly defines the work, success criteria, and expected impact. For example, if an employee is developing a new product feature, the statement would outline specific tasks, what success looks like, and how the feature will impact the business.
• Step 2: Retro reflection conversation: After the work is completed, the employee and manager meet to discuss the outcomes. Both parties reflect on successes, missed opportunities, and areas for improvement. Questions like “What could I have done differently?” and “Did I meet the impact targets?” guide the conversation.
• Step 3: Finalize reflections: After the conversation, the employee documents feedback and their own reflections. This creates a portfolio of evidence over time, which can be reviewed during formal performance evaluations.

When to use: The Retro Reflection Method is ideal for project-driven environments where employees move between teams or work on short- to medium-term assignments. It’s particularly effective for agile organizations or those with a heavy emphasis on team collaboration.

2. Client-Colleague-Manager Feedback Method

The Client-Colleague-Manager Feedback Method is designed to capture feedback from multiple perspectives, ensuring a holistic view of employee performance. It’s especially useful in client-facing roles where external relationships and service delivery are key performance indicators.

This method is similar to traditional 360-degree feedback, yet it differs in two important ways. First, the feedback frequency is higher for this method, focusing on asking shorter, more targeted questions more frequently. Second, the emphasis in this method is largely on the external client, and their feedback will be weighed higher than that of internal stakeholders. 

How it works:

• Step 1: Define feedback criteria: The employee and manager establish criteria for evaluating performance. These might include service quality, client satisfaction, and collaboration with colleagues. Each criterion is broken down into clear questions for feedback collection, such as “Did I meet your expectations?” or “What could I have done better?”
• Step 2: Identify key stakeholders: Feedback is gathered from a balanced mix of clients, colleagues, and managers. The employee selects stakeholders who have observed their work, ensuring that the feedback is comprehensive and unbiased.
• Step 3: Collect and analyze feedback: Feedback is clustered into themes, highlighting strengths, areas for improvement, and any surprises or blind spots. These insights are then reviewed in preparation for a feedback conversation.
• Step 4: Discuss and reflect: The final step involves a structured discussion between the employee and manager, focusing on the feedback themes and identifying development opportunities.

When to use: 

This method is ideal for service-oriented roles or environments where employees frequently collaborate with both internal and external stakeholders. It works well for organizations that value client feedback as a key measure of performance.

We discussed how organizations can innovate their performance management for business impact with Megan Bickle, Fractional Talent Management Strategist and performance management expert. Watch the full interview below:

3. Mission-Based OKR Method

The Mission-Based OKR (Objectives and Key Results) Method focuses on aligning individual and team objectives with broader organizational goals. This approach encourages flexibility and regular feedback, ensuring continuous alignment with the company’s mission.

How it works:

• Step 1: Set OKRs (Objectives and Key Results): Leadership sets high-level objectives for the organization or department, supported by measurable key results. These objectives are ambitious, focusing on key priorities that drive the business forward.
• Step 2: Teams define missions: Each team identifies specific missions that contribute to the overall objectives. For example, a marketing team might focus on increasing brand engagement, while a product team works on feature enhancements that support customer retention.
• Step 3: Align and adjust: Missions are regularly reviewed and adjusted based on progress and changing priorities. Teams collaborate to ensure their efforts align with the overall objectives and key results.
• Step 4: Feedback and reflection: At the end of the performance cycle, teams review their progress toward the key results, discussing what went well, what didn’t, and what could be improved for future missions.

When to use: 

This method is highly effective in fast-paced, growth-oriented organizations with constantly evolving objectives. It’s also ideal for organizations that value agility and flexibility in their performance management processes.

4. Continuous Dialogue Method

The Continuous Dialogue Method emphasizes ongoing conversations between employees and managers. Rather than focusing on specific goals, this method centers around behavior and contributions to team success.

How it works:

• Step 1: Hold regular conversations: Employees meet with their managers regularly to discuss their performance. During these conversations, the employee answers five key questions posed by the manager: “Where am I making the biggest impact?” “Where am I missing opportunities?” “How am I supporting the team?” “Where am I a stumbling block?” “What’s one thing I could change?”
• Step 2: Focus on behaviors: The conversations emphasize behaviors and how they contribute to the team’s and organization’s success, encouraging continuous improvement and self-reflection.
• Step 3: Conduct no formal review: This method does not involve formal performance reviews. Instead, it emphasizes regular, informal check-ins that promote growth and development.

When to use:

This method is well-suited to mature organizations with a culture of open feedback and collaboration. It works particularly well for senior employees or environments that prioritize continuous improvement over rigid performance metrics.

How to start innovating your performance management

If you’re ready to shift away from traditional performance management and explore these alternative methods, here’s how to begin:

1. Assess organizational needs: Determine which method aligns best with your company’s structure, culture, and goals. Do you need a more structured approach, or would a flexible method work better?
2. Pilot a method: Start with a small pilot group to test the selected method. Collect feedback and make adjustments as needed before rolling it out company-wide.
3. Train managers: Ensure managers have the skills to implement the new method effectively, particularly when it comes to giving feedback and facilitating discussions.
4. Create a feedback loop: Establish a system for gathering feedback on the performance management process, allowing continuous refinement and improvement.

Performance management remains a crucial process for business success, but you need to find the right approach that fits the context and realities of your business.

The post 4 Innovative Performance Management Approaches To Implement appeared first on AIHR.

Unfortunately, translating the employer brand promise into employees’ lived experiences has remained challenging for most. Employees have been left feeling disengaged and believing that the organization did not deliver on its promise of the workplace experience, leading to a lack of productivity and increased employee turnover.

In this article, we explore how ESPN uses its employer brand to drive employee experience and commitment. We share four actions any brand can take to achieve similar results and provide you with guiding questions to evaluate the connection between your employer brand and employee experience.

Contents
What is employer brand experience?
Mistakes companies make in shaping their employer brand experience
A story of employer brand experience at ESPN
4 things to learn from ESPN’s employer brand experience
Getting started in your organization

What is employer brand experience?

Employer brand experience refers to the perceptions, emotions, and overall experience that current and potential employees have with an organization as an employer. This concept encompasses every interaction and touchpoint that individuals have with the company, starting from recruitment and onboarding to everyday workplace culture, career development, and even the offboarding process.

A positive employer brand experience can lead to higher employee engagement, increased retention, and a stronger ability to attract top talent, while a negative experience can harm the company’s image, making it more challenging to recruit and retain skilled workers.

Mistakes companies make in shaping their employer brand experience

The past decade has seen a significant focus on employer branding, with many organizations spending vast resources to promote their employer brands to potential talent pools. Internally, the employer brand has been neglected. A lot of organizations have failed to deliver on the promises promoted by the external-facing employer brand.

Employees have taken to public platforms, such as Glassdoor and TikTok, to voice their discontent, often leading to a breakdown of trust and loyalty between employees and the organization.

Organizations have made four critical mistakes in employer brand initiatives:

Mistake 1: The external employer brand and internal employee experience do not align

For an employer brand to be effective, there needs to be alignment between its external messaging and positioning and how employees experience the brand in their day-to-day experiences.

For example, mortgage lender Better.com positioned itself as a tech-driven, employee-centric organization focusing on work-life balance, diversity, and inclusivity. However, employees reported a culture of micro-management, poor communication, abrupt layoffs, and little care for their wellbeing.

Besides the toxic workplace culture, this example highlights the mismatch between the externally promised experience and what employees encountered daily at the company.

Mistake 2: The employer brand is used as a talent marketing tool, as opposed to highlighting a realistic experience that the organization can deliver on

Many organizations believe their external-facing employer brand messages must stand out from their competitors, regardless of whether the brand can meet those expectations. For example, employer brands often highlight flexibility and choice as critical parts of their value proposition for employees. Yet, when employees join, they find rigid policies with limited flexibility to be the reality.

In contrast, consulting firm McKinsey explicitly states that working for them will require long hours, but in exchange, individuals will gain access to working on innovative projects with teams from across the world. In this example, the employer brand provides a realistic perspective of what talent can expect, enabling aspiring employees to decide if they want to pursue this opportunity.

Mistake 3: Employer brand is used to drive awareness and talent attraction, as opposed to a focus on engagement, productivity and retention

A large number of employers measure the success of the employer brand by the ability to create awareness in target talent pools. Although this is important, it only highlights one objective of the employer brand. Employer brand needs to focus both externally and internally, and a clear link to employees’ lived experiences is crucial.

For employer brands to be effective, the same amount of focus is required internally to keep employees committed to the promise of the employer brand. There has to be a strong relationship between employer brand (what we promise), employee value proposition (what we offer), and employee experience (how we deliver). If these three practices are not aligned, employer brands lose all credibility. 

Mistake 4: The employer brand is not connected to the consumer brand and its promise

Often, there is a disconnect between the employer and consumer brands. This is problematic, as employees should be aligned with the overall brand promise. Where this is not the case, employees experience the employer brand as inauthentic.

For example, Boeing’s consumer brand promises safety and sustainability while striving for engineering excellence. Recent events, however, have highlighted that internally, employees were asked to take shortcuts, compromising the safety of their consumers and not living up to the set standards they promote.

A story of employer brand experience at ESPN

ESPN has lived up to its promise as a consumer and employer brand. In the interview with Dayana Falcon, Talent Mobility Manager at ESPN below, we unpack how ESPN authentically and sustainably made its employees fall in love with its brand:

ESPN faced the challenge of increasing internal mobility and making employees more aware of career opportunities within the company. They wanted to help their employees manage their careers effectively while staying true to the essence of the ESPN brand.

As a global leader in sports media, ESPN’s brand focuses on the power of sports to bring people together and showcase how sports can be for everyone. Their goal was to create a strategy that would align this core message with their internal employee experience, helping employees navigate career development within the company.

To address this, the team created a solution that would resonate with their unique brand identity by “gamifying” careers. They developed an immersive ESPN Career Center where employees could visualize their career paths using sports metaphors. For example, career starters were likened to track and field athletes sprinting toward fast growth. In contrast, career shifters were compared to NASCAR drivers preparing for a new race. This approach allowed employees to see their career development through a sports lens, reinforcing ESPN’s identity while offering practical career navigation tools.

In addition to these engaging metaphors, ESPN introduced an “All Stars” program, encouraging employees to submit their best work and have it voted on by their peers. Similar to how fans upvote top sports highlights, this initiative allowed the top 16 entries to receive recognition. 

This program celebrated employee achievements and fostered a competitive spirit, mimicking the excitement and energy found in sports. This alignment of the ESPN employer brand with its consumer brand created a seamless experience for employees, where the essence of ESPN was present in all aspects of their work lives.

Rewards tied into the core ESPN product further reinforced this connection. Employees were given opportunities to earn sport-related experiences, such as VIP tickets to major events like the Masters, making the rewards as exciting and relevant as the content they produced. These incentives were not just workplace perks; they were experiences that mirrored the same passion for sports that ESPN delivers to its audience. By integrating these rewards, ESPN effectively bridged its consumer brand with its internal culture.

Furthermore, ESPN used its own media platforms to celebrate these initiatives, creating the same hype and excitement typically seen around sporting events. Integrating new media channels to share employee successes and initiatives made the internal employee experience as thrilling as the on-air content. This strategy, centered on aligning the ESPN consumer and employer brand with the employee experience, successfully motivated employees and drove internal mobility, creating a workplace that lived and breathed the ESPN identity.

4 actions to implement from ESPN’s employer brand experience

Any brand can use a similar approach to make employees authentically experience their brand. Using the ESPN case as an example, we highlight four actions that all organizations can implement to make their employees experience their brand authentically:

Action 1: Understand the core promise of your consumer and your employer brand

Adopting this approach starts by understanding what your consumer brand promises to clients and how the business delivers on that promise.

For example, Nike’s consumer brand focuses on wellbeing and fitness, prompting consumers of Nike Products to “Just Do It.” Their employer brand uses these same principles by ensuring employees access health facilities and wellness programs and promoting work-life balance.

Action 2: Translate the promise into the employee experiences you want to create

Once you understand the consumer and employer brand experience, you must translate it into set employee experiences.

A good example is HubSpot, which promises technology that helps organizations attract, engage, and delight customers. Their employee experience is based on these same principles and includes specific experiences that drive these principles. Their culture code is a publicly available document, and they use the same techniques to share best practices with their customers and information with their employees.

Action 3: Create a compelling narrative that aligns employees with brand values

To effectively manage the internal employer brand, it’s essential to develop a clear and engaging story that resonates with employees. This narrative should serve as a tool to translate key moments that matter to employees into tangible experiences.

It should also emphasize the core elements of the employer brand promise and demonstrate how the organization is actively turning that promise into a reality within the workplace. This approach helps foster a deeper connection between employees and the brand.

For example, a fast-growing tech company could craft a compelling internal narrative around the theme “Shaping the Future Together” to align employees with its core values of innovation, collaboration, and wellbeing. By highlighting real examples of team-driven innovation, cross-functional collaboration, and initiatives supporting employee wellbeing, the company makes its employer brand promise tangible.

Sharing this narrative through onboarding, internal communications, and employee testimonials helps employees feel emotionally connected to the brand and reinforces their engagement with the organization.

Action 4: Reinforce the critical message through various media channels and testimonials

Once in place, these messages need to be reinforced, and “proof points” need to be found to back up these claims. Employee testimonials are a great way of showcasing how employees experience the employer brand. If done well, they can carry more credibility than formal communication campaigns. 

Getting started in your organization

Reshaping your employer brand experience may seem daunting, but improved employee engagement, retention, and talent attraction make it worth it. Here are guiding questions that HR professionals can use to get started:

• What type of business are we and what do we offer?
• What do we promise our customers and candidates?
• How can we translate this promise to our employees?
• Which HR priority can we use to drive this promise and experience?
• What does this experience look like for employees regarding what they think, feel, and do?
• Who do we need around the table to get started?

Final words

Creating an authentic employer brand experience is crucial to ensuring the engagement and loyalty of your workforce. It’s no longer enough for the employer brand to serve solely as a promise to potential hires—it must be reflected in the daily experiences of current employees. When companies successfully translate what they promise customers into how they design and deliver the employee experience, they are well on their way to creating a fulfilling work environment.

The post How To Create an Authentic Employer Brand Experience: Lessons from ESPN appeared first on AIHR.

Since the late 1990s, HR has repositioned as a strategic partner with a new operating model focused on balancing strategic business partnering, centers of excellence, and operational efficiency in HR delivery. The HR Business Partner (HRBP) model, also called the Ulrich Model or Three-legged Stool, facilitates a proactive approach to aligning HR practices, like talent and culture, with business needs and priorities.

Contents
Business problems the HRBP model solves
5 signs your business is ready to implement the HRBP model
1: Business complexity and size demands a different HR solution
2: Business feels the pain
3: Leadership buys into a different type of HR contribution
4: Willingness to invest in HR in the short term
5: Openness to change in the HR team
When to not implement the HRBP model
Next step: Implementing the HRBP model

Business problems the HRBP model solves

Before we discuss how you can determine whether your business is ready to implement the HRBP model, let’s unpack the common problems businesses highlight when working with HR.

HR is too internally focused

A common criticism of HR is that it is too internally focused, prioritizing internal processes over business needs. This focus often leads to perceptions of being reactive and ‘difficult’ to collaborate with. This focus often leads to the business questioning the value of HR activities and their relevance to what is required to drive business goals. 

HR does not understand the business needs

HR is often seen as disconnected from the business due to a lack of understanding of the market, business goals, and commercial insights.

Our research shows that HR professionals’ business acumen increases with seniority as they become more involved in business operations. Yet, early-stage HR professionals from fields like administration, education, or psychology focus more on learning, coaching, or talent management, missing core knowledge in economics and business. 

HR cannot show the link between business impact and HR activities

HR often can’t show how its actions tangibly impact business results. This makes it seem like HR doesn’t add value. For instance, company ABC spent a lot on an “Emerging Leaders” Talent Program to create a strong talent succession pipeline.

HR might measure success by how satisfied employees are with the program, whether they can use what they learned, and how the program’s costs compare to others. But these don’t show how the program helps the business. If HR doesn’t link the program to keeping high-performing talent, getting them ready for promotions, and boosting leadership across the company, then the business sees HR efforts as nice to have but not valuable.

HR struggles to scale its service delivery efficiently

As businesses grow and become more complex, HR faces pressure to serve a larger employee base, increasing HR costs. Implementing shared technologies and expertise is crucial for cost-effective HR scaling, yet is often not a priority in traditional HR models.

Let’s examine the signs that your organization might be ready to implement the HRBP model.

5 signs your business is ready to implement the HRBP model

Determining when and if the HRBP model is the right fit for your business is essential. Several factors contribute to this decision. The decision to change the HR operating model should not be taken lightly, as it requires a significant change effort in people, processes, and technology.

There are several signs indicating it’s time to move to an HRBP model:

Sign 1: Business complexity and size demands a different HR solution

As your organization grows in size and complexity, with varied needs across different departments or geographies, a one-size-fits-all approach to HR becomes ineffective. When HR needs to support diverse needs across various departments or locations, it indicates that there might be a need to transition to the HRBP model that can balance standardization with localization.

For instance, a company with operations in both the United States and Japan may have to comply with various localized labor laws. When implementing a flexible remote working policy, the policy must be localized to the needs of the US and Japanese employees, balancing standardization with localization.

Assess your readiness: 

• Your current HR framework struggles to keep up with the organization’s growth
• HR processes are becoming cumbersome or there’s a noticeable lag in response times to HR-related inquiries as the company scales
• A uniform HR solution is becoming ineffective as the organization scales
• There is a lack of strategic alignment between current HR practices and business objectives.

Sign 2: Business feels the pain

The organization recognizes the need for HR to go beyond operational and administrative work and sees a professional and strategic HR function as key to success. Often, organizations realize this need after “feeling the pain” when struggling to attract talent, facing retention challenges, or finding that employees are demanding more from the employee value proposition. 

For example, a tech company facing high turnover rates among software engineers starts to see the direct impact on its product development timelines and overall innovation capacity. The leadership team begins to express frustration with HR’s traditional focus on paperwork and regulatory compliance.

They push HR to adopt a more strategic role in shaping the company culture, enhancing employee engagement, and developing a more attractive value proposition for potential recruits. This shift in perspective is driven by the company’s immediate need to retain top talent and foster a more innovative and supportive work environment.

Assess your readiness: 

• Your HR function primarily focuses on operational and administrative tasks, even though your organization requires more robust HR solutions
• Your organization is experiencing difficulties attracting and retaining talent, or, if employees are increasingly seeking more from their employment experience
• There is a gap between business leaders’ expectations regarding HR’s contribution and the current role HR plays.

Sign 3: Leadership buys into a different type of HR contribution

The HRBP model operates in strong partnership with business leaders. Before transitioning to the model, senior leadership should provide sound support to transform HR into a more strategic, business-focused function. This sponsorship from business leaders is critical for the resources, time, and changes in organizational culture needed for the HRBP model to succeed.

Without this buy-in, HR leaders may struggle to fully implement and integrate into the organization.

Assess your readiness: 

• There is commitment from senior leadership towards transforming HR into a strategic partner within the business
• There is a willingness to allocate resources and support changes in organizational culture.

Sign 4: Willingness to invest in HR in the short term

The organization is prepared to invest in the necessary resources for the HRBP model to be successful, including technology, training, and moving other functions that do not belong in HR elsewhere.

The positioning of a potential HRBP model needs to be supported by a robust business case that shows its longer-term value, but organizations should know that there will be increased costs in the short term.

Additionally, the company might allocate funds for extensive HR training programs, ensuring their team is well-equipped to leverage the new technology and methodologies. Moving functions like facilities management to a dedicated department could also be part of this strategic realignment, further optimizing HR’s focus and resources.

Assess your readiness: 

• The organization shows a willingness to invest in HR resources
• The business is prepared to move non-HR-related functions to other departments within the organization
• The organization understands that implementing the HRBP model will increase costs in the short term. 

Sign 5: Openness to change in the HR team

The HRBP model is a significant change, and it is crucial to know whether the HR team is willing to adopt it. Any decision to change should be made by considering the HR team’s feedback and being realistic regarding the need to develop new skills, move into new roles, and work in new ways.

For example, an HR team has traditionally focused on administrative tasks but needs to shift towards a more strategic role per the HRBP model. The team’s openness to learning and adopting new strategies for talent management and business alignment is critical. 

This may involve upskilling in areas like people analytics and business acumen. If the team shows resistance, an HR leader may have to consider recruiting individuals with the necessary strategic mindset and skills or investing in targeted training programs to bridge the gap.

Assess your readiness: 

• Gather feedback from the HR team to gauge their willingness to adopt the HRBP model
• Evaluate the team’s current skill set and whether new skill development, role changes, or operational approaches are needed
• Develop a talent strategy to either build required skills internally or acquire them externally, recognizing that the change may not suit everyone.

When to not implement the HRBP model

Implementing the HRBP model, while beneficial in many contexts, might not always be the best fit for your organization. Here are three scenarios where adopting an HRBP model might not be ideal:

1. Small organizations with limited complexity: The HR model must always fit the business context and needs. If the organization is still reasonably small and has similar requirements and needs from HR across departments, it will be better suited to a traditional functional model. Implementing the BP model will be impractical due to a lack of resources and introduce unnecessary complexity that will slow down execution without providing significant additional benefits. 
2. The leadership maturity and culture: The HRBP model requires a collaborative business leadership team that believes in building strong relationships between different divisions and agrees that HR needs a strategic mandate. If the senior business leaders, especially the C-suite, do not believe that HR should be a strategic function, implementing an HRBP model will not be successful. 
3. Organizations with a highly centralized decision-making process: Companies where decisions are made centrally, with little autonomy given to individual departments or units, may not benefit as much from the HRBP model. The model thrives in environments where HRBPs can work closely with departmental leaders to tailor HR strategies to specific needs, which may be at odds with a highly centralized approach.
4. Organizations undergoing short-term crisis or transformation: For companies in the midst of a significant crisis or undergoing a short-term but intensive transformation, the focus may temporarily need to be on immediate survival or rapid change management rather than on implementing a new HR model. During such times, the organization’s priorities may not align with the longer-term strategic focus and investment required to successfully implement and benefit from an HRBP model.

Next step: Implementing the HRBP model

The HRBP model implementation roadmap

You’ve identified that your organization faces business challenges that the HRBP model can address, and you have the right conditions for its implementation. What’s next? Strategically planning and executing the transition to this model—you need the right tools to get there.

We’ve developed an HRBP Model Implementation Roadmap designed to guide you through your HR transformation and model implementation. The roadmap provides a 5-step process with questions, considerations, and tools to help you implement a highly functional HRBP model.

HRBP MODEL ROADMAP

Final words

The HRBP model holds great promise for organizations that want a more strategic and impactful HR team. However, embarking on an HR operating model change should not be taken lightly, as this undertaking will create a lot of uncertainty and require strong sponsorship from business and HR leaders to be successful. 

If done correctly, the model offers significant benefits to business stakeholders and employees — enabling HR professionals to learn new skills and stay relevant.

The post When To Implement an HRBP Model: 5 Signs You’re Ready  appeared first on AIHR.

This development happened in conjunction with HR moving from personnel and HR management into the Strategic HRM era and redefining its way of work. The model aims to shift the focus of HR from traditional, transactional tasks to more strategic, value-added activities that directly contribute to the achievement of business outcomes, increasing efficiency and cost-effectiveness in the process. This results in improved business performance and agility.

However, despite its continuing popularity, the HRBP model often fails to achieve the expected results, particularly when it comes to efficiency and effectiveness. Let’s look at the benefits of the HRBusiness Partner model when implemented correctly, unpack the seven most common reasons why HRBP models fail, and what steps you can take to fix yours.

Contents
Why organizations use the HRBP model
7 reasons why the HRBP model fails
5 ways to help your HRBP model succeed
Next step: Assess your HRBP model implementation

Why organizations use the HRBP model

The HRBP model shifted the HR departments from primarily dealing with administrative tasks and personnel matters to positioning HR professionals as strategic partners working closely with business leaders to align HR strategies with overall organizational goals.

This foundation lets HR professionals collaborate with business leaders to understand the company’s strategic objectives and develop HR strategies that support these goals. HR is not just the implementer but actively contributes to shaping the organization’s direction.

Here’s why organizations choose the HR Business Partner model to operate their HR function:

• Operational excellence: The three-legged HRBP model consists of HR business partners, HR shared services, and Centers of Excellence (CoEs) led by a strong HR leadership team. Collaboratively, it drives operational excellence by aligning HR strategies with business needs, enhancing resource management, and optimizing efficiency and effectiveness across the HR function.
• Deep industry insight: HR Business Partners (HRBPs) are expected to have a deep understanding of the company’s operations, industry, and competitive landscape. This enables them to tailor HR strategies that closely align with the business environment.
• HR assumes a consultative role: HRBPs serve as consultants to both management and employees. They offer guidance on a wide range of HR matters, from talent management and performance evaluation to change management and employee development.
• Data-driven decisions: In the digital transformation era, the HRBP model emphasizes using data and analytics to make informed decisions regarding talent acquisition, employee engagement, workforce planning, and other HR functional areas.
• Employee advocacy: HRBPs champion the rights and wellbeing of employees, ensuring their concerns are addressed. This encourages a positive workplace culture, which leads to improved employee morale and retention.

7 reasons why the HRBP model fails

The HRBP model may have gained momentum in the 90s, but as you can see, its premise is as important today as it was then. So where is it going wrong?

Let’s take a look at the 7 biggest reasons why the HRBP model fails:

1. Failing to manage the change within the wider organization

It’s an age-old dilemma. While 70% of HR leaders believe their business operations leaders want HR’s strategic consulting capabilities to increase, the business leaders are not ready to work with HR in the role of a key player in the organization.

They often still view HR as ‘reactive order-takers’, instead of strategic and proactive business partners. What comes next is all too common: HR’s attempts to be proactive and strategic are met with skepticism or outright resistance, and HR’s role at the boardroom table is questioned.

Without this partnership in place, the organization will miss out on the strategic value HR could bring, such as identifying talent gaps or aligning workforce planning with business objectives. This misalignment ultimately leads to missed opportunities and ineffective talent management.

2. Failing to build trust within the HR team among BPs, Shared Services, and CoEs

For the HRBP model to work, you need a high level of collaboration, trust, transparency, and a common and shared goal. However, silos often form within HR, with Business Partners, Shared Services, and Centers of Excellence (CoEs) working in isolation.

This manifests itself as internal tension in HR and ‘in-fighting’. There is even a concept of ‘switching allegiance’, where the HRBP aligns more closely with the business leaders, prioritizing their goals over HR or the company’s objectives.

One reason this happens is that HR leadership fails to adequately lead the business partnering part of the operating model setup, leaving HRBPs to look for direction elsewhere.

A lack of change effort within the HR community and the siloed nature of the HR function exacerbates the problem. Businesses have to deal with inconsistent messaging, conflicting initiatives, and a dilution of HR’s impact on the business.

Ultimately, employee and manager experiences become fragmented and confusing, which often results in duplication of efforts. For example, a business ends up with seven different LMS systems because BPs have their own budgets and procure technologies without including CoEs, unnecessarily inflating costs.

3. A strong focus on implementing the “ideal” model

The pursuit of perfection can be any project’s downfall. Businesses get stuck pursuing an ideal or high maturity state of the HR Business Partner model, which is not always attainable or necessary to deliver on business needs.

These organizations forget that there will be a transition period, that both HR and the business need to adapt to the change, and that the new model will take some time to mature. They invest a lot of effort into making it perfect, ignoring the proven fact that it takes time for something to develop. Consequently, efforts are wasted on reaching an ‘ideal’ state that doesn’t align with business priorities.

Many HR and business leaders will be familiar with the result: An organization aims to adopt an ‘ideal’ HRBP model, heavily influenced by best practices from leading organizations in their industry. They focus on advanced data analytics and integration between HR functions to achieve a high level of maturity.

In their rush, they invest a lot of resources in technology and advanced training, overlooking the necessary transition phase for HR and business units to adapt. This leads to frustration, an underutilization of new systems due to a lack of foundational skills among the HR team, and confusion among staff and leaders, delaying the expected strategic benefits of the HRBP model.

4. Failing to contextualize the model for the business

Every business operates within its own unique set of circumstances and challenges, shaped by factors such as industry dynamics, market competition, regulatory environment, and cultural diversity.

Failing to consider these distinct elements and taking a tailored approach to implement the HRBP model can lead to inefficiencies. For example, the ratio of Business Partners to employees should not be based on a standard formula but should take the complexity of workloads and the operating environment into account.

Similarly, organizations operating in different regions or states will need to take local regulations into account. This may impact the role of the BP. Without contextualizing the model, BPs may end up feeling overwhelmed and under-resourced.

This can lead to a perception that HR is a bureaucratic obstacle rather than a strategic partner. That is the exact opposite of what the HRBP model was designed to achieve.

5. Changing job titles instead of upskilling

In many companies that have implemented the HRBP model, the same people with the same relationships are being asked to do something different with a new role title. But have they been enabled to operate in a new way? Do they understand what the new job requirements are? Do they have the skills to deliver on that? Has any training been provided to the new HRBPs? Are they able to change how they engage with the business? 

If the answer to any of these questions is ‘no’, HRBPs will continue to operate in a transactional mode, unable to effectively support business strategy. The lack of genuine role evolution frustrates both HR professionals and their business counterparts.

Consider what will happen when HR generalists are rebranded as HRBPs but no investment is made into strategic HR training. 

The newly titled HRBPs will be ill-equipped to engage in workforce planning or advisory roles, causing tension with managers who expect strategic support. The existing HR team will also lack skills in data analytics and strategic planning to provide that support. What’s more, the HR employees end up under a lot of pressure, frustrated by the lack of clarity as to what their new role should look like and what the new expectations are.

The ultimate result? Increased turnover in the HR department, frustrated managers, and a failed HRBP model. If that doesn’t show the importance of providing adequate training, the fact that high-performing HR teams are 3.5x more likely to invest in HR skill development compared to their low-performing counterparts should.

6. Lacking insight into skill gaps within the HR team

The HRBP model is not one-size-fits-all. It requires different skills than more traditional, reactive HR models. Successful implementation begins with a view of what skills the organization has versus what it needs. This enables HR leaders to make informed decisions on upskilling, reskilling, and redeploying talent to level-set HR teams and build capabilities to deliver on the model.

The old allegory of the shoemaker’s children going barefoot applies: HR doesn’t spend the same effort on understanding HR talent pipelines and pools as it does on other functions.

Let’s look at this in action. When implementing the HRBP model, the goal is for HRBPs to play a more strategic role in the business. Unfortunately, if this is not translated into specific skills and behaviors that the HRBPs should exhibit, it becomes almost impossible to coach the team into better business partnering, even if HR is receiving negative feedback from the business.

However, if an organization utilizes a competency framework for the HRBP role and performs a skills gap assessment, management will have visibility into the root of any problems that arise. This will directly result in the HRBPs receiving the support they need.

7. Lack of operational excellence

A big drawcard for the HRBP model is cost-saving. On the ground, this often looks like reducing job roles at the transactional level without implementing and maturing the technology to support operational delivery. Yet, the model is highly dependent on self-service technologies to work.

What’s more, the effectiveness of the HRBP model also depends on the strength and strategic capability of the leadership team. When leadership teams lack a strategic vision, HR leaders (and HRBPs), are frequently drawn into operational and tactical work.

HRBPs become bogged down in administrative tasks, reducing their capacity to focus on strategic initiatives. This leads to a perception of HR as still being stuck in an administrative role, which undermines the value proposition of the HRBP model.

Centers of Excellence (CoEs) that specialize in areas such as talent management, learning and development, compensation and benefits, and diversity and inclusion must also operate with excellence to develop and implement best practices and innovative solutions. Their expertise and support are critical for enabling HRBPs to deliver strategic value to the business.

5 ways to help your HRBP model succeed

Implementing (or fixing) an HRBP model can be a complex task, and if you’re still here, it’s likely that your organization is currently struggling with one or more of the scenarios we’ve addressed. The good news is that there is a solution.

Avoiding these potential mistakes requires a comprehensive approach across 5 key areas.

1. Strategic alignment and business case development

• Focus on implementing a fit-for-purpose model: Tailor the HRBP model to fit your organization’s unique context, strategy, and culture. This involves analyzing business needs and designing the model to directly support business objectives.
• Build a robust business case: Justify the adoption of the HRBP model by demonstrating how it aligns with business goals and addresses current gaps in HR service delivery. Your business case should include potential ROI, improved operational efficiency, and better talent management.
• Have a clear understanding of the business needs: As an experienced HR practitioner, no doubt you have realized that this is not possible unless you have clear visibility into your organization’s needs.

2. Skills and leadership development

• Conduct an HR skills gap analysis: Before you can invest in skills and leadership development, you need to identify areas where the HR professionals in your organization need upskilling through a thorough HR skills gap analysis.
• Develop BPs’ business acumen: In addition to HR expertise, HR professionals, and especially BPs, should possess or develop strong business acumen to speak the language of their business partners and contribute to discussions from a strategic and operational perspective. In other words, they possess a balanced mix of deep HR expertise and broad business understanding.
• Follow the HR Success Blueprint: Focus on developing the mindset, skill set, toolset, and heartset of HRBPs through thorough training programs. You can also set up training boot camps to level-set your HR professionals’ competencies. Your goal is to build capabilities instead of merely changing job titles.
• Develop a strong HR leadership team: With the right skills development program in place, the next step is to create a senior HR leadership team responsible for leading the model effectively. This team should exemplify the strategic role of HR in the organization and mentor HRBPs in their development.

3. Change management and stakeholder engagement

• Develop a roadmap and implementation plan: To avoid the failure of your HRBP model, you need to implement it thoughtfully from the very start. Develop a structured roadmap and a detailed implementation plan that includes milestones, key progress metrics, and a clear timeline.
• Drive internal change management initiatives: Strong change management and stakeholder management are crucial to navigating the transition smoothly. Educate key stakeholders on the new HRBP model, what to expect from it, and how it will benefit the organization. This involves securing adequate sponsorship, and communicating roles and responsibilities and the value addition of the HRBP model.
• Enable HRBPs to build strong relationships: Finally, HRBPs must establish strong relationships with key stakeholders and business leaders to ensure the model’s success. These relationships are foundational to understanding business needs and effectively supporting strategic objectives. High-performing HR teams are 9.5x more likely to have HRBPs regarded as true strategic partners by business leaders compared to low-performing teams.

4. Technological enablement and operational excellence

• Implement effective self-service tools: Remember how we said that this model is highly dependent on self-service technologies to really work? Success hinges on an investment in HR technologies that automate transactional tasks and enable HRBPs to focus on strategic activities. Moreover, effective self-service tools improve efficiency and user experience for employees and managers.
• Streamline your tools and offer proper training: More technology does not automatically mean your HRBP model will work. If every department invests in a different platform, platforms are not properly used, or even ignored, the result will be poor productivity, wasted resources, and inefficiencies. Investigate the best options, select one, and ensure proper training and change management.
• Take a phased approach: It’s also important to acknowledge that transitioning to the HRBP model is a process, not a one-time event. Plan for a phased implementation that allows for adjustments and learning as you’re rolling out the model.

5. Continuous evaluation and evolution

As the HRBP model evolves, you will need to continuously assess and plan for the HR function’s future needs. This includes workforce planning, talent development, and succession planning to sustain the model’s effectiveness.

• Establish clear milestones and metrics: Track the implementation’s success and the ongoing effectiveness of the HRBP model. This enables continuous improvement and alignment with business objectives.
• Plan for organizational growth: Always consider how the HRBP model will scale with the organization’s growth. You need to plan for the expansion of BPs, Shared Services, and CoEs, work on adjusting ratios of HRBPs to employees, and evolve the model as business needs change.
• Be flexible: For ultimate success, the HRBP model must remain flexible to adapt to organizational changes, industry trends, and external factors. To achieve this, you need to regularly review and adjust HR strategies and practices to remain relevant and effective.

Once that is in place, you will have an HRBP model that delivers on its key objectives, engaged HR leaders and BPs, and an aligned workforce and organization that benefits from a strategic HR partner.

Next step: Assess your HRBP model implementation

HRBP Impact Assessment

You’ve implemented the HRBP model, but how do you know if it’s delivering the strategic impact your organization needs? This is when you must evaluate your HR practices to check whether they effectively align with your business goals and drive the desired business outcomes.

We have developed an HRBP Impact Assessment to help you diagnose how well you’ve implemented your HRBP model. The assessment provides a comprehensive analysis across five critical areas: Strategic Impact, HR Structure, Systems of Work, Stakeholder Relations and, Skills.

Once you have completed the assessment, you receive instant feedback and actionable recommendations in a detailed report. The report also includes a benchmark of your model against other companies.

These results will help you evaluate whether your HRBP model implementation is effective and identify improvement areas.

TAKE THE ASSESSMENT

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