Global Business Driven HR Transformation

Global Business Driven
HR Transformation
The Journey Continues
Preface
See farther down the line

You can turn to the TV talking heads to hear opinions about the future. Or you can turn to the people in the trenches for
an informed view of what really lies down the track.
Global Business Driven HR Transformation is a crosscurrent of rapid changes in culture, technology, law, and leading
practices. Theres no such thing as an organization thats arrived at its destination there are only ones that keep
evolving and ones content to stand still. In our new book, Global Business Driven HR Transformation: The Journey
Continues, Deloitte has mined the experience and vision of its leading field professionals to explore the many future trends
that are shaping the way companies relate to their people.
The Global Business Driven HR Transformation journey is different for every global organization. From established
disciplines like payroll, compensation, and benefits to emerging ones like cloud computing, analytics, talent operations,
and the effects of globalization, Global Business Driven HR Transformation: The Journey Continues provides a spectrum of
resources decision-makers will want to keep by their sides. Because the question is not whether youre going to move into
the future the question is how.
Jason Geller
Principal
Global and U.S. Human Resources (HR) Transformation Leader
Deloitte Consulting LLP
Solution integration
Change analytics
What is truly
meant by global
Global Business Driven

HR Transformation:
The Future Starts Now
HR Business Partner and

Centers of Expertise
Governance and
decision rights
The HR Chief
Operating Officer
HR shared services
and Outsourcing
Cloud HR
9
Talent
Benchmarking
7
10
13
Global privacy
and Security
14
Payroll
12
11
Compensation
16
15
Benefits
Global
mobility
17
Setting the global HR Transformation strategy
HR organization
Workforce
analytics
Numbers behind HR
Enabling HR service delivery
Social
media
Contingent
workforce
18
HR functional perspectives
Global Business Driven HR

Transformation: The Future Starts Now
The global business environment is experiencing
unprecedented change, and human resources (HR) should
develop new capabilities if it wants to remain relevant.
Our worlds social and economic center of gravity is steadily
shifting from west to east. Many developing countries are
facing a new normal characterized by ongoing economic
uncertainty, lingering underemployment, excessive debt, and
stagnant consumer demand. At the same time, emerging
countries are flourishing as their expanding populations
and growing middle classes give rise to a new and powerful
pool of consumers and workers. And all of this is happening
against an unpredictable backdrop of natural disasters,
political upheavals, dwindling global resources, and wildly
fluctuating commodity prices.
These forces have significant implications for the future of
business and HR. And the future starts now.
Next generation HR Transformation

In the past, HR Transformation mostly focused on making
existing HR services more efficient, effective, and compliant.
The unspoken assumption was that HR was already doing all
of the things that needed to be done; it just needed to do
them more effectively, faster, and cheaper.
Now, the rules of the game are changing. Basic HR
capabilities such as efficient and effective service
delivery, integrated HR systems, employee self-service, and
timely access to relevant/correct workforce data are as
important as ever. But today, they are merely table stakes:
basic building blocks that each HR function should possess.
Looking ahead, what businesses should really consider are
HR capabilities that do not just support the business strategy
but enable it. For example, HR can enable business
growth by developing standard, repeatable systems,
processes, and capabilities that make it fast and easy for the
company to enter new geographic markets and integrate
new acquisitions. HR can also enable business growth by
developing new staffing models that fit a modern workforce,
increasingly based on offshore talent, contingent workers,
and global mobility.
Transforming HR to deliver forward-thinking capabilities
like these can help companies respond more timely and
effectively to changes in the business environment,
expand their global footprint, and increase revenue and
margins. The results? Improved competitiveness, profitability,
and growth.
Global Business Driven HR Transformation: The Future Starts Now
Business drivers that affect HR

In order to develop HR capabilities that can enable a
companys business strategy, it is important to understand
the critical drivers that are shaping that strategy. This section
highlights some of the market forces and trends that are
likely to influence business strategy (and HR Transformation)
in the months and years ahead.
This should not be viewed as a broad list, since the actual
drivers are particular to each business, industry, and
region and generally change over time. However, the
drivers presented here are likely to have a significant impact
on the business environment for the foreseeable future,
and are factors that each company should consider. They
also provide the foundation for a broad set of examples to
illustrate the types of issues businesses are wrestling with,
and how companies can proactively develop HR capabilities
to support and facilitate their business strategies.
Growth. Revenue and market growth are essential for
competitiveness and long-term shareholder value. In fact,
growth is so important and pervasive that most of the other
business drivers listed here are in some way related to it.
Until recently, businesses primarily grew by hiring additional
in-house staff. But these days, the formula for growth has
become far more complex involving acquisitions, new
staffing models, new technologies, and new approaches
for finding, attracting, developing, and managing talent.
Moreover, todays companies arent just looking for growth;
they are looking for profitable growth, which significantly
increases the challenge. For HR, the key is to develop new
capabilities that can enable the business to expand as timely
and efficiently as possible.
Globalization and emerging markets. As business

becomes increasingly global, companies should improve
their ability to build and manage a global workforce
often in places they have not operated before. Many
companies are seeing their global footprint shift from west
to east as they pursue opportunities for accelerated growth
in emerging markets. By 2050, the global population is
expected to grow by 50 percent primarily driven by
India and China. Yet 70 percent of the worlds corporate
management is currently located in Europe and North
America. To thrive in this new environment, companies need
HR capabilities that can enable them to effectively realign
their workforces with their changing global footprint. They
should also consider creating an operating environment in
which global and virtual teams can thrive. Critical capabilities
include improved global mobility programs that make it
possible to move employees between countries efficiently
and easily; standardized and repeatable HR processes and
systems for entering new markets; and new staffing models
that use outsourcing, contingent workers, and strategic
partnerships to improve scalability and flexibility.
Cost pressure. Many companies are under constant
pressure to reduce costs. And while HR has made
tremendous strides to manage its costs and improve its
operating efficiency over the past two or three decades,
there is usually room to improve. That said, it is important
to remember that HR must not only be efficient, but also
effective and compliant. The direct impact of improving HRs
internal efficiency is relatively low. To have a greater impact
on costs, HR should focus its specialization on people-related
costs that are outside of the HR budget, such as pensions
and health care. Another way for HR to contribute is by
helping the business reduce the cost of work through
improvement initiatives that focus on things like worker
productivity and management of contingent workers.
Global Business Driven HR Transformation The Journey Continues 5
Talent. Most savvy business leaders know that having

the required talent is critical to business performance
and growth. But putting that insight into action can be
a significant challenge especially in the midst of a
changing talent landscape. Around the world, jobs are
moving from mature markets where talent is expensive and
scarce to emerging markets where talent is cheaper and
more plentiful. This fundamental shift requires companies
to consider developing new HR capabilities for managing
a global supply chain for talent just as manufacturing
companies have had to learn how to manage a global
supply chain for products. Demographic shifts at both ends
of the age spectrum are also having a big impact on talent.
Many companies continue to face a mass exodus of retiring
baby boomers, even as they struggle to deal with an influx
of young workers who have different needs, skills, and
expectations than their elders. This changing workforce
requires new talent management capabilities in areas such
as leadership development, workforce planning, strategy
alignment, and workforce diversity.
Innovation. The days of relying on a small, elite group of
innovators are over. In todays business world, breakthrough
ideas and continuous improvement can come from
anywhere in the organization. To tap into this priceless
resource, leading companies are developing new ways to
help their employees around the world collaborate and share
information. And more often than not, HR is at the center of
the action. Whether the task is developing a people portal
that bring employees closer together; working with the
business to create a more innovative culture; or developing
new rewards programs and performance management
processes to promote innovation, HR has a valuable role
to play in helping companies use innovation as a
competitive weapon.
Emerging technologies. New technologies such as cloud

computing, social media, and mobile devices affect HR in
two ways. First, they help enable HR to deliver services more
efficiently and effectively. For example, cloud computing
can reduce the cost and time required to develop new
HR solutions, and can improve scalability, enabling HR to
effectively and efficiently grow or shrink its capacity and
capabilities in response to changing business needs. Second,
and perhaps even more significantly, new technologies raise
the bar on what HRs customers expect. For example, thanks
to smart phones and the Internet, todays employees expect
the ability to access HR systems and services 24/7 from
anywhere on the planet. Similarly, todays recruits expect
the ability to interact with a company and its HR function
through social media. HR can use emerging technologies to
satisfy these ever-increasing expectations, and to deliver new
innovations quickly and affordably.
Mergers and acquisitions (M&A). Mergers, acquisitions,
and divestitures have become a standard part of business
strategy. Yet HR still tends to approach each M&A deal as a
once-in-a-lifetime event. Also, HRs goals are often limited
to achieving cost synergies and integrating workforces from
an administrative perspective. Although such goals are
important, they are just a starting point. What companies
should really consider are HR capabilities that make
mergers, acquisitions, and divestitures fast, efficient, and
repeatable. These new capabilities should include the ability
to effectively and reliably combine two distinct workforces
into a truly integrated organization that can help the
business achieve its growth goals. They should also include
an improved ability to retain critical talent. The value of a
merger often hinges on the talent being acquired, and if too
many people leave, much of that value may be lost.
Risk and compliance. This business driver affects HR in a

number of ways. On one level, HR must deliver services that
comply with local labor laws and workforce regulations a
challenge that is magnified as a business expands its global
footprint. On another level, HR must also comply with broader
business regulations, such as those related to data privacy
and security. Although these regulations are not specifically
targeted at HR, they often have significant HR implications
due to the highly sensitive nature of HRs work. Finally, HR can
play a valuable role in helping a company manage the change
associated with developing a risk-intelligent, compliant culture
a culture where employees understand the full impact of
their actions and take smart risks that are consistent with the
organizations policies and objectives.
Guiding principles for HR Transformation
When developing and implementing new HR capabilities,
there are a number of useful design principles to
consider. These guiding principles can help you create HR
Transformation strategies, initiatives, and solutions that
make sense for the future.
Business-driven. Consider developing HR capabilities that
align with your companys strategy and business needs.
Focus on high-impact HR activities that can create significant
value for the business, rather than commodity activities such
as transaction processing and administration. Ideally, HR
Transformation should be integrated with business strategy,
so that new HR capabilities are developed in sync with the
business and are readily available when needed. Thats a big
shift from the usual approach, where HR is not involved until
late in the game and may thus become a bottleneck that
slows things down and limits the business strategic options.
Scalable. Establish HR capabilities (i.e., systems, processes,
programs, infrastructure) that can effectively, easily, and
efficiently adjust to changes in business demand whether
that means scaling back in the face of a global slowdown,
ratcheting up for growth, or navigating the twists and turns

of local markets.
Repeatable. Develop demonstrated HR capabilities that
can be rapidly and efficiently deployed in new situations
instead of reinventing the wheel by treating each
new challenge as a one-time occurrence. Repeatability is
especially important for business events that are likely to
recur, such as new market entry, M&A, and global mobility.
Standardized. Create HR systems, processes, and
policies that are as standardized as much as possible.
Standardization can improve efficiency, consistency, and
collaboration across the global enterprise and makes
it easier to move resources across global boundaries. The
default approach for HR Transformation should be why
not standardize? Although there are situations where a
nonstandard solution is truly justified, those situations are
the exception rather than the rule. In the manufacturing
business, theres a saying that 80% standardization beats
100% variation, and the same philosophy applies to HR.
Looking ahead
The business world is changing, and HR should adapt
accordingly. Although efficiency, effectiveness, and
compliance are still important transformation goals, they
now represent the bare minimum that HR is expected to
deliver. What businesses really need are HR capabilities that
do not just support the business strategy, but enable it
making it possible for the business to design and execute
strategic moves that capitalize on HR's capabilities, rather
than being limited by them.
This forward-looking vision for HR Transformation doesnt
end with making HR strategic and getting a seat at the
strategy table. It presumes HR has a seat at the table and
focuses on what HR will do with it.
Setting the global

HR Transformation
strategy
1
What is truly
meant by global
Setting the Global HR

Transformation Strategy
Change analytics
What is truly
meant by global?
Aligned, not alike: What does global mean?

Just saying you want to get global is not enough.
Globalization is near the top of many organizations
agendas, and not without good reason. The growing
populations and economies in China, India, Brazil, and
other fast-developing countries will likely continue to
represent fertile ground for market growth. They also offer
the sustained potential of reduced cost pressure thanks to
labor and regulatory differences. As a result, organizations
are finding it attractive to recast their structures along
global lines. There are three principal reasons: It helps them
manage risk, it can help reduce operating costs to generate
a more effective return on investment, and it can ease the
way to a greater reward through market growth.
However, with all this talk of globalization, there still is
not a clear definition of what going global means.
Defined as everything from market expansion to
end-to-end standardization, it is apparent that not only
are there multiple paths to achieving the global vision, but
determining which path an organization should take is the
critical factor in reaching the globalization goal.
10
Globalization: Building the right infrastructure

is critical
Globalization is not something that just applies at the
business strategy level. The appeal of globalization and the
pressure to get there fast has put an enormous amount of
pressure on functions, such as HR, information technology
(IT), finance, procurement, and legal, as they are the key to
building the global infrastructure and foundation required
to achieve this business objective. And with the need for a
globally diverse and highly mobile talent base on the top
of most organizations global agendas, HR is often at the
forefront of the globalization mandate.
Many HR organizations have responded to this call for action
by aggressively looking to standardize across the relevant
elements of the HR operating model people, process, and
technology. The thinking has been that in order to support
the organizations objective to become global, there needs
to be one system, one support structure, and one set of
processes when it comes to HR activities. But, when looking
at their experiences, those organizations often come to
find that taking global to the extreme may not be a cultural
fit and may be unnecessary to achieve the required level
of globalization. In many cases, HR leaders who push the
global agenda too far find that what started as a seemingly
effective foundation for their transformation yields a step
backward in the evolution of the HR function and a giant
leap backward toward achiving global.
What is truly meant by global?
Globalization is not just about minimizing differences.

It is about making the most of commonalities so that
core distinctions, such as language, customs, regulatory
compliance, education level, technology, and other factors
work to an advantage. It is critical that HR first evaluates and
defines what global means to the business strategy. It is
natural to want to avoid excess duplication and unnecessary
differences from business to business and country to
country. But making everything the same is not always
achievable, and wont always be desirable. In some cases,
enforced uniformity can even blunt regional advantages by
tying each part of an organization to the lowest common
denominator. Instead of bringing disparate operations
together, it can isolate countries or regions that do not fit
the mold, or minimize the particular qualities that foster a
business unit's potential to lead its market.
Case in point: the failed global revolution
The trap of taking globalization too far is often seen in
highly decentralized environments. These organizations
may find that globalization when not focused on those
elements core to business strategy is counter-cultural
and difficult, if not impossible, to implement and sustain.
A decentralized operating model, itself, implies that some
components of the business run independently to preserve
those qualities that provide competitive differentiation.
When HR globalization is pushed too far, it can contradict
the very operating principles that make the organization
successful.
A one-size-fits all doesnt fit

Recently, a large, global, highly decentralized company
decided to outsource much of its HR function. Using
the outsourcing initiative as a catalyst for change, the
company sought to standardize its policies, procedures,
processes, and technology infrastructure across more
than 80 countries. The standardization was core to
making the outsourcing solution work as the company
was planning to achieve a significant reduction in
operating costs.
The companys HR leadership encountered a challenge
in understanding where HR processes truly required
differentiation or uniqueness for specific business units
for true business needs. The companys all-in, global
standardization approach quickly led to serious resistance
to the idea of standardization from leadership, making
the progress toward globalization under the chosen
approach impossible. And, although the initiative on its
surface was designed to meet the organizations overall
needs, business leaders fought with great resistance
to the point where it could not recover. Where did this
company go wrong? By not understanding the tolerance
for globalization at the process level, this organization
went too far and lost the support of the business to
push ahead.
Understanding the options

Cautionary tales like that of the one-size-fits all company
in the sidebar are not unique when looking at attempts by
HR to become global. To proactively avoid these types of
challenges, it is important for HR organizations to consider
the range of options as it relates to becoming global. As
shown in the table below, each option is premised on
understanding overarching business needs and each has
a set of distinct challenges and opportunities. Identifying
where your company places within the spectrum is an
important first step to defining what globalization of HR
means to the organization and can help set the mandate
and support required to drive the initiative forward.
After defining the desired global solution, the next step
is segmenting the regions to which it will apply and
the ways in which the solution or a modified version may
12
apply (See table on next page.). A set of objective criteria or

guiding principles that account for the true business drivers
is helpful. For example, the criteria might include types of
position, location, population size, or complexity of the
workforce mix. Some regions or countries, as defined by
the chosen criteria, may not be best served by the global
solution as much as others, or at all. For example, many
organizations start with a rule of thumb that locations in
countries with fewer than 500 employees should consider
alternate solutions because that employee threshold doesnt
always support a business case unless the market is a growth
target for the organization.
Finally, with all these determinations in place, the HR
team should craft a deliberate road map to deploy the
new HR delivery solution in a sequence that addresses the
populations and implement it according to a timetable that
aligns with the business need that began it all.
Business need
People
Design
Process
Technology
Investments and
challenges
Connecting the dots
Improving the infrastructure
Driving consistency
Seeking a global view of its data to drive

its globalization agenda; often required
in organizations looking to expand into
growth markets and need to effectively
identify and redeploy talent
Seeking to drive toward a more global

business operating model and looking
for the core functions, such as HR, to
mirror that global model to the extent
required to support the business strategy
and model
Seeking significant cost savings

or preparing for a significant
transaction (e.g., merger or
acquisition); as a result, the need for
standardization is high
Roles are standardized to drive security

and workflow within the selected
technology solution; commonality is
typically focused on transactional-type
roles only, not strategic activities that are
performed by HR business partners or
centers of expertise
Roles are standardized for HR operations

supporting countries with large
populations of employees and/or those
components of the HR operating model
which provide core transactional support
(i.e., navigation of the technology
platforms, core transactional processes)
Roles are standardized across the

entire HR operating model (shared
services, HR Business Partners,
and Centers of Expertise); this can
involve organization redesign, skill
and competency analysis, rebanding
or reassessing compensation levels
and potentially workforce transition
Common processes to support the

use of the technology solution only;
processes are standardized to the extent
that they affect the inputs and outputs
for the HR solution
Common processes across critical areas

of focus for the business (e.g., talent
management, workforce planning) or for
a subset of countries which are core to
market growth
Common processes across the

relevant areas of the employee life
cycle (hire to retire) and across the
countries in which the business
operates
Multiple systems are integrated via feeds

and interfaces into a central database for
core reporting and analytics (e.g., data
warehouse)
Core set of common systems focused

on specific areas which are core to
the organizations business strategy
(e.g., talent management, recruitment,
workforce planning)
One global HR system used as the

central point of input for employee
data across all countries in which
the business operates
While the implementation investment

is often low, the operational
maintenance in this type of model can
be high. Because the organization is still
working with a disparate technology
infrastructure, investments should be
made so that data standards are adhered
to and governance is in place to monitor
and guide changes to the applications.
This model is often premised on a

phased implementation approach where
the HR function is looking to globalize
over time and is starting with what
is core to the organizations business
strategy. While this approach can help
to spread the implementation costs
over time, the challenge is sustaining
the organizations ability to handle
constant change to be able to realize
the full vision.
The extent of globalization in

this model requires a very large,
upfront implementation investment;
typically, the biggest challenge
is creating a business case that
can justify the spend required
and still produce a level of either
one-time or ongoing savings for the
organization.
Source: Deloitte
Case in point: the global evolution

The benefits of a thoughtful approach to globalization,
applied by a large, global, and complex organization
whose HR function was trying to tackle its need to get
global quickly, drove an outcome with minimal impact
to its existing operations. HR leadership decided upon
an evolutionary approach to globalization. Attuned to
the companys tolerance for change and to the real
business drivers behind the globalization need, the HR
team understood that trying to standardize too quickly
across all countries would not create a sustainable
model. They recognized from the onset that the
driver for globalization was the need to increase the
organizations presence in critical emerging markets
and, as a result, the primary goal of globalization
needed to focus on providing a global view of the
organizations talent base.
To that end, HR prioritized and narrowed its definition
of global to focus on three core elements: (1)
implementing a single, global HR solution where
employee data could be housed; (2) standardizing the
talent-related processes that affected the organizations
ability to identify, grow, and develop the talent
base (e.g., recruitment, performance management,
succession planning); and, (3) harmonizing only
the core data elements that drive those identified
processes. Without creating a completely standard
HR organization or driving full, end-to-end HR process
standardization, HR was able to support the need for
globalization while establishing the foundation for
future globalization efforts.
14
Selecting the ideal option: It is about aligning to the

business strategy
When considering globalization and identifying the
implications for HR, defining global is key. That effort
starts with truly understanding the business strategy and the
drivers for going global. For HR, this includes understanding
the specific markets that drive the business strategy, now
and in the future. HR should also understand how the
business strategy and environment differ in each specific
market, determine what drives those distinctions, and use
that insight to create guidelines useful to the organization.
For example, some markets may plan more growth than
others and the degree of HR investment in each place
should reflect that understanding.
Once theyve identified the business need, leaders should
define the solution that will drive toward it. As shown
through the spectrum of choices presented above, one
organizations solution might be confined to technology
or it might extend into processes and roles. The solution
may require consistency across the end-to-end processes,
or it may touch only the portions that deal with data inputs
and outputs. Even after an organization has determined
what elements should and shouldnt go global, it should
consider how much local variance the new solution can
permit. Somewhere, theres a balancing point between
global and regional needs.
Specific challenges and practical advice

Change at the scale of a global enterprise is difficult to
transfer from theory to practice. Any level of standardization
can mean that a given business unit or geography has a
perceived loss related to a process, procedure, or system
that it once found core to executing its business objectives.
As a result, it is important to continue to tie HR globalization
efforts to the business strategy and the business drivers.
Each decision whether it is where to focus or what
countries to prioritize will be essential to defining the
context of the businesses mandate to globalize. That
business case-based explanation, whether rooted in strong
financials or purely qualitative benefits, should be central to
the communications plan and change management efforts
throughout the implementation of the solution.
Lots of ground to cover

There was a time when global and standard were near
synonyms. In truth, one-size-fits-all may not have been the
most effective way to visualize global operations; it is even
less applicable in the global economy of today and the
future, and it has seen many challenges for a function as
nuanced as HR.
Even after the implementation, keeping the new solution

moving forward will take a sustained governance model
not just a one-time meeting, but a process that drives
continuous change as needs and capabilities evolve. The
leaders of a global transformation must have tangible
influence across the global enterprise. They should be on
board from the beginning and remain involved, so they can
speak with authority when people challenge the process
and somewhere, someone will. In some organizations,
change like this may alter the structure of HR leadership.
In each case, the new governance structure should be
as global as the business it supports. Some organizations
introduce a new role, the HR chief operating officer (COO),
as part of this structure. This role can serve as a driving
force in sustaining the global solution once implemented.
Whatever the structure, it is important to dedicate focus to
the ongoing maintenance of the global solution as just as
significant investment is made in building it.
In the years to come, a global organization will likely be one

that allows different HR practices in different places to the
extent that they benefit the organization. When operations
in different parts of the world each operate according to
local needs, conditions, and opportunities and when they
have common systems and standards that let them share
relevant information and data then they will be the parts
that make a global organization truly whole.
Adopting the new view described here, gaining critical

leadership support and alignment, and putting it into action
is heavy lifting, and it wont all happen at once. The long
march will achieve the desired outcomes for organizations
that view HR globalization in the context of achieving
defined business objectives and set clear goals that are firmly
grounded in business needs.
1
What is truly
meant by global

Change analytics
Solution Integration
The days of a one size fits all HR service delivery model

delivered by one technology solution, or one service
provider, are gone. Many companies are now searching
for HR service delivery models that meet their specific
needs, are scalable, and can easily adapt to the changing
demands that come with globalization. Achieving the most
overall value from a new model begins with defining the
desired outcomes.
Those outcomes are more effectively achieved by setting
guiding principles to establish alignment with the anticipated
needs of the business. This approach flows through to
designing processes, organization, technologies, and
third-party providers that collectively will deliver the clearly
established desired outcomes. Across the delivery model
solutions, creating an integrated solution that creates an
easy experience for employees, managers, and leaders is
critical to long-term performance.
Across the highly varied HR Transformation experiences
among industries, one common thread runs throughout
many: Most organizations deploy a blend of technologies
and third-party providers in addition to internal capability
to create the end-state model for delivering HR services as
this typically yields the required combination of speed, cost,
and quality.
The blend varies according to the particular needs of the
organization. Typically, it involves the following components:
A core Human Capital management technology.

Organizations may either continue to leverage existing
enterprise resource planning (ERP) solutions, or deploy a
software-as-a-service (SaaS) solution as the central system
of record for employee data that acts as the overall hub
for the solution.
Best-of-breed point solutions. Many organizations are
turning to best-of-breed solutions that can provide
specific functionality with the most efficient/particularized
features. The most common solutions include those that
relate to talent, staffing, and learning and many are being
delivered as SaaS solutions as well.
Portals. Many organizations are deploying new portal
solutions or extending their enterprise portals to wrap
various solutions together into cohesive packages. The
portals can provide employees with direct access into each
of the solutions that make up an organizations blended
models, but also typically provide access to HR-related
content, such as forms, policies, and other related key
decision support material.
Selective and strategic outsourcing. Organizations
are reviewing the areas that make the most sense for
outsourcing on a function-by-function basis instead
of focusing on full-scale outsourcing. The most typical
outsourcing candidates in the blended model include
payroll, benefits, and absence management, but they can
also include other areas depending on the specific needs
of the organization.
Internal shared services. Many organizations are

deploying global, regional, and satellite shared services
centers to most effectively fit the needs of delivering HR
services to their global workforces. The focus of these
shared services centers is to help create systems that
adapt to the demands of flexible and fluid organizations.
This means they can scale to deliver services to the entire
organization while still being specialized enough to
provide tailored services that can meet the specific needs
of a regional or local employee population.
Implementing a blended HR service delivery model comes
with its own set of challenges. To realize the value such a
model can deliver, organizations should focus on creating
a seamless, integrated experience across many elements of
the solution.
Data must flow smoothly across the solutions
Clear ownership of types of data must be defined
Employees must be able to get the answers about their
HR inquiries from external service providers or from
internal service centers that are delivered in a common
and consistent manner to avoid confusion and frustration
These are only a few of the elements a blended HR service
delivery model requires. If an organization fails to deliver
on these elements a blended HR service delivery model can
generate more confusion than cohesion.
18
Case study:
Solution integration at a Life Science client
Spinning off from its parent company into a stand-alone organization presented
many opportunities and challenges for a health care and life sciences company.
The first challenge was how to define the components it wanted in a new HR
service delivery model, and the second was how to implement this solution.
The organization selected an HR service delivery model that combined an
internal shared service center as its core Human Capital Management (HCM)
solution. The selected solutions that made up the HR service delivery model
perfectly suited the needs of the growing organization. It also introduced
increased complexity around the HR business processes. In the new model, HR
business processes, such as onboarding new hires, would now involve multiple
solutions with data passed between each solution.
To deploy its HR service delivery model, the organization developed an
implementation plan that put solution integration front and center. The
organization focused on the integration points between the solutions and
placed special attention on how the data was passed through the solutions
to enable the HR business processes. The organization also made solution
integration a priority of the individual vendors. It insisted that the vendors who
were responsible for implementing the solutions not only considered their own
solutions, but how those solutions fit into the overall solution that was being
deployed by the organization.
By maintaining this focus, the company was able to deploy a solution that was
both comprehensive and cohesive, with an excellent employee experience.
Keeping solution integration front and center during the implementation has
also paid dividends to the organization, which has been operating its HR service
delivery model while globally deploying new integrated functionality to its entire
employee population.
Achieving cohesion. Blended HR delivery models

typically work when the solution integration is built into
implementation from the outset. When looking at the
elements of the overall model, an organization should share
a clear vision of how it wants the elements of the solution to
integrate and operate in the future state.
Achieving this integration is not easy. It cannot be an
afterthought. Integration should be a primary driver of
the design of the overall solution. Embedding solution
integration activities and considerations into the required
phases of an implementation is essential. Listed below
are some of the specific elements to consider when
implementing a blended HR service delivery model.
Governance. An organization should set a clear project
governance structure that includes the elements of the
overall solutions, such as vendors and internal functions.
This structure permits the management of implementation
activities, and can evolve into a structure that will support
operations ongoing post go-live.
Solution integration guiding principles. The organization
should define a number of master principles that will apply
to the design of overall solution. Establishing these principles
will help drive a cohesive and broad design across the
elements of the solution.
Solution integration oversight. It should be the

responsibility of one or more specific people to focus on the
oversight of solution integration for the implementation,
and on an ongoing basis. Maintaining a focus on solution
integration during the implementation and after go-live will
help the solution adhere to the guiding principles and not
fragment into disparate parts.
Data governance framework. Data that flows across
multiple solutions must depend on a common framework
that establishes clear ownership of data elements (such
as employee data, benefits data, payroll data, and other
categories), and defines the process and policies for
dealing with issues, updates, and correction specific to the
data across the solutions. Not having a data governance
framework in place introduces a significant risk that data will
likely become out of sync and incorrect as it moves between
each solution. Establishing the data governance framework
during the design phase can also provide a clear road map
for fixing data issues that come up once the solutions
are live.
When organizations take these considerations into account
in implementing and operating a blended HR model,
the result is more likely to be a solution that operates in
a cohesive manner. This cohesion is most visible when
employees use the solution. Employees and managers
understand the tools they need to use to carry out
day-to-day HR activities, and it matters little to them that
they may actually be using multiple solutions that have been
integrated together.
Challenges and mitigation strategies for deployment

Deploying a blended HR service delivery model can be very challenging, even when organizations focus on solution integration
throughout the lifecycle of the implementation. Here are some of the typical challenges that arise and some strategies to
leverage to overcome them.
Vendor conflicts
Internal function
conflicts
Lack of participation
and involvement of
the business
Challenges
Mitigation strategies
When organizations use different vendors and

solutions, they often experience conflict over
implementation methodologies, timelines, and
approaches. Vendors typically want to use the
approach and methodology that works for their
own solutions and services. Their concern centers on
what is in their contract, not on the overall solution.
Write provisions into vendor contracts that contractually bind them to play
nice in the sandbox. For example, make implementation fees contingent on a
common approach defined by the company.
When different functional groups within the HR

organization, such as benefits, compensation, or
payroll, manage different vendor relationships or
when responsibility for selecting different vendors or
solutions falls to a particular group the potential
grows for dissent within HR and disaster for the
implementation. If left to focus solely on what works
for their particular functions, groups may end up
choosing solutions that do not integrate well with
other solutions, or negotiating contracts that do not
induce providers to integrate into a broader service
delivery model.
Create a cross-functional team for vendor selection, with representatives

from all functions that will participate in the overall solution. Include IT and
finance as well, especially if payroll is in scope for the implementation. A team
that understands the overall requirements for each functional area will help
establish a collective approach that focuses on the solutions and vendors that
suit the overall needs of the organization.
Designing a blended HR service delivery model

without the participation of the business can
have serious potential risks. Among these risks
are designing an overly complicated solution that
doesnt factor in the core needs of employees and
managers the primary users of the solution.
Call upon a business advisory group to get user input throughout the
implementation. The basic nature of a blended HR service delivery is
complicated more solutions and providers are providing selective services.
These services must be presented to employees and managers in a broad,
cohesive, and integrated manner. The how, who, and when of using
these solutions must be self-evident as well. A business advisory group can be
a sounding board for solution-related decisions and help make the eventual
solution more in touch with the needs and understanding of the users.
Engage vendors as early as possible in the planning phase and bring the
vendors together to conduct joint planning. Make the vendors aware of the
integration points and critical dependencies that exist between the different
parts of the solution. Instill the spirit of the whole as early as possible.
Consolidate vendor governance under a separate function. Ongoing

management of vendors and solution providers should be done under a
separate group that evaluates and manages the elements of the solution. This
structure will prevent any vendor from receiving preferential treatment, and all
will have to perform under common terms and
service level agreements (SLAs). The outside group should gather the input of
the functional groups but ultimately be in charge of the vendor relationship.
When dealing with a blended HR service delivery model, a detailed change

and communication plan is required. Employees must clearly understand what
is changing, when it is changing, and how. This information also needs to be
tailored to individual groups so that the message
20
Starting the journey

Deploying a blended HR service delivery model has its
challenges, but adopting a focus on solution integration
can make these challenges negligible, and the benefits far
outweigh them. Organizations should select the solutions
and providers that fit their needs and not feel they must
adopt a one-size-fits-all model for delivering HR services to
their employees. Keeping the focus on how all the parts will
fit together, from the initial vision of the future state solution
through to when the solution is deployed, will help that
vision meet the reality of what actually goes live.
1
What is truly
meant by global

Change analytics
Change analytics
Complex basics: Managing change as part of

transformation
Effective change analytics can help align the
organization to improve everything else youre doing.
Transformation is change. No insight there. But when HR
organizations manage transformation, do they manage
change well enough? Successful HR transformations that
address requirements include change and they invest as
much as 15 percent of the overall transformation budget in
change management, (2003 AMR Research Report). Real
life experience confirms that when a transformation
team is well experienced in change management the
transformation achieves and often exceeds its
financial and qualitative goals.
So there is a strong case for making sure an HR
transformation builds in enough change management skill.
The question is: How much change management is enough?
What does the right approach look like?
One useful determinant is the way an organization defines

change management to begin with. Too many leaders
view it as nothing but a vehicle to drive user adoption in
effect, an institutional-level behavior modification exercise.
They focus almost entirely on pre-go-live measures to raise
user awareness and alter activity patterns.
A more mature view of change management goes broader
and deeper than that. True change management is a risk
mitigation approach that identifies and addresses critical
issues around strategy, process, technology, and people over
the complete lifecycle of an HR transformation program.
Key to this approach is a seasoned understanding of the
points where HR transformations can fail. By developing
a comprehensive view of transformation risk, a change
team can then mitigate each risk with targeted strategies
and tactics and systematically remove the obstacles to
transformation success. One of these common risk areas
of course is user adoption, but there are many others that
often go unnoticed until it is too late. With a risk mitigation
approach to change management, the result can influence
the quality of the business case, strengthen leadership
alignment, improve process design, and support successful
adoption of processes and tools. Change is therefore crucial
to realizing real business benefits, driving growth and
retaining key talent by ensuring the HR transformation is not
thwarted by unforeseen challenges.
Change analytics
Become experts in program risk

Intelligent change data before, during and after
implementation is fundamental to identifying resistance
hotspots, understanding where exactly to make change
investments, and to help maintain strong leadership
alignment around where the implementation challenges are
and what to do about them.
From the moment an organization plans a transition, it
should make sure to invest time in studying its own risks.
These things cant be left to chance planners should map
and study leadership alignment levels, employee readiness,
change impacts, geographic readiness, and user adoption
levels related to the proposed transformation changes.
Here are some of the questions to ask to ensure that your
assessment of program risk is broad and deep enough
before moving to change solution development.
Are you tracking leadership alignment levels to ensure
that there is strong agreement around the HR operating
model and vision for the transformation?
Do you have change readiness tools to objectively
assess employee readiness for the changes that are
coming? Knowing readiness levels early and consistently
throughout an HR transformation is a critical input.
Are you analyzing the change impacts resulting from
your HR transformation? Is there a disciplined approach to
identifying, mapping and translating change impacts into
change management strategy for your transformation?
24
Do you know the level of geographic readiness across

your organization, to ensure that your implementation
roadmap has the right sequence and accounts for
preparations that need to be made in advance?
Are you working on a training needs analysis, to
determine what capabilities the new environment will
require of your employees? With these capabilities
carefully mapped, you can determine where the gaps
are to the current capabilities. This gap analysis helps to
identify what kind of training will be needed to ensure a
smooth transition.
Are you developing a user adoption measurement
strategy that clarifies post-go live goals and how you
will measure your progress against them? Measuring user
adoption will indicate where additional intervention may
be required and will help you continually improve change
management throughout the transformation.
What could be so bad as to put a transformation at risk
of failure? Why all this talk about risk? Our experience
with global HR transformations shows that risks pop up
everywhere and can be just as lethal at the start of a
transformation as they are near go live. Strategic alignment
levels, for example, often are misleading at first glance.
Leadership teams are prone to believe they are aligned
and agree about the general direction of their respective
programs, but when prodded and studied at close range,
the strength of those alignment levels often doesnt hold
up. What one leader feels is a critical strategic objective,
another feels is not so critical, and they disagree about how
Change analytics
the objectives should be translated into tangible outcomes.

Such small, seemingly inconsequential cracks in alignment
can cause huge, negative ripple effects down the road.
Disagreements at the top can serve as ammunition for
employees at the lower ranks who dont want the change in
the first place.
Investing in the right change analytics tools and measuring
alignment, readiness and adoption early and often can be
the difference between a transformation that succeeds
and one that fails. HR Transformation leaders who think
about Change Management as much more than a function
of driving end user adoption will be more likely to avoid
the typical pitfalls of many transformation efforts. Change
analytics data can be the driver for leaders to establish
sufficient support to adequately mitigate risks and close
readiness and alignment gaps in time helping to more
quickly realize the business imperatives at the heart of the
transformation.
A market-leading approach to studying change
readiness
Key to your change analytics approach will be using tools
that are well-tested and respected in the market. One such
tool is Deloittes proprietary approach to assessing change
readiness As One. Based on a best-selling book of the
same name, the As One approach employs a diagnostics
survey that many Deloitte clients currently use around the
world to understand how ready their employees are for
the transformation they are about to undertake.
The As One diagnostic survey can help organizations

measure readiness in three ways:
To what extent do leaders and employees understand and
support the HR priorities?
How strongly do leaders and employees identify and
connect with different parts of the organization (such
as geographies, functions, divisions, and the corporate
center)? This can inform where they prefer to get their
information and whom they will listen to the most
throughout the HR transformation process.
How do people in the organization prefer to work
together employee to employee? Employee to leader?
These collaboration models can help predict the way
a large-scale transformation will be received, and where
challenges may lurk.
The results of the As One diagnostic survey are easily
manageable in a self service tool that filters survey scores
against a host of demographics and other inputs. These
results are not meant to locate weakness in a team. On
the contrary, they are designed to locate opportunities to
strengthen a teams ability to work together effectively.
When people work together during a big transformation,
their ability to do so may be the most important metric
of all.
Change analytics
Change solutions and the silent sound of success

As you utilize a host of change analytics tools to locate and
assess program risk, solving that risk becomes an equally
important focal point of the change team. Some of the
questions your change team will need to address from a
solution standpoint include:
Do you have a leadership alignment plan that will address
all of the gaps in support, overcome any confusion, and
help turn your leadership team into strong champions of
the transformation approach?
Are you employing formal change advocates, selected
from throughout your own leadership ranks, who can
help develop the approach with the change team and
serve as champions for the initiatives you launch? Involving
change advocates early increases perceived legitimacy of
change management efforts and helps bring the rest of
the organization along to increase commitment to the
future state.
Do you have the right training strategy to help prepare
HR team members whose roles may change? The
right training strategy will consider the needs of global
stakeholders and will be aligned with other changes taking
place in the organization.
26
Are your stakeholder engagement tactics well-planned

and well-executed? Are they achieving measurable
gains in sentiment and behavior change? Among other
considerations, timing is important for stakeholder
engagement. Engaging employees, managers and HR too
early or too late can create unnecessary anxiety in the
organization. Transparency is imperative throughout.
Do you have a communication plan that strikes the right
balance of relevant content and appropriate style and
tone? Are your messages well timed and well written? Are
they written in the language of the audience to ensure
theyre actually digesting the material?
Is there a global component to your HR transformation
that makes use of both regional and local change
resources, engages country and local HR leaders, and
drives the organizational readiness approach down to the
country-level roadmap and timing?
Are you coordinating change strategy and tactics
across your entire HR transformation program? This
includes maintaining awareness of other initiatives in the
organization that may affect the same resources or impact
implementation timing.
Change analytics
Having the right change solutions to mitigate each of the

risks identified and to prevent risks that havent had a
chance to take form yet will be a critical part to your
change management approach. So how will you know
when its working? What are the signs of success? Often a
successful result proves anti-climactic for leadership teams,
because success typically is accompanied by a prolonged
silence. Nobody complains. There are no spikes in calls to
the shared service center. Emails do not flood the program
inbox. Meetings are not consumed by rudimentary questions
that should have been predicted and addressed earlier in the
change approach. Silence therefore is a great outcome.
More often than not, however, there are ongoing questions
and concerns. And the good news is that the analytics
and solutions outlined above are designed to catch those
early, and address them quickly. This is why the change
management team and approach needs to be vigilant at
every stage of an HR Transformation. Risks are like weeds.
They find ways to pop up when youre not looking.
Understanding the nature of those risks, and having
strategies to mitigate them, is therefore a very simple
equation that helps focus change efforts and ensure a
positive HR Transformation experience.
HR Organization
28

4
HR Organization
The HR Chief
Operating Officer
Governance and
decision rights
HR Chief
Operating Officer
Despite the demonstrated benefits of HR Transformation,

business executives and HR leaders alike continue to
voice frustration with HRs ability to deliver value. With
no shortage of talented people doing great work, what is
the problem? All signs point to the need to rethink how
HR organizations deliver on the intent of supporting the
business with a new role designed to drive performance
improvements across the entire HR organization. The
The HR Chief Operating Officer (HR COO).
The business wants more not less from HR
Most business leaders today fully understand the value of
people. They can clearly articulate their top people priorities
and are more than willing to invest to get what they need.
At the same time, chief HR officer (CHRO) leaders know
they have to deliver what the business needs and wants. As
a result, when business and HR leaders sit down to work
together, they are often focused less on what needs to be
done and more on how.
Predictably, business leaders want better, faster, and
more compliant HR services at a lower cost and an HR
organization that can turn on a dime to support their
ever-changing business strategies and goals. Unfortunately,
many HR organizations continue to struggle to meet those
demanding requirements.
30
The challenge of getting to better, faster, cheaper, and

more agile is daunting for any organization, but it is doubly
difficult for HR organizations, where many leadership teams
still operate with structures and roles that have been in place
for decades.
The traditional model for HR leadership
Today, a typical corporate HR leadership team is led
by a CHRO, and includes HR vice presidents (VPs) for
business units, HR VPs for centers of specialization (e.g.,
compensation and benefits), a VP for HR operations, a VP for
HR technology, a head of legal for HR, and an HR controller.
Some leadership team members have dual reporting
relationships, which can include direct lines to the Chief
Information Officer (CIO), Chief Financial Officer (CFO),
Chief Administrative Officer (CAO), or chief legal counsel.
Within this familiar structure, leadership team roles and
responsibilities are predictable. For example, most HR VPs
for business units are naturally focused on business unit
HR issues. Centers of Expertise leaders concentrate on HR
policies and programs. Leaders for HR shared services and
technology manage operations and technology and so on.
HR Chief Operating Officer
Chief HR officer
Business
unit A
Business
unit A
Business
unit A
HR
Technology
HR
Operations
Talent Centers
of Expertise
Compensation
Centers of
Expertise
HR legal and
compliance
HR
controller
HR special
projects and
program/
portfolio
management
Benefits
Centers of
Expertise
Learning
Centers of
Expertise
Global
mobility
Centers of
Expertise
Source: Deloitte
In terms of operating model, HR leadership team members

typically have their own budgets and resources and are
responsible for developing an annual operating plan to
support their priorities and projects. Implementation,
however, is often the responsibility of an IT or shared
services group, which may have its own resources and
budget. Members of the leadership team and their
organizations provide implementation support as needed,
such as communications assistance or loaned resources.
This traditional model works well as far as it goes but
it does not go nearly far enough. For example, when
coordination is required across multiple functions and
business units such as merger integration or enterprisewide rollout of a new HR initiative the model falls short.
In those circumstances, integration is typically handled on an

ad hoc basis through an informal network of go-to people
in the HR organization. The network steps up and pulls
together to handle deals when they happen, with leadership
often provided by an experienced team of HR leaders.
Effectiveness hinges on relationships and special effort rather
than reliable processes, lines of authority, and structure. As
a result, there is often a gap between the expectations of
business leaders and what HR is set up to deliver.
Whats not working?
Most HR leaders can point to an innovative service they
developed to solve a critical business challenge. Their
stories have a familiar theme: the work required a lot of
cooperation, goodwill, and effort by HR people who stepped
up to the challenge to get something important done. The
examples are hard to replicate because they required huge
commitments of time and energy.
Similarly, many HR organizations have gone through
effective HR Transformation programs. By design, these
programs come to an end point at which the transformation
of current HR services (or the development of new HR
services) stops. There is rarely a structure in place to sustain
the cycle of continuous performance improvement.
These two scenarios illustrate a fundamental dilemma. On
one hand, most HR leaders understand that the business
understands the value of people and is willing to invest
in people more than ever before. Yet on the other hand,
their HR organizations are not prepared to take advantage
of this opportunity with their current structures, roles, and
processes. HR leaders understand this dilemma and want a
solution to this problem.
Rethinking structure
To help HR organizations seize this business challenge,
incorporating a simple step in the evolution of HR
organizations can bring significant value: a division of
responsibility between HR executives who focus primarily on
what needs to get done and those who focus on how it gets
done. That step requires creating a new, senior HR role
the HR Chief Operating Officer.
The HR COO is the leader who focuses on how HR services
are delivered, as well as the design, development, and
implementation of HR services. The person in this new role
will drive efficiency, effectiveness, cost, and compliance for
the HR services. The table on page three shows the division
of responsibility in the HR leadership team when an HR COO
is established.
Getting it done
Like any other leadership position, the role of the HR COO
should be defined to establish clear lines of responsibility
and reporting relationships. However, because solid line
reporting relationships will not typically exist, the influence
element of the HR COO role should also be well defined.
Responsibilities
Current HR service delivery, as well as driving
improvements, to provide efficient, effective, and
compliant HR services
Design, development, and implementation of new
HR services
Development and implementation of business-focused
HR metrics
Delivering reliable workforce data with corresponding
workforce reporting and analytics
Development of the overall HR budget and analysis of
total HR spend
32
Development of a vendor management plan

HR compliance and risk management
Project management, including building capabilities for
HR, to manage projects, such as Six Sigma in HR
Development and implementation of an HR technology
strategy to support the business needs
Structure
The HR COO role will generally have a combination of solidand dotted-line reporting relationships. Below are examples
of reporting structures seen in organizations that have
effectively embraced the role of the HR COO. (See Samples
1 and 2.)
Influence
The ability to exert influence is very important in leadership,
but it is even more critical in structures with multiple dottedline reporting relationships. HR COOs and their direct and
indirect reports need a solid understanding of how goals are
set and how performance will be evaluated. This requires
clarity about who influences and shapes day-to-day work, as
well as long-term career needs of these individuals.
In search of Superman or Wonder Woman?

At first blush, the list of qualities youll want from
an HR COO may seem daunting. The role requires
a mix of experience in HR, finance, technology,
operations, and executive leadership with a focus
on HR service delivery and operations. Thats asking a
lot especially when you add in responsibilities for
regulatory, risk, compliance budgets, and for managing
change. But none of this means the HR COO has
to be a superhero, not at all. The HR COO is part of
your leadership team. The desirable/effective person
will balance and complement other executives, using
influence and alliances to get the job done.
Strength through business results

The HR COO is a new and evolving role, but from
organizations that have taken early steps in this direction,
there are clear indications of common themes that can
drive effectiveness.
For starters, the HR COO role depends on having a clear
and communicated mandate to drive HR service delivery,
with responsibility for HR efficiency, effectiveness, and
compliance. As such, it requires full support of the Executive
Committee and the HR leadership team. The HR COO will
need to develop working relationships with members of the
senior leadership team. One way to garner that support is
to establish shared HR leadership team goals that are part of
each members performance objectives.
Looking ahead
To put it simple, the HR Chief Operating Officer is not a role
that someone can be phased into over time nor can it be
piloted. It requires a depth of conviction from CHROs who
know they are not yet delivering the services that the
business needs.
But the effort is worthwhile. Positioned appropriately, the
HR COO can be the key to creating a high-performing,
well-integrated HR leadership team. There is tangible value
to be realized, but it will likely take a departure from the
current model.
Division of HR leadership responsibilities with an HR COO

Role
Key responsibilities
Key focus
CHRO
Provides HR leadership
Focuses on business-HR alignment
Develops HR strategy
Owns HR governance
HR strategy
Business-HR alignment
HR COO
Drives implementation of new HR

services responsible for ongoing HR
service delivery
Drives efficiency, effectiveness, and
compliance
HR operations
HR efficiency, effectiveness, and
compliance
HR operating costs
Business unit
HR VPs
Develop business unit HR strategies

and plans; drive business-corporate HR
alignment
Business unit HR strategy

Business-HR alignment
HR Centers of
Expertise VPs
Develop HR policies and programs

related to functional areas (talent,
compensation, benefits, Learning, etc.)
HR policy and program effectiveness
Source: Deloitte
In the months and years ahead, more and more CHROs will likely embrace the HR COO model as they strive to crack the
code for operational excellence in HR service delivery. Recognizing that even the most experienced people cannot excel in a
suboptimal operating model, they will likely make the call that only leaders can make to change the operating model of
the HR organization to harness the power of how.
Sample 1: Formal and structured HR COO model
CIO or CAO or COO
Chief HR officer
Business unit A
HR Center of
Expertise leader
HR COO
Business unit A
Talent Center of
Expertise
HR operations
Business unit A
Compensation
Center of Expertise
HR technology
CIO
Benefits Center
of Expertise
HR controller
CFO
Learning Center
of Expertise
HR legal and
compliance
Legal
Global mobility
Center of Expertise
HR vendor
governance
Procurement
HR special
projects and
program/portfolio
management
Source: Deloitte
34
Sample 2: Influence-based HR COO model
CIO or CAO or COO
Chief HR officer
Business unit A
HR Center of
Expertise leader
HR controller
Business unit A
Talent Center
of Expertise
Business unit A
Compensation
Center of
Expertise
Benefits Center
of Expertise
Learning
Center of
Expertise
HR legal and
compliance
HR COO
HR technology
HR operations
HR vendor
governance
Procurement
HR special
projects and
program/portfolio
management
Global mobility
Center of
Expertise
Source: Deloitte

4
HR Organization
The HR Chief
Operating Officer
Governance and
decision rights
HR Business Partners and

HR is at a turning point. For a decade now, it has been

undergoing a process of transformation. But for many
organizations, this process has increasingly failed to produce
the results expected of it. During these times of rapidly
changing economics, HR is faced with a stark choice: It can
either evolve and make a significant contribution to the
business or be diminished and dispersed into the business
and other functions. Implementing an effective business
partnering and Centers of Expertise model is one way to
accelerate the evolution of your HR function.
Business-driven HR Business Partners and Centers of
Expertise
Many organizations struggle to understand how HR
Business Partners and Centers of Expertise should interact
to contribute to the business. In particular, the way both
roles are structured and positioned can be a fundamental
challenge. There is value in bringing together HR Business
Partners and Centers of Expertise to operate like a
business-focused internal HR consultancy on specific
projects and initiatives.
In this model, HR Business Partners form the vertical go

to market account management teams, with Centers of
Expertise forming the horizontal specialist teams. Overlaying
this, organizations are developing strategic capability areas
(or propositions) in alignment with specific business
priorities. These capabilities respond to critical long-term
strategic organizational capabilities (e.g., M&A activity,
change acceleration, culture change, talent, and growth).
For example, a leading global financial services organization
allocates HR Business Partners as project managers on M&A
integration projects for a particular length of time before
rotating them onto the next business project. They reach out
to their Centers of Expertise teams for specific support on
an as-needed basis. These Centers of Expertise teams then
form solution SWAT teams which can be focused on the
strategic priorities of the business.
HR Business Partners play a role like that of an account
manager deep knowledge of the client matched with
deep knowledge of where to go to bring services and
solutions. Positions are filled with people who have strong
project management capability, who are adaptable to new
projects, and who can draw the most out of the Centers of
Expertise for specialist input.
HR Business Partner and Centers of Expertise
What this means for HR Business Partners

The skills make the difference. HR Business Partnering
empowers highly competent, credible account managers
operating at senior levels of the organization to orchestrate
solutions designed to solve organizational priorities.
To achieve this, it is critical that the business recognize the
HR Business Partner is a serious contributor. Only when the
business partner can initiate a strategic conversation with
business leaders, armed with potential solutions, will he
or she be thought of as a strategic player. The HR Business
Partner role should, therefore, concentrate on the following:
Focusing on strategic issues that contribute to the growth
and competitiveness of the business
Taking a big picture perspective regarding the
organization's priorities and goals
Having the personal impact and credibility to influence
critical decision makers
Being the diplomat and negotiator to align the agendas of
the business and the HR function
Having the breadth of knowledge of the services and
solutions offered by the Centers of Expertise
Being excellent project and account managers with
demonstrated knowledge of the business
Producing results that matter. HR Business Partners work
well when aligned with strategic priorities tying business
drivers to measurable targets, as seen the adjacent table.
A common pitfall for HR Business Partners has been an
emphasis on the title over the requirements of the role. A
strong vision of business collaboration focuses on business
outcomes and value rather than title or responsibilities.
38
Business outcomes
HR Business Partner priorities
Identify talent strategies for entering new markets

Sustained revenue Predict requirements and source critical talent to grow
Refocus the HR function on supporting high growth
growth
Help the business manage M&A
Example target
Double size of
senior workforce
population in a new
market next year
Profit growth and

cost reduction
Manage the change process associated with cost reduction

initiatives to minimize productivity impacts
Help business evaluate and implement outsourcing and
off-shoring strategies
Focus on reducing HRs own operating costs
Reduce
organizational
costs for business
unit by 5%
Working smarter
with speed,
flexibility, and
adaptability
Align performance and rewards with speed, flexibility,

and adaptability
Create communications and tools to reinforce culture
Improve HR processes and service delivery
Source the right talent to perform
Increase average
product to market
speed by 20%
Customer loyalty
and retention
Assess employee loyalty and retention and potential impact on

customer loyalty/retention
Increase understanding of customer acquisition strategies and
confirm that HR programs are supporting (e.g., incentives,
performance, learning)
Increase customer
satisfaction by 10%
Anticipate potential leadership gaps and develop sources of

top talent
Strategy execution
Build execution capability into leadership development
capability
programs
Source: Deloitte
Improve leadership
scorecard
performance
by 10%
What this can mean for Centers of Expertise

Alignment to business challenges. If HR is to meet
the needs of the business, it needs to move away from
traditional, functionally aligned roles to business-aligned
roles that can reflect the projects and programs that
the business is focused on. With alignment on solutions
for business challenges like M&A, talent management,
absenteeism, organizational change, and others, the Centers
of Expertise can engage more with the business by having a
naturally common ground upon which to forge relationships.
This does not mean the end of traditional Reward, Benefit
and Learning Centers of Expertise, but it does require HR
organizations to rethink the way they provide support
support for both functional and business focused needs.
One global bank has taken an uncommon approach. To
avoid building a costly fixed headcount, the bank has
collaborated with external providers to meet peak demand
for HR specialist resources. Through this model, HR can
continue to deliver on its day-to-day commitments and,
when the business needs additional specialist skills, it
parachutes in external support to help on a project-byproject basis.
Focusing on solution delivery. Centers of Expertise need
flexibility to grow and shrink as the business needs evolve.
This model also requires project management skills as teams
come together to develop and deliver solutions and then
disperse. It requires different styles of leadership and career
management models to cope with the change from the
traditional, time-served model.
The distance between the Centers of Expertise and the

business is shrinking. Centers of Expertise should operate in
a fully, integrated way with the business to deliver what has
been designed and to measure outcomes. Like the business
partners, the role of the Centers of Expertise will evolve
and require stronger business acumen. Translating their
specialist knowledge into this new more business-focused
environment requires different skills from those valued by
Centers of Expertise today.
Delivering the vision of HR Business Partners and
Centers of Expertise. Like never before, companies should
consider skilled, abled, difference makers as HR Business
Partners and Centers of Expertise who can spearhead HRs
role in responding to business challenges. Our research with
global clients has identified some trends that are appearing
in the way organizations approach HR Business Partnering
and Centers of Expertise.
Trend #1: The HR Business Partner and Centers of
Expertise as a floating SWAT team
More organizations are creating pools of HR Business
Partners aligned with members of a number of Centers
of Expertise (or internal HR consultants) that can be
reassigned to projects on the fly, rather than being
permanently assigned to a particular job. This allows HR
to respond to changing business needs. In addition, these
resources are not aligned to a particular business unit,
which helps them maintain their objectivity. There could
be an argument for creating a two-tier business partner
and Centers of Expertise model: One level focuses on
business-critical strategic issues and opportunities, while
the other supports the business-as-usual and day-to-day
solutions. The business context will drive the number of
people in each of these roles.
Trend #2: Quality not quantity

Organizations are placing a greater emphasis on attracting,
developing, and deploying the most effective HR people for
the job. To deliver in these challenging roles, the applicable
skills and attitudes are vital. Success is supported by the
following:
A move away from practical, experiential learning
interventions that use real examples and business
case studies
Use of a range of initiatives that mix classroom training
with coaching, community events, and self-led learning
to embed behaviors
More focus on nurturing an effective learning culture
and encouraging individuals to take responsibility for
their own learning
More understanding of how powerful it can be to
harness the network of knowledge across the Centers
of Expertise and HR Business Partners through tools,
such as social networking and collaboration software
not just removing duplication of work, but actively
encouraging innovation
Trend #3: Developing that pipeline
Filling these roles is a critical challenge. Sources of talent
for Centers of Expertise and HR Business Partners of this
new breed include external consultancies, business project
managers, finance and procurement transformation
experienced project managers. Some organizations have
taken the long-term view of developing talent internally
creating a succession pipeline within HR that will feed to and
from high potential leadership programs. It is become more
common for these leadership programs to include work
rotation through HR. The Wall Street Journal reports that
among large companies that hired new CHROs in the past
40
Business focus: HR Business Partners
Organizational effectiveness
3
Mobility
Resourcing
Talent
Reward
Learning & Development
Strategic capabilities
1. New markets
Rapid expansion
2. Workforce efficiency
Workforce analytics
3. M&A
Onboarding
4. Managing change
Communications
Talent acquisition
Culture
Integration
Collaboration
Global mobility
Scheduling
Organizational design
Transitions
Development
Change management
Frontline engagement
Source: Deloitte
five years, about one-third selected a non-HR executive1.

Thats up from about 10 percent in earlier periods. This
shift may reflect a perception that some traditional HR
professionals do not have a deep understanding of business.
Critical points to consider along the way

Get the basics in place first. The HR Business Partner and
Centers of Expertise roles cannot be fully functional, or
credible, without the provision of reliable HR transactional
delivery and underlying foundations, such as standardized
reporting, technology, and policies.
Prepare the line manager. Facilitate the mind-set change
of the linemanager, who may not be initially willing or ready
to team with colleagues in these newly defined HR roles.
Be clear about the roles. Clearly describe the types of
business outcomes HR Business Partners and Centers
of Expertise should focus on delivering. Prepare the line
manager. Facilitate the mind-set change of the line
manager, who may not be initially willing or ready to
team with colleagues in these newly defined HR roles.
Match the person to the role. Focus on the skills and
experience it takes to be credible and trusted as either a
HR Business Partner of Center of Expertise colleague.
The power of information. Provide timely, meaningful
management metrics and reports to guide people-related
decisions. Then track results.
Focus on the business requirement. Keep the desired
business outcome visible as you go. It takes time: Focus on
quick wins first but do not undertake too much too soon.
A leading business intelligence company's CHRO

relates what he learned from integrating and
transforming his organizations HR functions
following a merger:
Prior to the integration each company had
implemented, to a varying degree, the so-called
Ulrich model."2 Both companies had HR Business
Partner roles, Centers of Expertise, and some form
of centralized administrative and transactional
function in their home countries (United Kingdom
and United States).
The challenges the two companies faced in relation to
HR structure were quite similar and when planning
for the integration of the two functions, business and
HR leaders from the two organizations specifically
highlighted:
The goal of the strategic HR Business Partner
still had to be realized. HR Business Partners were
not (apart from at a very senior level) seen as true
strategic advisers. This was mainly due to the lack
of supporting administration and transactional
functions outside of the UK and the US, and a lack
of integrated supporting technology and
infrastructure at a global level.
The Centers of Expertise should be focused on
addressing the issues critical to the future combined
organization, a quite different focus to their
current state. A shift in priorities for the combined
organization had created a burning platform for the
specialist functions to change focus and provide
specialist knowledge and flexible resources around,
for example, global talent management and
organization development.
Developing the necessary, new skill internally can be a big challenge. One recent global banking client invested heavily
in a six-day development program for Centers of Expertise and HR Business Partners aimed at significantly changing its
behaviors and skills. The organization first assessed/analyzed the business requirements and prioritized training needs
before confirming the module curriculum and learning outcomes.
A nonlinear method of learning was used, whereby participants worked on companion competencies and behaviors
that will enhance their overall performance.
The training program focused on the behaviors that most effectively support the following competencies:
Understanding what delivering value means to todays business leaders
Managing talent demands and challenging the business to innovate around talent
Working with analytics for better related decisions
Developing trusted advisor skills
Enhancing interview and presentation skills
The delivery strategy and rollout plan was confirmed and training was delivered to about 400 HR directors and
managers, in locations that include London, New York, Frankfurt, Singapore, Sydney. Training effectiveness was
reviewed on an ongoing basis.
42
Conclusion
Moving toward a new vision for HR Business Partners
and Centers of Expertise
Creating valuable HR Business Partners and Centers of
Expertise starts with a few specific insights. Make sure
your HR team has the right attributes because business
collaborating and solution innovation require a special
type of person. Identify three big areas where a strong
collaborative relationship would add most value to the
business results, then work from there. Make the most
of your HR Centers of Expertise and business partners by
finding ways they can deliver direct, quick-win benefits
to the business and determine how much HR time youre
really spending to drive business performance. Thinking it all
through from the outset can help unlock the full potential of
your HR Business Partners and Centers of Expertise.
Endnotes
HR Departments Get New Star Power At Some Firms. Wall Street Journal. 23 June 2008
2
Ulrich, D; and Brockbank, W. The HR Value Proposition. Harvard Business School Publishing, 2005

4
HR Organization
The HR Chief
Operating Officer
Governance and
decision rights
Governance
and decision rights
Experience demonstrates that a leading cause of

organizations failing to realize their transformation
objectives is that they have not backed up structural changes
with the proper governance structures and decision making
methods. Conversely, organizations that have adopted
effective governance structures have been able to effect
positive change much more rapidly than those that didnt.
Organizational accountability is vital in todays challenging
business climate, and an organizations ability to monitor
and enforce change in alignment with business objectives
is necessary. The experience some of the worlds most
recognizable organizations have amassed in their own
transformation projects shows the importance of effective
governance and its implications on decision making and
sustainable change.
Over the last 15 to 20 years, many organizations have made

significant investments in HR operations with the goal of
improving efficiency and reducing costs. Even though they
have made costly investments to implement new service
delivery models, which often include shared services, centers
of expertise, and technology, for some the returns have
been marginal at best. Moreover, most of the HR functions
that businesses have attempted to transform have yet
to demonstrate tangible value. Failure to adopt effective
governance can have negative implications including:
Loss of credibility with business leaders
Lower workforce productivity levels
Lower customer satisfaction
Higher vendor costs
Reverting back to old ways of operating
Effective governance and decision making establishes
a framework for transformation and can improve the
odds of solidifying change and realizing the benefits of
transformation.
Governance and decision rights
Start at the beginning

Persistent, effective governance for HR is no longer
optional. Compliance drivers now require organizations
and their executives to demonstrate meaningful protocols
and processes to guide organizational decision making. In
addition, todays organizations should take a hard look at
how to embed meaningful governance principles into their
daily operations, processes, and culture.
Organizations that do not clearly articulate the need for
governance early, and instead allow decision making to
evolve autonomously as part of their day-to-day operations,
could find themselves using governance poorly at best and
sporadically at worst. Governance should be consistent
and flexible enough to adjust to an organizations business,
but the overall framework and its principles should endure
time. Effective governance begins with a well-documented
charter that outlines the purpose, accountabilities, timing of
interactions, and participants.
In approaching the implementation of an effective
governance framework, three basic questions should be in
clear focus:
What is governance?
The term governance is used in many different ways in
business today, but it can be defined as a method of
organizing resources for the purpose of providing guidance
which is designed to lead to a desired set of behaviors for
making decisions that have a positive impact on business
performance.
Governance provides:
Defined accountabilities and ownership
Guidelines for decision making
Ways of balancing conflicts
Ways of balancing within a matrix organizational
reporting structure
Necessary communication flows
Bodies to support the above
Governance can drive a consistent set of HR
behaviors to:
Develop HRs master strategy to promote alignment
with the global business strategy and support functional
strategies
Oversee delivery of the global HR strategy using a globally
consistent approach as appropriate
Help position HR to support delivery of the global
business strategy
Deliver the human capital targets that will drive
achievement of critical business targets
Resolve issues relating to the people agenda
46
Governance is about making the required decisions

for the business.
Why do organizations need governance?
Without effective governance, there is no accountability
for managing operational performance, communicating
progress against performance, resolving conflict, managing
organizational change, sharing information across the
organization, prioritizing investments, or focusing on
the quality of customer service. An effective governance
framework allows an organization to be business and
customer focused, and paves the way for the seamless
delivery of people services and business solutions.
Who needs to be governed?
This is a primary consideration. There are three main
components of a well-structured governance framework:
(1) an oversight council, (2) operations, and (3) customers.
These groups should have well-documented tools and
methods to aid in executing their governance roles. Whether
the subject is operating agreements, decision making
methods, monitoring performance metrics, or monitoring
customer reaction, each role is important.
Each governing body consists of members of the HR

leadership team for example, centers of excellence
leaders, business affiliates, and functional HR leaders.
Governance
council
Strategy and
priorities
Oversight and
guidance
Operations
Manages
implementation and
ongoing operations
Promotes
consistency of
process execution
Customers
Functional interface
to customers
Promotes
integration
of customer
perspectives
Source: Deloitte
Establish our vision and strategic direction

in alignment with the business vision
Determine
short- and long- term priorities and plans
Work collaboratively and transparently

in our global operating model
Partner with
global vendors
Adhere to new standard

global processes and policies
Effective
governance
framework
Accommodate
business requirements
Manage people in the new

global organization design
Comply with
Global delegation of authority
Perform new responsibilities outlined

in global standards and agreements
Measure and monitor global performance

metrics and targets (scorecards and dashboards)
Source: Deloitte
Effective governance
Effective governance helps to achieve characteristics identified
with next-generation HR organizations. These organizations
are focused on customer service, market awareness,
operational efficiency, including cost controls, process
effectiveness, productivity, leading business practices, and
employee approval. A broad, dynamic governance framework
allows the business and customer to be focused while delivery
of services and integrated business solutions remains seamless.
Learning from others
How do you know if you are getting it right? Effective
governance depends on your ability to address the needs
of the business in a nimble manner. The ability to measure
progress against operational objectives, business performance,
and customer approval is a huge leap forward in todays
economic climate. Effective governance and decision
48
making help to promote sustainable change and improve

performance. Without the ability to contribute demonstrable
impact to the business, HR will continue to be regarded as a
back-office compliance function rather than a true business
driver. This is the reality that most organizations face, and a
stigma that is very difficult to overcome.
Leading global organizations that have undergone
some degree of global transformation are protecting
their investments by implementing effective governance
frameworks. Furthermore, some are investing in sophisticated
tools, such as project management software and efficiency
programs like Six Sigma, that can reduce the effort required
to manage the governance process and aid effective decision
making. Again, effective governance is about assigning
accountability where it belongs, monitoring performance, and
making decisions that support business objectives.
Experience guides that the governance processes and oversight roles must foster an environment for the transformation
project and long-term sustainability that drives cooperation, shared accountability escalation when needed, clear global
expectations, and empowerment. The model below provides a set of principles that can support effective governance.
Partners cooperate with each other

Only if there is cooperation between
and within Shared Services, Centers of
Expertise, and HR Business Partners can
the organization be succesful. No one
organization is more important than another.
Managers and staff are

empowered
Managers and staff are empowerd to
make appropriate decisions and resolve
issues in line with individuals' roles and
areas of responsibility. Governance
bodies are empowered to make
decisions and trigger action.
Global expectations are adhered to

Adherence to global expectations is tracked,
monitored, and managed globally and by each group.
Groups are responsibile for tracking, monitoring, and
manging business-specific requirements.
HR Transformation
Shared accountability is
understood by all
There is an understanding of shared
accountability for all HR processes and
services. However, responsibility for
each and every process and service shall
rest with a clearly defined owner.
Issues are only escalated when needed

Escalation to governance decision making bodies occurs
only after attempts to resolve at the business level have
been attempted, but failed. Significant decisions should
be escalated upwards, in which case the proper chain of
command and escalation process need to be followed.
Source: Deloitte
In summary
In order to achieve sustainable transformation, an organization should have a well-defined governance structure. Such a
structure inherently allows for more effective decision making and establishes a credible platform for HR to consult with
the business on its most critical asset people.
Numbers
behind HR
50
Numbers
behind HR
Benchmarking
7
Workforce
analytics
Benchmarking
Traditional HR benchmarking focuses on two things: cost

and headcount. This approach focuses attention on HRs
efficiency, not its effectiveness, and seldom reflects HRs
effort to become a transformational, strategic part of the
business. When HR focuses on the cost and the elapsed time
it takes to deliver services, its focus is strictly operational
and when cost and effort dominate HRs contribution to
designing new programs or deploying improvements,
the opportunity to boost business performance gets
less attention.
When companies make initial forays into benchmarking HR
effectiveness, they survey customer perception. This provides
input into growth and development, as well as the way
investments are prioritized. Some use balanced scorecards
to focus on metrics like speed to productivity, while others
commit to fill positions within a set time through servicelevel agreements. These are all good starts, but none of
them takes the next necessary step: demonstrating the
business value of the HR functions being measured.
HR leaders should broaden their benchmarking horizons
to help chief officers (CXOs) see the beneficial impact of
their activities on the business as a whole, not just the
table-stakes categories of cost and headcount often derived
sought in benchmarks.
52
Aligning HR with business results
Business based measurement systems
How effective is HR?

Focus: how does HR contribute
to business performance?
How efficient is HR?

Focus: how much does HR cost?
What role does HR Play?

Focus: what is HR doing?
HR efficiency benchmarking
Employee satisfaction surveys
HR cost monitoring
HR efficiency metrics
Business impact assessments

Business advisory services
assessments
Balanced scorecard
Globalization benchmarking
Innovation benchmarking
Employee engagement
HR audits
HR case studies
Attitude surveys
Management by objectives
1960s
1970s 1980s 1990s
Source: Deloitte
2000s
2010s
Benchmarking
This change in perspective not only coincides with

fundamental changes in the way companies conduct
business and perform in the marketplace, but also measures
the degree to which HR functions as a strategic business
driver. Both of these shifts are beneficial in a time when
revenue and market growth, globalization, and increasing
demands for innovation through a contracting labor market
combine to increase the relevance of business drivers like
profitable growth, globalization, innovation, and talent
development. Fundamentally, contributing on a strategic
level means driving business performance through HR
programs. Tied to benchmarks, key performance indicators
and other measurement systems demonstrate the business
impact of HR and represent a departure from traditional
efficiency-based view. Thus, expanding HRs benchmark
activities beyond cost and headcount aligns HRs efforts in
solving business-related problems through deployment of
programs while measuring the effect of those programs.
Make no mistake. Measuring cost and headcount is

important. Cost effectiveness, speed, and compliance are
required components of HRs core mandate. However, over
the past 20 years, business leaders have come to expect
this as a matter of fact. The days of recognizing HR only for
first-quartile cost structures, correct and on-time payment,
and being compliant with the myriad of people-related
laws and regulations are over. Nor should anyone say HR
cant benefit from traditional benchmarking if nothing
more, it addresses the 30-second question, Do our HR
organizations costs and delivery times compare favorably
to other organizations? Benchmarking can provide that
quick answer, but delving into what matters how HR can
respond to todays market challenges requires a new type
of measurement system along with a new way of thinking
about benchmarks.
Benchmarking
Making the transition

With a few simple steps, the HR organization can migrate
from a traditional to a business- and industry-focused
benchmarking approach. The key is not to measure for the
sake of measuring. If HR has learned anything from the
internal benchmarking of employee engagement surveys,
it is this: Ask only the questions that the organization will
devote time and effort to addressing. The same holds true
for HR benchmarking: Focus on areas that make sense to
the business and align with the way HRs strategy supports
the overall business strategy. At the same time, be sure to
perform enough traditional benchmarking to be confident
that HR compares favorably in cost and headcount.
Example: What could be the input process output HR impact and business impact
Input
Talent
acquisition plan
Talent
development
plan
Workforce plan
Growth strategy
Corporate
strategy
Process
Offer
acceptance
rate
Time to fill a
position
High potential
development
Workforce
development
Market share
Output
New hire
competence
and
performance
ratings
Employee
development
results
Workforce
competency
Market share
penetration
enhancement
To migrate from traditional benchmarking to a businessfocused approach, companies should do three things.
First, work backwards. Align the overall business strategy
such as profitable growth, globalization, innovation,
or talent development with specific HR projects and
programs. In aligning the work of HR with the overall
business strategy, the key performance metrics that matter
to the business may not be the ones that matter to HR
or that HR thinks matter to the business. Something as
simple as the amount of time it takes to fill a position often
matters to HR, so HR thinks that matters to the business.
Often, however, the business just doesnt care that HR
found a line worker within 10 days. What gets the business
excited is knowing when a new hire in a critical workforce
54
Source: Deloitte
segment will become productive, and what investments it

will take to make it happen. Each metric should measure
the effectiveness and efficiency of a particular HR program,
which, in turn, aligns with the organizational strategy to
drive business performance measures, such as growth,
globalization, innovation, or talent management.
This is how HR can measure what matters to the business.
HR impact
Employee
retention
Employee
engagement
Voluntary
turnover
Upward
employee
mobility
Business impact
Customer
satisfaction
Customer
turnover
Customer
penetration
Patents per
capita
Benchmarking
After working backwards to align the organizational strategy

with HRs activities and identify what the business may
ultimately need, look for benchmarks that support the key
performance metrics. Be forewarned: Finding applicable
benchmarks that support the key performance metrics
will not be easy. The benchmarking industry is, almost by
definition, traditional. Comparisons to cost and duration
permeate the offerings of HR-related benchmarking
organizations. Conduct custom benchmarks studies
with peer companies or apply an internal benchmarking
approach that collects data over time. The underlying
belief is that you get what you benchmark, measure, and
reward. Select a peer group that has your organizations
level of maturity for which it makes sense to benchmark.
The business will challenge the applicability of the peer
group. A deep understanding of the peer group will increase
the acceptance of the benchmarking results. Do not be
overly concerned if those external benchmarks do not exist
because benchmark providers offerings often lag behind the
innovation that exists within HR itself.
Finally, as table stakes, conduct efficiency benchmarks to
answer the 30-second fly-by question. Establish a realistic
goal when compared to other HR organizations. Being a
first-quartile organization in cost, while supporting an overall
business objective of profitable growth, might hinder an
HR organizations ability to invest capital on other strategic
business objectives such as innovation or globalization.
While being realistic, any CHRO will have a hard time
defending that a cost structure in the third quartile is good.
Be competitive in cost and duration. Use benchmarks to
help prioritize HR investments that support the overall
business strategy.
Seeing the desired end state

Once the organization selects appropriate benchmarks
and begins to measure performance, the impact of HR
activities on business performance is obvious. To an extent,
leaders can attribute changes in business performance to
these measurements. Performance benchmarking relative
to peer organizations not only provides valuable insight
into the effectiveness of HR investments, but can also help
HR prioritize new investments. The fundamental nature of
discussions between HR and the business also changes.
For example, people may start talking about how the
organization is growing profitably relative to its peers, thanks
to productivity and innovation enhancements they can trace
back to HR investments in reward and selection programs.
HR has joined the strategic leaders of the business.
By following the guiding principles, an organization can
efficiently transition from traditional to business driven
benchmarks. Benchmarks should be simple, comparable,
cost-effective to collect, and fully documented. For example,
the number of people who enjoyed taking a particular
training course is not particularly interesting to the business.
What the business likely cares about is the specific type
of behavior change. Benchmarks should be standardized.
Paradoxically, the distinction that makes a particular metric
applicable to the business might also make it more difficult
to benchmark until the industry catches up with this type
of innovative behavior. Benchmarks should be repeatable.
Simply knowing a point in time (and a lagging point at that)
provides a data point. The effect of HR programs on the
business can only be tracked over time. Thus, in designing
business-focused benchmarks, follow these guiding
principles: business driven, standardized, and repeatable.
Benchmarking
Example: Linking business strategy to HR benchmarks

Business strategies
Grow the business
Improve profitability
Greater market agility

and responsiveness
HR strategies to meet
requirements
Develop a leading, highperforming workforce
Develop a sustainable
workforce
Become an employer
of choice and improve
employer reputation
Strategic objectives
Benchmarks
Increase worker productivity
Market share
Increase worker performance
Market penetration
Drive leading practices in

hiring
Brand loyality
Develop the leaders of the

future
Patents per capita
Invest in employee training
Return on Research and

Development (R&D)
Control payroll expenses
Revenue per Full Time

Employee (FTE)
Engage employees
Social media persona
Develop employees
Trend predicition
Pay employees appropriately
Time to market
Source: Deloitte
A worthwhile transformation, but not

without challenges
As organizations integrate traditional benchmarking with
business-focused benchmarking, they face three challenges:
comparability, alignment, and credibility. The current state of
HR benchmarking reflects simplicity and a 20-year history of
HRs focus on efficiency: cost to deliver services, prevalence
of various operating models, and headcount. It might not
be possible to find standardized benchmarks that align with
the organizations strategy until the benchmarking industry
begins to see beyond cost, quantity, and structure questions.
Of course, custom benchmark analyses and internal
benchmarks might suffice until such time as the benchmark
industry catches up.
56
As HR aligns its efforts to improve business performance

(alongside cost reduction and process efficiencies), HR may
struggle to identify meaningful programs and measurements
of business performance that it can link to an HR program.
It is easy to identify cost savings: HR reorganized and has 10
fewer people. It is not as easy to measure behavior change,
but it is not impossible either. Credibility comes from giving
a solid answer to the age-old executive question, If you
cant pay my fill-in-the-blank correctly, on time, how can you
contribute to business performance? This is the place for
strength, commitment, and consistent communication from
HR to the business: It is time to move on. HR has a new
agenda and of course, we still need to pay people timely
and correctly.
Benchmarking
To improve the transition between traditional and a

business-driven benchmarking, businesses should
begin with certain attitudes:
Matters and to whom. As CHROs examine the
effectiveness of their programs on growth, globalization,
talent management, innovation, and other measures of
business performance, the relevance of the measurement
systems and the comparability of those measurement
systems are entirely based on where someone sits within
the organization. The COO, Chief Marketing Officer (CMO),
and CIO have different views of how HR contributes to
business performance. HRs measurement systems should
reflect value in the eye of the beholder, which means HR
may need different benchmarks for different measurement
systems that cater to a different audience.
Lets face it in managing human capital, one size
does not fit all. Whether employees play roles in a
succession plan or are marked as high-potential people of
diversity, business leaders, or innovators, some people are
more critical to a business than others. Focus and measure
critical metrics and benchmark those metrics first.
Conclusion
The demands on HR today are greater than they have ever
been. HRs move to align itself with business strategy and,
more importantly, measure the effectiveness of its programs
prompts consideration of a new type of benchmark. Simply
answering the cost or headcount question leaves HR stuck
in the mode of focusing on efficiency, not on effectiveness.
It is time for HR to look at the world through a business
lens and become a strategic driver. The emerging business
focus of globalization, talent management, and innovation
prompts new ways of thinking and, more importantly,
behaving. HRs efforts and programs must focus on
improving business performance aligned with the overall
organizational strategy. The effectiveness of those programs,
as measured through key performance indicators KPIs ought
to be tracked and benchmarked using measurement systems
explainable to the business and capable of demonstrating
the value of the HR organization as a whole.
Numbers
behind HR
Benchmarking
7
Workforce
analytics
Workforce
Analytics
For several years, organizations have focused on the

tactical information HR needs, and theyve used technology
to drive it. However, many have been unable to distill
their substantial volume of data into useful, careful, and
actionable information.
Talent acquisition and movement. Correctly measure

the effectiveness of recruiting efforts. An organization
must understand the needs, patterns, and obstacles that
affect workforce migration. It is critical to assess the future
demand for skills and the future supply.
The need for expanded workforce reporting and analytical

capabilities has likely never been as urgent. Workforce issues
like acquiring, rewarding, and retaining talent are prominent
on corporate agendas. This, combined with tactical issues
like disparate HR systems, need for consolidated reporting,
need for global and historical data management, self-service
reporting, and the need for basic reporting completes the
spectrum of challenges faced by organizations today. As a
result, organizations are compelled to improve their ability to
plan for workforce reporting and analytics solutions.
Workforce performance. Manage the effective use of top

performers to gauge and manage how performance ties to
retention, and to use an effective management structure.
Demographics and diversity. Identify gaps in diversity
before they become issues, and rate the effectiveness of the
programs designed to address them.
Learning and development. Map progression to
development to be better positioned to evaluate
effective development programs.
Some examples of workforce challenges and issues include:

Workforce planning. Account for current and forecasted
business needs, as well as workforce-related actions.
Retention. Invest in staff with critical skills who hold key

positions. By measuring and managing turnover issues
among this population, an organization can mitigate the
potential loss of development investments. Retention is
not only about understanding why employees are leaving,
but also about determining who intends to leave, as
well as knowing when and how to try and change an
individuals mind.
Workforce Analytics
The business imperative

Many HR organizations have been slow to facilitate strong
reporting and analytics capabilities for people management
purposes. The historical focus of reporting and analytical
techniques has been in finance, marketing, and operations.
Today, this is changing and HR has earned a seat at the
table. There are several reasons for this change:
A focus on the workforce is a priority
HR is striving to be a strategic function
The maturity of ERP and other systems is leading
organizations to do more with their data
Workforce analytics and reporting the journey
from transactional data to advanced analytics
Deployment of enterprise technology in HR is well
established. As a result, organizations are sitting on a
tremendous amount of HR data. In some instances, this
data is scattered and incoherent. In others, the sheer
volume of the data hinders organizations from analyzing
it in a useful manner.
Traditionally, organizations have focused on data integrity
and on reporting that is specific to core applications, but the
need for more meaningful and insightful information has
shifted the focus to foundational and advanced or predictive
analytics. The illustration below shows the information
maturity curve:
60
The information maturity curve illustrates a shift from a

reactive HR organization to a proactive business model
from reporting on what happened to anticipating what
could happen. This journey starts with a sequence of steps:
Data quality and integrity, which is the key stepping stone
and foundation for reporting and analytics
Basic application-specific transactional reporting (e.g., basic
employee lists, compliance reporting)
Basic analytics oriented to a single process (e.g., recruitment
analytics)
Cross-functional analytics that draw from multiple
applications (HR and nonHR)
Advanced predictive analytics (e.g., predicting the risk of
people leaving, predicting the top candidates).
This predictive analytics concept used to be of value to only
a handful of companies in the past, but the shift from a
reactive to a proactive focus has seen a sharp move toward its
broader adoption. More and more companies are interested
in retaining talent, and the way to do that is to predict the risk
of employees leaving based on industry-specific criteria (e.g.,
long working weeks, slow time to promotion, compensation).
However, the true value is in the actions you take to mitigate
the risk.
Organizations can reside anywhere along this maturity curve.
Workforce Analytics
Information maturity curve
Predicitive
analytics
What might be happening?
Cross process
and Functional
analytics
HR information maturity
Why is it happening?
Organization, job, and

workforce predictive
analytics
Cause and effect
Basic analytics
Integrated analytics
Multiple sources of data
What is happening?
Consolidated
reporting
Process-specific analytics
Single source of data
Global data standards

Data and Basic
reporting
Transactional
Data integrity and quality

Basic employee lists, extracts, and compliance reports
Increasing business value
Strategic
Source: Deloitte Analytics.
Workforce Analytics
Workforce reporting and analytics is a process keep it simple!

The graphic below provides an overview of the process toward achieving meaningful, business driven workforce analytics:
Critical questions
Actio
ns
s
eport
ta\R
Da
Workforce issues
What are the
workforce
issues/challenges
at hand?
Facts
What workforce data is required and
can be leveraged to understand the
HR function?
Business results
Actions
What should we
do based on the
insights available?
I n si g h t s
Understanding
What is currently happening or has
happened related to our workforce
and why?
Start with the business issue(s) at hand. Whether dealing with workforce planning, retention, or another challenge,
identify the business issue and the related workforce issues. This can provide a key stepping stone in determining the
information you need and measure.
Understand the data and information required to measure. It is critical to define a holistic data management solution
and establish the system of record before even discussing analytics. Document requirements from an HR and functional
perspective, and then use technology to satisfy them. Analytics capabilities can draw insights from both internal and
external data sources. Identify those sources and reinforce the processes that determine whether the data is correct, timely,
and secure.
62
Workforce Analytics
Look for insights from the data and reports and turn
into meaningful actions. The data, reports, and tools you
use may be powerful, but they provide value when analyzed
appropriately (e.g., if time to fill a position has gone up from
20 days to 40 days, what does it mean and what actions
do you need to take?). The value of workforce analytics is
the ability to use the information to think analytically about
business issues, and then to use those insights to respond
to increasingly sophisticated questions from the business
units and leadership and play a strategic role in defining the
right questions to investigate as well. This is another journey:
People will require periodic reassessment and realignment of

business-oriented analytical skill sets as your HR function and
analytics mature.
It is important to identify how analytical decisions are made
in your organization. You must also determine who should
be accountable for driving the analytics and using the
insights. Next, create consistency and consensus around
data definitions. Without a shared understanding of the
data, including its source and context, the business may
question the analytical output.
A sample workforce analytics scenario increasing business results with the talent acquisition process
Critical
workforce issues
How do we fill the skills gap in our workforce?

What skills and competencies are required to fill the critical jobs?
How do we decrease time to hire to increase revenue?
How can we reduce our sourcing costs?
Data/Reports/
Measures
Critical jobs report

Applications by job report
Applications by source report
Time to fill critical jobs report by time period
Open requisitions by critical jobs report
Internal movement report by location, skills, and competency
Insights
Time to fill a critical job has doubled

Number of vacancies has increased in key organizations
Internal skills and competency are not filling the void
Certain sources are not providing skilled candidates
Applicant pool is shrinking
Actions
Reduced sources/suppliers not providing candidates

Increased applicant pool by using social recruiting techniques (like social networking sites)
Changed hiring policies to recruit from other countries
Results
Possible results that may occur:

Decrease in sourcing costs by 40%
Decrease in time to hire by 25%
Increase in cost to issue visa for overseas candidates but lowered salary/compensation levels
Increase in productivity leading to increase in sales

Workforce Analytics
Tips for achievement

It is a long journey. Work in chunks and use data to drive
decisions. The journey from basic reporting to advanced
analytics applies in most cases.
Take actions based on insights. Analytics can become
shelfware if it points toward actions but you do not take
them. Using the current trends discussed above, we can
identify sample actions that organizations might execute.
For example, in workforce planning, analytics can help a
company avoid capacity gaps and shortfalls. Analyzing
workforce performance can direct the creation of effective
management structures. Analyzing data associated with
demographics and diversity can help identify gaps and
potentially reduce the risk and costs associated with
litigation. There are similar action payoffs related to other
trends, including acquisition and movement, learning and
development, and retention.
Point solutions are important, but capability building
can lead to better results. The diagram below highlights
key differences between the two approaches.
64
Point solutions diagram

Functional capability
building
Holistic process-oriented
approach
Technical capability
building
Holistic tool-agnostic
approach
Align and train resources

with necessary skills
Create a sustainable
technology infrastrucutre
Address need for

significant organizational
change
Implement technology
enablers
Point solutions
Solving specific HR related
business challenges
Focus on rapid design and
implementation
Drive bottom-line benefits
quickly
Leverage your investments in technology. You do not have to buy new technology.
Leveraging your investments can be a good starting point.
Consider a vendor-hosted analytics solution. Vendors can now host a reporting and
analytics infrastructure and provide analytics support based on leading practices and industry
knowledge. This reduces the in-house cost to host, license, implement, or support an
analytics platform.
Workforce Analytics
Conclusion
Identifying HR business issues can help define the development of a road map to advance your organization toward a
scalable and sustainable workforce analytics capability and a more proactive HR function. Remember that this is not a
switch a company can flip. As expectations, capabilities and habits grow around the new approach, the journey to effective
reporting and analytics can bear fruit over time.
Enabling HR
service delivery
66
Enabling HR
service delivery
Cloud HR
9
HR shared services
and Outsourcing
10
Global privacy
and Security
11
12
Social
media
Cloud HR
What do a carve out from a global medical device maker,

a fast-growing not-for-profit foundation, a global financial
services company, and an entertainment company with
diverse training needs have in common? Theyve all turned
to cloud-based computing and the Software as a Service
(SaaS) model to fuel critical HR Transformation. These
related approaches use the Internet to virtualize and
centralize content delivery, application management, and
system architecture so organizations spend more time on
core missions and less on IT. While these approaches are
becoming familiar to leaders in many roles, HR is not the
first place most people imagine them in action.
Are cloud computing and SaaS the next big disruptive
technologies or are they simply a natural evolution of
distributed computing? Either way, they are changing how
many parts of the business operate and they are widely
considered a big deal for IT and SaaS.
Thats because two trends are coming together: Business
leaders are asking HR for more strategic input, and
technology is giving HR leaders better tools with which to
respond. By embracing an HR-centric view of the cloud,
instead of waiting for a more general cloud implementation
to trickle down, HR leaders can endeavor to do more to
support operational excellence, create and implement more
effective talent strategies, and support revenue growth.
68
Cloud HR
Benefits
SaaS has already demonstrated its value in terms of
scalability and exibility, using both on-demand and
subscription-based models. Along with other aspects of
cloud computing, SaaS is helping organizations to transform
their traditional information technology (IT) structures into
more nimble, exible, and affordable architectures.
The technological benefits of cloud computing are already
familiar. It allows an organization to deploy service delivery
solutions quickly, without the barriers normally associated
with size or geography. Once in place, those solutions can
scale up or down more easily on the cloud as well. The result
is typically cost savings that HR leaders can apply elsewhere.
And, while SaaS technology is generally considered
evolutionary, its business implications are more likely
considered revolutionary. Thats why the real demand
for SaaS is being driven by the business, where there are
heightened expectations for agility and exibility. SaaS can
create the possibility of rapid business model innovation,
improved service levels, and new ways of controlling
costs powerful stuff for companies responding to the
aftereffects of the economic downturn and the pent-up
business demand for HR.
Using the cloud, organizations can see structural benefits

that lie beyond technology advantages. The centralized
model makes it possible to connect various HR initiatives and
technology across the enterprise, so that design, portals,
and the nature of service delivery itself are consistent and
appropriate. This can help HR look and work more effectively
at the most critical point of change the interaction
between end users and HR services, such as recruitment,
screening, predictive analytics, performance management,
payroll, time, and attendance or workforce management.
But theres even more at stake than the opportunity to do
current things faster, better, and cheaper. SaaS solutions,
like cloud computing, can also help organizations do entirely
new things, like helping HR organizations of any size in their
efforts to compete and operate on a global scale.
Cloud HR
Why now?
Recent Deloitte research shows that 84 percent of surveyed
companies are either transforming or planning to transform
how they handle HR functions. According to a 2009 Deloitte
survey, the chief motivators are cost savings (85 percent)
and greater effectiveness (75 percent).1 And while business
and HR leaders appreciate the long-term value of HR
Transformation, the journey toward obtaining such value
can seem too long. SaaS is an efcient way to accelerate
HR Transformation and capture value faster.
Simultaneous maturation of SaaS and HR. While

companies have made great efforts to streamline processes
and technology, many times those efforts havent extended
to the delivery of HR services. But now HR, business
needs, and technology are converging to create a defining
moment in the history of HR Transformation. Business
leaders need improved HR delivery models to drive more
effective decisions and growth. At the same time, SaaS
HR technology is providing new and affordable tools. The
timing couldnt be better.
New choices. Companies have new options for deployment

models (public, private, and hybrid clouds), as well as
for service models (SaaS, platform as a service, and
infrastructure as a service). These options offer varying
benets in terms of efciency, availability, scalability, and
speed of deployment.
Introduction of broad, stable cloud computing

providers. The cloud computing marketplace has taken off
in the last few years expanding the options for both IT
and HR to support HR service delivery.
Demand for ROI. Massive investments in HR infrastructure

have produced mixed results. Companies have an
increasingly limited tolerance for spending money on
technology without tangible, documented improvement
in effectiveness.
Explosive growth in SaaS and cloud computing options.
While software and hardware sales in general have slumped
amid poor economic conditions, Gartner Research has found
SaaS products and cloud-computing solutions are growing
at two to three times the pace of on-premises solutions.2
This gives organizations looking for fresh approaches to
HR Transformation several new paths to consider.
70
Lower costs and scalability. Many SaaS and cloud

computing options cost less and are faster to implement
than large enterprise systems. There are now SaaS
products and services that can compete with or integrate
with comprehensive on-site solutions. Many offer elastic
scalability so HR organizations can add or remove capacity
on demand. This is especially advantageous for organizations
with variable workloads or growth spikes triggered by
acquisitions.
Cloud HR
Designing a cloud computing strategy

SaaS can offer a middle ground between in-house IT
operations dedicated to HR and full-scale outsourcing.
It also allows software to be hosted off site while
managing HR processes in house. Issues companies are
considering when choosing SaaS technology to drive
HR Transformation include:
Value. Will the new system increase or decrease
dependence on IT resources? Can users congure the system
themselves or will a vendor have to customize it for them?
Will it truly improve service levels?
Deployment. Will the solution be immediately usable or is
there an extended implementation period? Can HR Business
Partners, managers, and employees take the ball and run
with it soon after launch? Do future improvements to the
system involve massive, time-consuming upgrades or can the
system be updated automatically?
ROI. What are the likely implementation costs for a new

system? To what extent can up-front costs be recovered
via reduced costs for an ongoing operation? How does the
purchase affect cash ow? Can subscribing versus buying
reduce the amount of capital tied up by the purchase?
Service to end users. Is the system intuitive and easy
to use? How quickly can employees competently use it?
How much training is required to achieve prociency?
How difficult is it to update features and functionalities to
incorporate end-user feedback?
Thinking about these factors can help you choose the right
cloud computing strategy. Developing a sound strategy for
cloud computing is especially important if your organization
is facing a major business change or ERP deployment or is
already starting to dabble in cloud computing.
Where could SaaS make the most sense for your HR organization?
If youre involved in any of these three activities, a SaaS solution could be an effective strategy to
consider:
ERP upgrade with legacy HR

platforms
SaaS could be a winning approach and possible replacement

solution for your HR platform.
Other cloud or SaaS already

in progress
Your IT organization understands and buys into the SaaS

model, which makes adopting for HR a natural step.
Business change or
expansion
Organizations that are expanding through M&A or

expanding globally can see significant benefits from
SaaS solutions.
Source: Deloitte
Obstacles and ways to overcome them

Speed can be critical to realize value through HR
Transformation. Thats why SaaS can be such a compelling
option for companies that want to show their organizations
the value of transformation now not a year or two in
the future. Still, any new technology carries a measure of
apprehension. The major factors giving companies pause
before they consider the cloud to support their HR processes
and technology include:
Security. SaaS security may be as effective as security
associated with in-house data centers, but many companies
do not have the comfort level to go down this path. And
even some early adopters are keeping particularly sensitive
applications in house.
Quality of service. The lack of an extensive demonstrated
track record to meet formal service-level agreements for
performance and availability means quality of service may be
a concern for some organizations.
Integration. Organizations have lived through the
challenges of integrating traditional on-premise and hosted
Human Capital Management applications with best-of-breed
applications. They question the complexities associated with
integrating SaaS applications with in-house applications.
72
In each of these cases, however, the same speed of

innovation thats making HR leaders apprehensive is also
the answer to their concerns. The advancing technology is
making each of these objections less relevant. Recall that
not long ago people were apprehensive about using their
credit cards to buy books online (security), predicted digital
imagery would never replace film (quality of service), and
owned multiple business systems were never intended to
talk to one another (integration). Soon, if not already,
misgivings about the cloud will likely seem just as quaint.
In addition to the inherent security built into the SaaS
applications, there are a number of deployment options in
the cloud that offer varying levels of security, such as public,
hybrid, and private clouds. This variety provides HR and IT
leaders many choices to align with their internal security
programs.
One way organizations are addressing SLAs is to launch pilot
programs that include varying populations to stress test all
aspects of the agreements.
Compared with prior models, the SaaS HCM vendors are
providing the integration tools rather than relying on the
organizations to develop the tools themselves, alleviating the
many challenges with integration.
Cloud computing and SaaS have become an effective

approach to HR Transformation
So what happened to those diverse companies we
visited earlier? The medical device manufacturer sped
up implementation, reduced the demand on its internal
business and IT resources, and was able to establish fully
independent HR operations within nine months. The
not-for-profit dramatically accelerated time to value without
overstretching internal IT resources and exceeded budget
expectations. And the entertainment company got its new
learning system up and running quickly without having to
maintain any of the content itself.
The real power of HR-focused SaaS is in the potential to

rethink and redesign HR delivery and IT architecture at a
fundamental level. SaaS-driven HR Transformation can help
HR to accelerate the value to talent strategies (workforce
planning, performance, succession management,
etc.), revenue growth (M&A, business transformation,
globalization), and operational excellence (workforce
intelligence, HR policy, culture, and communications)
making SaaS a technology consideration for any
organization looking to take HR to the next level.
Enterprises should recognize emerging cloud capabilities

and take advantage of new service offerings, such as more
nimble, exible, and affordable architectures. That means
evaluating SaaS alternatives to discover offerings that are
aligned with operating environments and risk proles.
Navigating the options, assessing the opportunities and risks,
and migrating to the appropriate SaaS environment can help
organizations position themselves for future adoption of
additional HR capabilities.
Endnotes
1
Deloitte Consulting LLP, Human Resources Transformation Survey: A case for business-driven HR, p. 1 (2009).
James Holincheck and Thomas Otter, Key Issues for Human Capital Management Software, Gartner Research (March 24, 2010).
Enabling HR
service delivery
Cloud HR
9
HR shared services
and Outsourcing
10
Global privacy
and Security
11
12
Social
media
10
HR Shared Services
and Outsourcing
Has your organization implemented service centers,

deployed a shared services model including centers of
expertise, or maybe outsourced HR and related technology
capabilities in support of HR delivery? Think youve reached
the future state? Think again.
For more than 15 years, companies of all sizes and levels of
complexity, in virtually all industries and around the globe,
have worked to improve the effectiveness and efficiency
of their HR operations. More recently, theyve combined
outsourcing both broadly and selectively with everimproving technology for customers and operators of HR
services. These changes have offered the goal of reaching
future state more quickly.
Once, the vision of the future state cast the HR function as
a way to deliver basic services to support the administrative
requirements of employing people. As more companies
globalized and grew, the complexity of those requirements
increased. The cost and challenge of supporting those
HR needs increased as well. In this environment, shared
services and outsourcing became specific tools for delivering
complexity in an effective way.
Many large and midsized companies turned to outsourcing
as a way to realize the future state of HR service delivery.
They transferred a large portion of the HR departments
processes, technology, and people to outsourcing providers
62%
29%
Cost reduction
Level of controls
59%
26%
65%
22%
Process efficiency
Platform to support
20%
growth/scalability
63%
Data visibility 20%
63%
Ability to sustain/control
19%
compliance requirements
57%
Process quality 18%
63%
Improved service levels 15%
63%
Removal of distractions from

15%
core business
51%
62%
Cross-organization comparability 12%

31%
Acquisition/M&A synergies 11%
57%
Service levels 11%
43%
Working capital 9%
Developing new talent 8%
3%
25%
Tax benefits
0%
Significant positive impact
55%
20%
40%
60%
80% 100%
Positive impact
Source: Deloitte's 2011 Global Shared Services survey
with the expectation that those firms would effectively

transform the delivery of HR by providing an outsourced
shared services model. Today we know that the fully
outsourced approach to realizing business objectives proved
more challenging than many anticipated.
HR Shared Services and Outsourcing
As Deloittes 2011 Global Shared Services Survey reaffirms,

overall shared services deployments have moved the needle
in the areas their designs called for. Cost reduction, controls,
and process efficiency are the top three outcomes globally
and these results have remained consistent over the last
few years. Many companies continue to work toward
similar goals aligned with the future state theyve envisioned
for years.
By now, a more effective, efficient HR operation is simply
not good enough. The many stories about challenges and
achievements, whether in applying insourced, outsourced,
or blended approaches, reveal a landscape that demands
new thinking.
In the new vision of a future state, effectiveness and
efficiency are table stakes. To realize this vision, complex
businesses must also drive profitable global growth into
emerging markets, flow talent seamlessly around the
enterprise, and permit increasingly rapid merger, acquisition,
and divestiture transactions on a grand scale. Together,
these needs define a new future state for HR shared services
and outsourcing.
To get there, HR shared services will have to bring significant
improvement to:
Driving a companys talent agenda
Accelerating mergers, acquisitions, and divestitures while
improving the quality of integration
Improving leaders ability to focus on the core business
through high-quality services
The new future state for HR shared services and

outsourcing
Profitable global growth, entry to emerging markets, flowing
talent across a complex enterprise, and increasing the speed
to productive outcomes of significant corporate transactions
are among the top business demands of today. They will
likely remain so well into the future. These demands can
bring a variety of new people management challenges, and
HR should prepare and organize the delivery of services to
address them actively, efficiently, and with increased value.
The future HR Shared Services capability must take
accountability for managing broad/overall HR inquiry,
transaction, and administrative services; driving the
identification, attraction, development, and movement
of talent across the enterprise; and delivering peoplerelated services to support the rapid execution of corporate
transactions around the globe.
These new accountabilities will add to, not replace, the
offerings many HR shared services organizations provide
today. Yet the delivery of these increased capabilities must
occur within the same or improved total cost of ownership,
and the administrative table stakes at the heart of HR will
remain important.
Whether or not an organization has implemented a shared
services model, it may seem a steep challenge to expand
the role of HR shared services beyond the current state.
However, this challenge is entirely achievable through three
specific strategies:
Deploying new shared services operating approaches
Implementing improved technology and tools
Outsourcing strategically
76
Deploying new shared service operating approaches

For HR shared services to elevate its delivery beyond cost
and operational effectiveness, many organizations should
embrace new operating approaches with expanded scope.
Often, HR shared services focuses primarily on back office
functionality in the form of data entry, report generation,
and recordkeeping. Yet for shared services to deliver as a
component of overall HR delivery, it must address more
priorities than those.
For example, the talent agenda requires providing
leaders with faster access to meaningful information and
identifying people management trends. Accelerating merger
integrations or spin-offs requires repeatable methods, tools,
and processes. And improving leaders ability to focus on
core business activities may mean further increasing the
business focus of the strategic HR professionals who team
with those leaders.
Beyond back-office basics. HR shared services gives many
companies a core platform to deliver services well beyond
transaction and data management. Many organizations
already provide a broader set of services. The future of
HR shared services includes answering inquiries well
beyond basic employee questions. Further, it includes
providing administrative process services that require
HR domain knowledge.
The traditional view of HR call centers often includes the
belief that complex inquiries, such as employee relations
matters or manager coaching, should be reserved for HR
Business Partners. While these matters certainly can lead to
complex issues, a well-built shared services capability can
support the initial fielding and triaging of most HR inquiries
and in many cases more than that. In a similar vein,

processes such as candidate screening, learning curriculum
management, and vendor management are specialties that
require degrees of domain knowledge that may emerge as
key functions within the future of HR shared services. The
right level of documentation, training, technology tools, and
resources combine to give HR shared services the ability to
deliver services that go well beyond the back-office basics.
Functional specialists. Across many companies, the roles of
the HR Business Partner or generalist and centers of expertise
continue to evolve as they strive to deliver more business
impact. To continue that evolution, they need to transfer
more administrative components of their work to shared
services. In the prior view, HR shared services responsibilities
were limited to basic administration, while business partners
and Centers of Expertise (COEs) held onto work that required
varied degrees of HR domain knowledge. This retention of
administrative duties within the business partner or Centers
of Expertise functions may prevent people in those roles
from applying their full attention to the enterprises true
people agenda. Creating functional specialist roles within HR
shared services makes it possible for workers with in-depth
process knowledge and expertise to deliver those important,
yet administrative, services across the enterprise.
The expansion to functional specialties, along with core
transaction, data management, and inquiries, helps HR
shared services serve the entire enterprise efficiently.
Through this approach, the organization can apply
repeatable, effective processes to high-value functions such
as corporate transactions, employee relations, high-volume
or unique skill recruitment, and vendor management across
HR functions.
Global-regional-satellite (and virtual). In the early days,

companies built shared services centers with the notion of
serving HRs customers globally. While this model certainly
worked well for many functions, complex enterprises
recognized the challenges that came with supporting
inquiries and other functions that require adaptation to
local cultures, regulations, and languages. This led to the
proliferation of regional centers, often as an alternative to or
replacement of single global centers.
The future of HR shared services, especially as offerings
expand to include inquiry support and functional specialties,
requires an evolved approach that replaces the traditional
model with the balanced deployment of a hub and spoke
construct. Many complex companies can create a wellorchestrated set of service centers that operate as a cohesive
organization, placing work in the right place and flowing
work across centers both upstream and downstream, thus
promoting required efficiency, cultural alignment, and
closeness to the locale where required.
Where the volume of work warrants it, satellite centers may
be physical centers. More often, however, work defined for
a satellite center may occur through virtually based workers
or workers colocated in a business facility rather than a
formal service center. This approach can provide HR shared
services leaders greater flexibility to expand the suite of
service offerings. It can also help them acquire and retain
the HR domain expertise to deliver while maintaining or
reducing the total cost of operation.
78
Criteria for placing work in HR

services centers
Global center
Repeatable requestbased services &
process driven
Consistent Process and
Policies applicable
Global
technology-enabled
Drives synergies/
efficiencies
No language issue
No time zone issues
No legal/reg./
compliance issues
Source: Deloitte
Regional center
Service needs a high
understanding of
regional/cultural
requirements
Delivers services that
cannot be managed
by a global center
(e.g., EE facing contact
center)
Required expertise/
capability not readily
available in location
of global center (e.g.,
language)
Customer population
exceeding a
predetermined size
threshold and/or
smaller countries that
possess characterstics
of larger countries
Satellite center
Smaller than a regional
center
Typically supports a
cluster of countries
and only delivers
services that cannot be
managed by a regional
center (e.g., contact
center)
Required expertise/
capability not readily
available in location of
regional center
Legal and regulatory/
cultural constraints
"Nonstandard"
languages
Must be face to face
Implementing improved technology and tools

Expanding the offerings of HR shared services and operating a balanced hub-and-spoke model relies on a variety of factors.
Among the most important is an improvement in both operational and customer-facing technology tools. Call handling, case
management, and knowledge base technologies are foundational technologies, and they can deliver greater integration and
ease of use.
Shared services leaders face the difficult task of demonstrating a positive return on investment of technology acquisition
with a limited set of high-cost options to achieve the goal. Increasingly, market demand has driven the development and
innovation of packaged and SaaS solutions that improve the deployment speed and operating costs.
Employee relationship management lifecycle
Transact
Defines the
ability for
employees,
managers and
HR to perform
transactions
through a selfservice channel
Technologies:
Portal/
workflow
Document
content
management
Contact
Defines the
contact channels
available to the
customers of HR
shared services
Technologies:
Telephony
Chat/instant
messenger
Route
Defines the
capabilities to
distribute the
contacts to the
appropriate
resources in HR
shared services
Technologies:
Call tree
Respond
Manage
Defines the
capabilities to
handle and
resolve customer
requests
Defines the
capabilities to
operate HR
shared services
effectively
Technologies:
Knowledge
mangement
Technologies:
Case
management
system
Interactive
voice response
Call/quality
monitoring
Automatic call
distribution
Scheduling
tools
Defines the
capabilities to
measure the
performance
effectiveness
and value of HR
shared services
Technologies:
Business
intelligence
Scorecards/
Dashboards
Computer
technology
integration
Source: Deloitte
The HR shared services model of the future demands

the continued use and evolution of those foundational
technologies, along with tools that enhance customers
experiences across the request lifecycle. Focused, strategic
investments in the key areas below, and the process changes
that come with them, are critical to achieving the new future
state of HR shared services while maintaining the necessary
operating cost and efficiency:
Enhanced online channels. Improved user interfaces, live
chat, and on-demand content give managers, employees,
and HR Business Partners more direct access to information.
Knowledge and content management. Broad knowledge
management tools facilitate the presentation of relevant
and personalized HR policies, content, and transaction
support to customers using role-based access, organizational
placement, and language as some of the triggers that
make the online channel experience more effective for
the end user.
Case management. Integrating case management with
the HR portal, telephony, and core HR platform solutions
can accelerate the speed of interaction for customers with
HR shared services, whether online or by phone, and likely
increases the accuracy of information and resolution.
80
Business intelligence. Business intelligence tools that are

often already available in an organization allow shared
services to perform broad analysis of key metrics across
operational, satisfaction, and financial categories. This
drives HR shared services ability to identify the people
management-related trends as well as the opportunities to
improve talent attraction and retention.
Highly automated workflow. Moving work in an
automated, paperless fashion lets HR shared services leaders
improve staffing models, place work in the most skilled
hands, and increase quality of service. Workflow technology
is the engine with which shared services operations can
operate seamlessly across sites.
Thoughtful investments in readily available technologies,
with a focus on enhancing the end-user experience and
fostering the coordination of work within the shared services
environment, are key strategies for realizing the future HR
shared services model.
Provider takes over client operations & technology

Enabled rapid deals and providers to create capability
2000-2003
Line & Shift
Goal: Transform lifted operations through some new

technology, process efficiency and labor arbitage
Provider- and client-designed solution blending client,

provider and new capabilities
Appeared more transformative and consultative
2004-2008
Custom
Goal: Use Human Resource Outsourcing (HRO) as the

driver to fully transform HR service delivery
Recognizing neither of the preceeding models worked well,

providers begin developing "standard solutions"
2009-
Platform
Mix of proprietary and commercial solutions in an

integrated fashion
Goal: Leverage provider practices by adapting client's service
delivery to the solution requirements
Source: Deloitte
Outsourcing strategically
When seeking to establish or enhance HR shared services
organizations, many complex enterprises have encountered
the challenges of investing in the applicable technologies,
which often impairs quality or limits the scope of offerings
shared services can deliver to the company. Alternatively,
faced with the need to realize their visions for HR shared
services, many companies pursued large-scale HR business
process outsourcing relationships with the expectation
that outsourcing providers core business would drive
investment in technologies, service center capabilities, and
talent to support an end-to-end scope of services across the
technology and administration of HR processes.
As large-scale outsourcing providers began to offer services
in HR beyond payroll and benefits administration, HR
organizations started to want everything and providers
offered to do it all. Many believed HR outsourcing would
transform HR service delivery and that led to a frenzy of
outsourcing. Today we know outsourcing is one tool
among many that can support HR delivery as part of a
balanced approach.
The HR outsourcing solution landscape began with lift
and shift approaches and migrated to custom solutions.
It continues to mature with a shift to platform-based
solutions. This evolution provides HR broadly, and shared
services specifically, the benefit of incorporating outsourcing
capabilities both business process and software services.
Strong platform solutions let organizations adopt defined

processes, technologies, and tools that can integrate with
other provider-based and internal solutions.
As both buyers and providers of HR outsourcing services
learn acute lessons, HR shared services organizations
continue to work toward the new future state of offerings
and value delivery to their enterprises. The strategic
application of HR outsourcing has a bright future. A
multivendor approach that brings the right vendor to
each component of work rather than attempting to bundle
all capabilities within one vendor in all cases will help HR
outsourcing continue to mature as an important lever that
spurs the evolution of HR service delivery. This will remain
especially important as organizations work to realize the
future vision for HR shared services.
A strategic approach to HR outsourcing means developing
a tailored scope of services across internal and external
providers, viewing the HR outsourcing provider as one set
of capabilities that delivers services as part of a collaborative
and highly coordinated delivery team.
Applying a thoughtful framework to understanding an
enterprises goals can drive the ability to strategically
outsource the solution and align it with the reality of the
organizations needs and culture. In this way, complex
companies can define an overall solution to fit expectations
and purpose.
82
Some organizations used to assume that outsourcing HR

required dialing-up factors across the board and outsourcing
nearly everything across the HR domain. Deloittes HR
Outsourcing Tolerance Framework helps create a view of
a companys outsourcing profile. Using this framework
through collaboration among key stakeholders can yield
a picture of an organizations tolerance and provides a
foundation to incorporate outsourcing services as part of a
sustainable and executable strategy.
Effective outsourcing requires recognition of core principles:
Every company has different needs and business priorities,
and the scope of services to outsource will vary
Organizational dynamics and culture must weigh on the
determination of scope as well as provider choice
The internal capabilities of an enterprise are important
considerations when identifying the right mix of
internal and external providers to execute the HR
shared services vision
SaaS solutions provide a strong complement or
even alternative to outsourcing solutions and
require careful consideration
Hosted
Best of the
breed
Highly
custom
Broad
Complete
Outsourced
Highly
custom
Significant
Consultative
Significant
Segmented
Retained
Single
breed
Standard
Specific
Limited
Retained
Standard
Limited
Scripted
Limited
Dial Up or Dial Down
Consistent
Human capital
Customer
Infrastructure management
segmentation
hosting
system
portfolio
Technology
flexibility
Portal access
Self-service
adoption
Process and
policy
ownership
Reporting and Data and audit Contact center

analytics
control
approach
Exception
handling
Source: Deloitte HR Outsourcing Tolerance Framework
Putting it together
The future of complex global business demands a new future state for HR shared services one that aligns with the rapidly
changing business expectations of the chief HR officer and teams. Implementing new approaches to HR shared services can
bring measurable value to the global enterprise.
Profitable global growth, entry to emerging markets, flowing talent across a complex enterprise, and increasing the
speed to productive outcomes of significant corporate transactions are among the top business demands global business
must address. HR organizations have a significant opportunity to help their companies navigate the people management
challenges inherent to these critical business needs. Execution against that challenge in an efficient, effective, and valueadded manner dominates the agenda of any future-facing HR shared services organization.
Enabling HR
service delivery
Cloud HR
9
HR shared services
and Outsourcing
10
Global privacy
and Security
11
12
Social
media
11
Global privacy
and Security
The temperature is rising. Protecting your employee data

and your organizations information is a topic of discussion
not only in your boardroom, but also in courtrooms, union
and works council meetings, department functions, and in
peoples homes. As breaches increase, national regulators
and national works councils are taking notice of privacy and
data protection weaknesses. They are imposing penalties
that range from fines and consent decree mandates to work
stoppage or a combination of all three. These penalties are
increasing as international regulations continue to grow in
number and complexity.
But in HR information security, the biggest risk is failing to
meet the expectations of your workforce. Employees are
more sophisticated, and they expect their employers to
protect personal information and abide by the regulations
enacted to protect their privacy.
On the other hand, businesses are still required to deliver a
wide range of efficient services, even as they push toward
rapid global expansion. Self-service and HR analytics are only
the beginning of a list of capabilities your HR service delivery
model is expected to possess. Almost all these services
increase access to personal information, force HR processes
deeper into the organization, and create a more complex
environment for protecting data and keeping personal
information confidential.
Financial
Employee breach
notifications (e.g., U.S.,
Germany)
Post-incident response
(e.g., legal fee,
consulting fee)
Operational
Global privacy laws
and regualtions
Absence of employee
privacy governance
System
implementation
delays
Costly re-work
Lost employee
productivity
Sensitive
data
Regulatory
Deletion of
employee data
Temporarily "shut
down" HR systems
Restricted third-party
data sharing
Mandate third-party
privacy audits
Source: Deloitte
Global privacy and Security
Solutions arise from challenges and vice versa

The technology solutions and service delivery models behind
these changes provide new utility, but also offer new risks.
SaaS applications, cloud computing, smart phones and
mobile applications, and social media and HR analytic
applications lie at the cornerstone of many transformation
efforts. These technologies change the landscape of
privacy, including the ways in which data is protected, how
regulators assess their use, and how employees perceive
the security of their personal information. Outsourcing and
insourcing various functions of service delivery also create
new challenges. Many organizations struggle to understand
how privacy, data protection, and risk relate to one another.
When contracting and monitoring third parties, or when
assuming activities in-house, it can be difficult to know how
to address privacy and data protection controls in areas,
such as cross-border data transfer mechanisms, notice,
choice, and information confidentiality.
As in any transformation effort, leaders are faced with
managing conflicting objectives. Under pressure to provide
more services across a broader, international geography,
how can you do it with the privacy and data protection
controls your employees demand?
86
Before tools, understanding

The solution resides in understanding the components
of privacy and security and how data flows to, through,
and from your organization. Privacy relates to personally
identifiable information (PII) and the ways an organization
works to use and disclose it properly. Within the context of
HR, privacy is how you manage the rights and obligations
related to personal data within your workforce. Security
is more general it describes the way an organization
protects information and systems from unauthorized
access and use. The trick in HR Transformation delivery is
to integrate both privacy and security throughout your HR
services and the systems that support them.
Global privacy strategies are often driven by the crossborder transfer mechanisms an organization selects and is
a way it positions itself to meet the requirements of these
mechanisms for example, notice, choice, access, or
onward transfer. To meet privacy requirements and build
a sustainable model for HR service delivery, organizations
must incorporate these requirements into either new or
existing components of governance. The decisions to be
made include ones focused on policy, procedures, roles and
responsibilities, training and communication, monitoring,
and controls.
These requirements can differ from country to country, so

companies should evaluate them through the lens of risk
using a consistent approach that addresses key regulatory
requirements that are common across many international
regulations, while still supporting the local management of
relevant outlying requirements. In this process, companies
should assess the risk associated with regulatory compliance
in the countries where they do business. They should also
consider specific privacy and data protection risks in the way
personal data is captured, used, transferred, stored, and
destroyed whether it happens within processes, within
systems, at third-party vendors, or within the various formats
and views through which personal data will live within
your organization. The transformation program should
include a careful approach to evaluating these specific risks
and to embedding control designs within the data flow of
your organization.
Security is a component of privacy, and it relates to data
protection measures, such as access controls and data
encryption. But it also encompasses a range of capabilities
found within HR Transformation, including identity
management, application security, and business continuity.
It is important to build transformational solutions that
are designed to secure data from internal and external
intrusion. Security is addressed at the enterprise level, with
services and solutions designed to integrate with the ways a
company manages its overall business, not just HR.
Case study
As a global manufacturing company embarked on a
journey to consolidate numerous and disparate HR
systems, its management realized that there was a
significant risk to the project if privacy and security
were not considered from day one. To help mitigate
this risk, management added a privacy team to the
project that focused on dealing with these specific
requirements for the consolidation.
The team first tackled the problem of identification
of global requirements associated with international
laws, standards, and works council requirements. The
privacy team was helped by a knowledgeable legal
support team, global management with a grasp of
existing requirements, and IT security team members.
Next, in order to understand how these requirements
affected the future state business processes associated
with the consolidated HR system, the to-be
processes were mapped and controls were designed
accordingly. Requirements and controls were also
developed for the broader security components,
including application security and the integration
of the new HR system with their global identity
management system.
Finally, specific privacy and security governance
components, such as an organizational structure,
policies and procedures, and a cross-border data
transfer mechanism strategy were designed and put
into place. The work helped define a more overall
approach to privacy and security for HR and led to the
establishment of a Global Employee Privacy Program
for the organization.
Many requirements
International
regional responses
EU DPD, APEC
Privacy framework,
Safe harbor
(EEA-U.S.)
National
U.S. Gramm-LeachBliley Canada PIPEDA
Australian privacy act
State/Provincial
California SB1
NY security and
notification British
Colombia Bill 73
Contracts
Clients
Partners
Vendors
Seal programs
Policies
Privacy policies
Security policies
Industry and
professional
standards
AICPA/CICA
Identity theft
Unwanted marketing
Brand and Competitive
Addressing use and protection of PII

Use and control
of PII
Cross-border data
flows
Records and data

retention
Information sharing
Requirement commonalities

Front-end obligations
What can the information be used for?

What must the individual be told?
What choices does the individual have?
What can the individual request?
Back-end obligations
Can the PII be shared?

How is the information kept accurate?
Can the information be transferred across
borders?
How must the information be protected?

What information must be provided to the
individual?
How long can PII be retained and how must
it be destroyed?
Who must be told if something goes wrong
and what redress rights does the individual
have?
Source: Deloitte
It is a mistake to integrate these IT security solutions and controls as an afterthought in an HR Transformation. A true
transformation requires the planned integration of security strategies, capabilities, and resources. This needs to be part of the
larger HR Transformation and its related privacy programs. Global roles, seamless application access, application controls over
how systems can be used, business continuity options, and plans are designed better and provide more value when leaders
manage them holistically with the broader transformation.
88
Factors to a holistic approach

In building a holistic approach to meeting privacy and
security requirements within HR Transformation, an
organization can deliver sustainable ways to comply with
global regulations and define efficient methods to protect
data. Key factors to a holistic approach include:
Cross-functional executive support. Privacy and security
is a cross-functional issue that requires strong executive
support and involvement across areas, such as business, IT,
HR, and legal.
Data lifecycle. Before you can understand how to
implement reasonable controls, you first need to understand
where the sensitive data is and how it is used, from
collection through destruction.
Risk-based approach. Focusing on business risk (as
opposed to merely compliance) and identifying and
prioritizing high-risk items can increase the value the privacy
and security solutions can deliver.
Change management. The usefulness of the privacy and
security solutions come down to what people do on a
day-to-day basis, so preparing, educating, and holding
accountable appropriate professionals is vital.
Implementation focus. Because most serious problems
occur when policies do not match operational practices and
capabilities, it is critical to go beyond policy development to
actually operationalizing the policies in business processes
and technology.
The holistic approach offers a practical solution to one of the

biggest challenges of privacy. It can quickly assess the risks
of global regulation, allowing companies to focus privacy
and data protection efforts on the activities that address the
real regulatory issues related to cross-border data transfer,
onward transfer, and secondary use of PII.
Ready to grow
As organizations prepare to compete for high quality
talent globally, they need to redefine what privacy and
security means. They are not just about compliance.
Together, privacy and security constitute a valued asset
to an organization and its workforce. Achieving this takes
an understanding of the privacy and security solution and
each of its components. It is important to make delivery of
privacy and security a part of the transformation strategy
to integrate it in planning, design, and delivery. The
right specialists and tools can help the plan avoid confusing
technical solutions and navigate the maze of global laws
and requirements.
Organizations that plan, embed, and deliver privacy and
security within HR Transformation as a sustainable part of
the new structure do not feel heat from either regulators
or employees. On the contrary, they see real strategic
benefits. They are able to exploit new technologies safely.
They can deliver efficiently and avoid costly refitting of
security and controls after the transformations. And they
can have more agile organizations that can expand into new
global markets without the worry of unprotected systems
and information.
Enabling HR
service delivery
Cloud HR
9
HR shared services
and Outsourcing
10
Global privacy
and Security
11
12
Social
media
12
Social
media
As HR transforms its service to employees, social media can

improve HR efficiency, quality, and value. An HR organization
that uses blogs, wikis, and other collaborative technologies
can help to attract and retain talent, improve the efficiency
of HR service delivery, empower managers to manage teams
effectively, and facilitate leadership that drives innovation
and organizational agility. However, delivering on social
medias promised value involves many challenges. First
among these is HRs awareness of the opportunity to lead
a cultural revolution in the organization. Technology gives
us tools to send information back and forth but social
media is a discipline that leaders can use to connect an
organization through collaboration, innovation, and learning.
Social media and the HR delivery model
Social media has the power to revolutionize HR service
delivery. Many traditional HR portals let employees view
payslips and update personal information. Managers can
review employee profiles, pay history, and open recruiting
requisitions. More mature first-generation portals let
employees enroll in benefits programs, review open

positions, and manage training requirements. Managers can
conduct yearly performance reviews and approve year-end
compensation. Although some managers and employees
are using first-generation portals to conduct HR self-service,
adoption remains a challenge. Forrester predicts that mobile
technology will reinvent the notion of employee selfservice.1 However, increasing the effectiveness of employerto-employee service will take time due to investment costs
and an uncertain ROI.
There is an opportunity to solve this dilemma. Social media
goes beyond one-way communication beyond the static
information a traditional HR portal uses to supercharge
an HR service delivery model. The flexibility to personalize
information, the ease of ordering online, and the ability
to connect with friends and family should be considered
integral parts of an HR service delivery strategy as associates
from executive leadership through entry level have come to
expect and demand this type of interaction.
Social media
Social media, wikis, widgets, blogs, tagging, rich media,

and mashups are commonly associated with personal use,
but can be applied to the workplace. They all encourage
collaboration and increase productivity, process, and
innovation by unleashing creativity across the organization.
These tools can help HR deliver consistent, timely, and
personalized service, driven by online chat and wiki-based
FAQs that can support queries across the globe. Social media
helps establish an employee brand and culture that attracts
Gen Y and multigenerational talent -- an environment where
user experience is based on commercial user experience and
media rich personalization. Generation Y employees (those
born between 1982 and 2000) use these tools every day
to communicate, socialize, and work. As evidenced by the
explosion of social media, the younger workforce tends to
be more accustomed to collaborative social technologies.
They view them as a workplace necessity, not a luxury.
Because these new workforce members bring tech-savvy
skills, global and flexible orientations, and the ability to think
in innovative ways, attracting and retaining them will create
significant competitive advantage in the coming years.
92
Social media encourages employees to create communities

of practice and drive innovation. Delivered through an HR
portal, social media can deliver company communications
and HR policies-- ideally harmonized across divisions-and provide consistency across the organization. Online
FAQs support the HR service center by reducing inquiries
and staffing needs, which contributes to the HR ROI. In
short, social media has the power to bring together the
collective talents, knowledge, and experiences of employees,
around the world, fueling innovation and organizational
transformation.
Delivering HR value
Talent, HR, managers, and leadership can use social media
to drive innovation and transformation throughout the
organization. A hyper HR portal with personalized interfaces,
company networking, and collaborative spaces is a driver
that can attract and retain multigenerational talent. Tools
such as online FAQs, HR helpdesk chats, and advanced
manager self-service improve and increase the value of HR
and its delivery of innovative services and knowledge. The
result is likely more time for HR to function as a true business
driver that helps managers get the most from their teams. A
hyper HR portal encourages managers to rely upon accurate
information to enhance decision making and facilitate global
team development. Finally, as leaders embrace the evolution
of the HR portal, they can transform their organizations into
participatory and self-sustaining cultures.
Social media
To realize the full potential of social media to deliver a

hyper HR experience, the organization must first create
a rich user experience, available on mobile devices, for
sustained use. The enterprise portal is shedding its divisional
focus Procurement, Business Units, HR, Corporate
Communications etc and becoming the one stop
shop for all employee needs. The rich user experiences of
interactive desktop applications, mashups, and enterprise
widgets create an innovative, intuitive, and personalized
employee and manager dashboard, pushing key information
to foster quicker analysis and decision making. RSS, blogs,
and podcasts deliver direct management communications.
Personal branding through blogs helps leadership engage
large, yet focused groups, around areas of interest and
receive real-time feedback.
A rich user experiences delivered whenever and wherever
can bring employees deeper into organizational discussions
and processes by providing answers to business critical
questions and encouraging active participation in
communities of practice. The aggregate solution of online
content sources within and outside the enterprise creates
new, richer HR services adapted to users situational needs.
Complex, global companies across industries have realized

significant value through deploying social media strategies
and tools. For example:
A large financial services company uses social media tools
to keep employees who are on leave actively engaged
with the company. Additionally, through the same access
to Web-based employee-submitted information, HR can
nonintrusively understand and address employee concerns
and issues.
A leading technology products and services company
actively addresses hot-button employee issues by
monitoring social bookmarks and tag clouds on the
companys social sites. Live chat with HR services addresses
employee inquiries with immediate service. An HR/help
desk supervisor can update FAQ content in real time to
help reduce transactions and inquires via email, phone, and
other off-line channels.
Topics posted on one global energy conglomerates
global community knowledge forums usually receive two
to four responses within 24 hours of the initial posting.
Streamlined processes contribute to improving satisfaction,
reducing overhead costs, and improving HRs ability to
work with leadership to create value.
An HR organization must be able to improve and expand

HR value, and social media tools can significantly improve
critical aspects of the employee lifecycle. Podcasts, RSS,
and live chat can communicate benefits information with
employee-defined recommendations. Podcasts and RSS
feeds can communicate retirement planning advice and
benefit updates. Flash benefits alerts provide interactive,
guided presentations on annual benefits enrolment.
Social media
Going beyond the hype implementation challenges

Integrating social media into HR service delivery has risks and
challenges. It takes significant change management actions
to realize the potential these tools offer. Companies that
deploy these tools effectively achieve results by making them
available throughout their organizations. They successfully
manage the potential to lose control of top-down
messaging, as well as the flow of information. However, in
most of the cases where social media tools are deployed,
organizations fail to achieve the primary goals because
they lack two things: a business strategy approach to the
deployment of these tools, and a focus on the risks.
Organizations need clear policies and processes to assess
and manage risk and legal concerns, such as industry Health
Insurance Portability and Accountability Act and safe harbor.
Executives often express concern about giving employees
the ability to create and manage content, and many
information technology departments block employee access
to popular social tools. Some employees may lack the basic
skills or computer access, or may even feel uncomfortable
engaging in online dialogues with their superiors, senior
management, or unfamiliar faces within their company.
Access may even provide dissatisfied employees and
customers a platform to air their grievances.
To manage this expanded measure of freedom, companies
should educate management about the social media
paradigm shift and the business value it produces. It pays
to promote a culture of openness and free dialogue - the
criticality of collaborating with others in the organization
will solve such issues. Use the portal to your advantage, take
feedback as an opportunity to directly address and diffuse
concerns, and above all, be honest and transparent. Do not
be afraid to admit mistakes or wrongdoings or attempt to
deceive your audience.
94
A few specific actions can help an organization in its

efforts to implement social media and minimize
the risks it brings:
Since the long-term costs to support and scale social
media are difficult to predict, start with small, businessdriven projects that generate quick wins to achieve early
business results.
Promote social media as a community-driven initiative, not
a top-down directive, with specific business benefits.
Create compelling site features that focus on usability and
community-building (e.g., my colleagues updates) and
accelerate the network effect. Complement the networks
with blogs, wikis, and content from key influencers.
Engage a cross-representation of champions from
business units, HR, IT, legal, marketing, and public affairs
to garner interest and organizational enthusiasm.
Establish a social media center of excellence to align
offerings to specific business needs.
Provide users a first line of support for usage questions,
technical support, reporting violations, and/or feature
requests.
Continue to recruit advocates in the business to keep
content fresh and sustain ongoing usage of the tools.
Encourage top-level management to model desired
behaviors as active, passionate contributors and not
spectators.
Social media
A worthwhile trip
With an insightful implementation approach, organizations
can overcome the challenges and realize the potential of
social media to attract talent, improve the delivery of HR
services and knowledge, help managers to manage teams
effectively, and transform organizations into participatory
and self-sustaining cultures.
When HR professionals move forward with insight into how

human capital adds value to an organization, they can be
forefront of this revolution. However, the organizational
and technical hurdles come first. Once those are cleared,
HR leaders can realize their essential role connecting
organizations so they can collaborate, innovate, and learn.
Endnotes
Trends 2011: HRM Processes And Applications MoveAhead Despite Mixed Employment Outlook by Paul D. Hamerman, with Connie Moore, Claire
Schooley, and Andrew Magarie. Forrester Research, Inc. January 14, 2011
1
HR functional
perspectives
96
HR functional
perspectives
Talent
13
14
Payroll
Compensation
16
15
Benefits
Global
mobility
17
Contingent
workforce
18
13
Talent
The future of talent management

When it comes to processes and technology, it is time to
treat talent like a business imperative.
Todays talent leaders are searching for ways to cope with
challenges from skill gaps to globalization to concerns about
succession planning and future leadership. Given the critical
nature of these talent issues, organizations have responded
with a broad array of initiatives that focus on talent
attraction, development, and retention. According to a 2010
Deloitte survey, talent leaders top concerns include:
Continuing talent shortages despite high
unemployment rates in the U.S. and abroad. Many
executives predict talent shortages across key business
units and executive leadership which are needed
to drive growth and innovation. Nearly three of four
executives surveyed predicted talent shortages in R&D.
The global race for talent. The recession did not reduce
the pace of globalization instead, many executives
recognize that the once-emerging markets of the
pre-recession days have become the catalysts for future
growth, placing tremendous demands on talent managers
to get new people in new jobs at new locations.
Challenges in developing the next generation of

leaders. Looking out over a more complex and everchanging business environment and the impending
retirement of baby boomers, many executives expressed
concern over their companies leadership development
programs and pipelines, believing this will be the highest
talent priority three years from now.
Retention of critical talent. Fifty-nine percent of
executives reported that voluntary turnover had increased
between October 2009 and October 2010, and 61
percent believed that it would increase over the following
12 months. Moreover, 29 percent of respondents
expressed very high concern about losing critical talent,
and 25 percent reported a very high concern about
retaining leadership.1
Talent concerns remain high despite global economic uncertainity
41% of executives
surveyed named competing

for talent globally and in
emerging markets as a
top concern
Source: Deloitte Talent Edge 2020
98
63% of executives
surveyed are concerned about

losing high-potential and
critical talent over the next
12 months
7 in 10
executives surveyed will
increase their focus in
succession planning,
developing emerging leaders,
and leveraging workforce
planning tools
Talent
While organizations have had varied outcomes addressing

these top talent priorities, many organizations are now
sorting through a patchwork of their various talent
approaches, programs, and initiatives. The near-term result
is an operational headache that should be rationalized and
made manageable for the long term. However, a variety of
challenges should be overcome.
A programmatic view. A common response to talent gaps
has been to conceive of and execute various programs
such as new recruiting strategies, strengthened career paths,
enhanced retention incentives, or modified performance
management processes. Unfortunately, these approaches
have typically focused on what to do, not how to do it.
That can place insufficient focus on the resources it will
take to implement and then sustain these initiatives over
the long run.
Siloed activities. Even talent-oriented organizations tend
to address their talent issues topic by topic, not within
the context of an integrated talent strategy or framework.
Because different elements in the talent lifecycle are closely
related, this lack of a holistic view can stand in the way of
achieving strategic talent objectives. In addition, the people,
processes, and technology supporting these activities often
operate with minimal coordination or integration.
Localized solutions. Not only are talent programs, policies,
and technologies separated across talent silos, they also tend
to vary by country and region, which multiplies the effort
and cost needed to maintain them. As companies seek to
operate on a more global basis, this makes it increasingly
challenging to achieve talent objectives both effectively
and efficiently.
We have made talent a priority

for years, but now we have a mix
of programs and initiatives and no
long term approach for managing
them in a consistent, integrated,
or global manner. In short, we
have a bit of a mess on our hands.
Chief talent officer, industry-leading global company
Lack of data-driven approaches. Organizations have
invested in talent programs based largely on intuition.
Some of these investments have yielded benefits, but few
organizations can quantity them. Many organizations focus
on the investment required to implement a program but fail
to account for or monitor the effort to manage it over the
long term.
Based on these types of challenges, even organizations that
have deployed satisfactory talent management programs
have found difficulty controlling the infrastructure people,
processes, and technology to sustain them. Many are
also finding they need to plan, implement, and manage
talent initiatives with an operational mindset that more
closely resembles the way they address other business
challenges. This heightened focus on the operational aspects
of talent strategies can be referred to as talent-led HR
Transformation and can be a key element in the next
evolution of HR Transformation.
Talent
The next frontier of talent management: Talentled HR Transformation

After years of investments in talent programs, policies,
tools, and initiatives, companies are trying to operate talent
activities more efficiently and effectively. They also want
greater impact from the significant investments they have
made. In fact, getting the execution of talent right has
been identified as a top priority, as indicated in the survey
results shows on this page.
While HR Transformation has typically focused on the more
administrative aspects of HR such as payroll, benefits,
compensation, employee relations, and other high-volume
transactions organizations are now finding it is time to
bring these same transformation principles to the realm of
talent management. Talent-led HR Transformation is the
application of traditional HR Transformation principles
beyond the administrative aspects of HR and into the
critical realm of talent. The opportunities for doing so can
be significant.
Service delivery strategy: Workforce planning. Recruitment.
Performance management. Learning and development.
Succession planning. Diversity. Incentives and rewards.
Historically, talent programs have evolved separately, as have
the processes and departments that support them. Achieving
a more coherent and streamlined approach to talent begins
with establishing the service delivery framework across the
entire talent lifecycle. Typically, the first step is to understand
how these programs are supported today, then identify
the critical interdependencies and possible redundancies
that present opportunities for improvement. It can also
be revealing and beneficial to examine these areas from a
customer perspective as many of these processes touch
the same internal customers consistently.
100
How do you anticipate your organizations focus on the following emerging talent strategies will
change over the next year?
Talent operations and technologies
38%
29%
Social media and collaboration
38%
28%
Global diversity management
38%
27%
42%
Accelerated leadership
Virtual and tele-work programs
36%
Workforce flexibility
36%
Employer brand
38%
Gender issues
Significant positive impact
28%
65%
64%
64%
22%
64%
28%
64%
28%
61%
23%
37%
Generational issues
66%
27%
37%
Global mobility strategies
67%
57%
20%
28%
49%
Positive impact
Source: Deloitte Talent Edge 2020: Blueprints for the new normal and Human Capital Trends 2011
A service delivery strategy defines the talent programs that

HR will deliver to the organization, and how they will be
delivered. As a start, the strategy includes:
How talent leadership and work will be organized within
the organization
Roles and responsibilities, including across:
Talent lifecycle components
HR, operations, managers, and employees
Regions, countries, and sites
The type and number of resources that will support
talent programs
Which programs will be driven globally, regionally,
or locally
Talent
Process redesign: When they examine the processes

required to support talent programs, many organizations
find significant opportunity for simplification and
streamlining often within specific talent disciplines, but
especially when examined across the talent lifecycle.
A process-based approach can also uncover gaps
between talent processes that can diminish the benefit
of these programs.
One common gap is onboarding clarifying the
processes and ownership for bringing a new employee into
the organization from a 360-degree perspective. Other
gaps include connection points between performance
management and learning (how do outcomes from
performance management processes tie to collective training
strategies and individual learning plans?) and performance
management and succession planning (how do outputs
from the performance management process become inputs
into leadership development and succession planning?).
Process redesign should account for which aspects of talent
management will be driven by global processes and which
will be managed regionally or locally. For global program
areas, processes should clearly articulate the required steps
and the roles and responsibilities of stakeholders from end
to end. Where such process clarity does not exist, defining
it can often require significant input and consensus. Even
processes that will remain regional or local often require
more clarity in their expectations. Leaders must understand
how local processes may tie to global ones. For example,
how does a regional performance management process tie
to a global succession planning program?
In short, a process-based approach can identify

opportunities for streamlining and greater efficiency,
as well as opportunities for greater impact of talent
programs through clarified interdependencies across
the talent lifecycle.
Outsourcing: Historically considered only for administrative
HR activities, companies are increasingly finding that
outsourcing may present better and more cost-effective
talent solutions. For example, recruiting process outsourcing
(RPO) is rapidly growing both for discrete recruitment
activities (such as sourcing or screening candidates) and
on an end-to-end basis. As demand for such services has
grown, the vendor marketplace has expanded and leading
firms can deliver broad service offerings.
Beyond cost and quality, clients find that RPO can provide
faster solutions to emerging business needs, like building
new skill sets or reaching into new geographies, than having
to build such capabilities internally. As with more traditional
HR outsourcing, it is critical for the client organization
to keep its focus on requirements for their retained
organizations a clear plan for what activities will remain
internal, who will perform them, and how such processes
will interface with those that have been outsourced.
Talent
Shared services: As with outsourcing, companies

have typically applied the shared services approach to
administrative HR processes. In more strategic areas, such
as for talent activities, theyve organized around Centers
of Expertise. But in the process view, many activities within
the talent lifecycle have characteristics more consistent
with those in shared services: high-volume, standardized,
and administrative transactions. Numerous examples apply
across virtually all aspects of the talent lifecycle, including
coordination of the performance management process,
execution of incentive compensation decisions, resume
or application receipt and processing, or maintenance of
professional certifications. For organizations with HR shared
services operations in place, performing a close review of
talent processes for potential integration into shared services
can allow the organization to perform these activities more
efficiently while freeing center of excellence professionals to
focus on more value-added talent strategy activities.
Technology: Within the past three years, talent-specific
technology solutions have taken off. This movement has
been largely the result of improved capabilities provided
by leading vendors both from traditional ERP solutions,
as well as from emerging SaaS players. New and improved
solutions exist across the entire lifecycle, with particular
attention focused on performance management, recruiting,
workforce planning, succession planning, and learning.
The result is that HR organizations have more tools at their
disposal than ever to carry out the talent strategies their
organizations require.
102
Given recent market attention, technology is clearly a highly

visible component of talent-led HR Transformation. However,
it is important to maintain a focus on the organizations
business requirements, business processes, and intended
service delivery model before investing in new software
applications. This is particularly true in the world of SaaS.
While these systems can offer numerous advantages,
including reduced financial investment and faster time to
deploy, the standardized nature of SaaS solutions means
customers have less flexibility to tailor these solutions to
meet their needs.
Other considerations for talent technology include:
User experience: Unlike core HR systems, whose main users
are HR practitioners, talent systems are touched by many,
if not all, managers and employees within a company. That
means selected talent technologies should align to the skills
and styles of the workforce and be accessible when and
where the workforce needs them.
Languages: Particularly for global organizations, language
selection is a critical consideration. Companies need to
balance the benefits of user adoption and the quality of the
user experience against the costs to implement, maintain,
and support multiple languages and to customize content
beyond standard features.
Talent
Integration: Increasingly, organizations are finding

that talent processes are interrelated, and that the data
associated with talent processes can have greater value
when it is integrated across the entire talent lifecycle.
Organizations should carefully assess potential solutions to
realize this high degree of integration if not provided
within a single solution, then at minimum with solutions that
are easily integrated with other tools and systems.
Analytics: Meaningful talent data can directly improve the
quality of talent strategies. Unfortunately, while most talent
technology providers claim to deliver meaningful analytics,
many fall short of expectations. These deliverables tend to
be historically focused reports as opposed to insightful
data that can be used for go-forward planning and decisionmaking. Companies exploring these solutions should place
particular scrutiny in this area.
Data privacy and security: With governments placing more
scrutiny on data privacy and security, companies should
select a vendor that can demonstrate deep understanding
of current requirements as well as capabilities to navigate
potential future requirements. This is particularly true for
SaaS solutions, in which management of data is no longer
controlled internally.
To drive integration and cost benefits, companies should

thoughtfully assess the available talent technology
providers and build a strategy that matches their business
requirements today and those expected for tomorrow. While
new SaaS solutions can make it easier for organizations
to follow a best-of-breed approach, selecting the right
solution for each different element within the talent
lifecycle, it is important for companies to weigh the benefits
of greater functionality against the additional effort required
to integrate across talent modules.
Talent
Keys to talent-led HR Transformation

As organizations seek to transform their approach to talent
management through an increased focus on operations
and technology, several considerations can help companies
accelerate their progress:
Clarifying governance over talent management planning
and operations is a critical early step in transformation.
Moving away from a department-by-department approach
to managing the talent lifecycle means organizations will
need greater day-to-day coordination, as well as more
integrated decision-making over talent priorities and
investments. For most organizations, this will require not
only new organizational structures, but also new ways
of evaluating overall talent priorities and programs and
selecting where to make investments. This likely means new
governance processes within HR, as well as clear channels to
get input and assess these decisions through direct business
leadership input. As organizations seek greater global
approaches to talent management, this governance will also
need to account for global input and alignment.
104
Transforming talent functions includes considering

the skill sets needed in the new environment. As
talent management processes become less siloed, less
administrative, and more data-driven, organizations will
find that certain practitioners in their talent centers of
excellence today may not possess the strategic or analytical
skills needed for the future. Likewise, talent strategists will
be expected to bring not only innovative concepts, but also
more management understanding. Talent professionals in
general need greater skills in quantitative analysis, process
design, and operations.
Organizations need a clear talent technology strategy
aligned to their talent management strategy. With
the attention the talent technology market and leading
vendors are receiving at present, too many organizations
are deploying such solutions without clear requirements.
More importantly, many organizations have unrealistic
expectations for the impact these solutions will have.
Organizations will find, as is the case with any technology,
that these solutions are just tools they wont resolve
broader talent management objectives without requisite
attention on other critical dimensions, such as service
delivery design, process design, change management,
and governance.
Talent
As with any transformation, change management is a critical prerequisite to talent-led

HR Transformation. This can be especially true for an area, such as talent management,
which touches every employee in the organization. New approaches to talent management,
whether in service delivery design, processes, or new technology, can require a high degree
of stakeholder engagement, communication, and education both for the HR professionals
who drive these processes and the employees and managers who will use them.
Organizations that transform the operational infrastructure supporting their talent strategies
have the potential to see significant efficiency gains from clarified service delivery models,
streamlined processes, and the greater automation gained from talent technology. Better
allocation of talent resources, selective use of outsourcing, and greater use of shared services
for talent-related activities can yield further efficiency and cost improvements.
While these efficiencies will please some, the real benefit of this transformation will actually
be improved effectiveness of the talent programs themselves. Activities such as improving
connections between components of the talent lifecycle, clarifying global versus regional
versus local approaches to talent, and improved integration and use of data will not only
improve talent operations, but will also enhance the organizations ability to execute its talent
strategies and, in turn, address business needs for growth, globalization, and innovation.
Endnotes
1 Talent Edge 2020: Blueprints for the new normal, Deloitte Development LLC, 2010. Available online at
http://www.deloitte.com/view/en_US/us/ Services/additional-services/talent-human-capital-hr/Talent-Library/talent-edge-2020/index.htm.
HR functional
perspectives
Talent
13
14
Payroll
Compensation
16
15
Benefits
Global
mobility
17
Contingent
workforce
18
14
Payroll
Is your organization concerned by how little is known about

global payroll management, compliance, and operations?
Would an inability to protect employee data and keep
up with complex regulatory changes affect your brand in
the marketplace? Many multinational organizations seek
to improve their global payroll operations, but they are
paralyzed by what they do not know:
How many vendors are managing our operations globally?
Do we have the appropriate contract and legal protections
to promote business continuity and data security?
Which countries should I consider in-scope? Do I have
a problem?
How much does global payroll cost? Is the benefit worth
the effort?
Is the effort to answer these questions too large? Is the
approach unmanageable? Many organizations have
answered in the affirmative before. But now, many are
reconsidering that position.
Defining global payroll and the delivery models

What is global payroll? Does it mean payroll is outsourced to
one vendor globally or moved to one global payroll system?
Potentially. Does it mean a global governance structure is
put in place and that vendors are consolidated or managed
by shared services regionally, either in-house or through
outsourcing? More likely. Most organizations cannot take a
one-size-fits-all approach.
Effective global payroll management evaluates the
organizations business needs and typically blends the
following delivery models to cover the globe:
Country-specific servicing models:
Operations are managed at the local level
Systems can be in-house or outsourced
Payroll is often the system of record for both HR and
payroll data
Global governance is rarely in place
Processes and policies vary from country to country
Payroll
Regional servicing models:

Operations are managed at the regional level
Organizations use in-house systems, outsourcing, or a
hybrid approach, and reduce vendors by continent
Regional governance, processes, and policies are in place
HR and payroll system of record definitions are in place at
a regional level
The largest markets may be served regionally with small
markets using country-specific solutions (due to cost
of migration)
The Asia Pacific region is typically preferred to standardize
operations
Multicontinent or global delivery model:
Operations are managed at the regional level with
global oversight.
Organizations use in-house systems, outsourcing, or a
hybrid approach.
Global governance, processes, and policies are in place.
HR and payroll system of record definitions are in place at
a global level.
Organizations reduce vendors globally.
Large multinational organizations rarely standardize 100
percent of employees onto a single platform or provider.
The global delivery framework typically includes countryspecific solutions for small markets.
108
Why consider global payroll?

In one word, globalization. Organizations are increasingly
borderless, but they still have to pay employees, remit taxes,
and complete tax reporting timely and correctly. Failing
to do so can trigger multimillion dollar fines and penalties
from taxing authorities. In this environment, a payroll
service delivery model must be nimble enough to help a
global organization achieve efficiency and effectiveness and
address the potential cost of not getting it right. An effective
global payroll service delivery model can provide enhanced
compliance, including management of tax payments (to
reduce penalties that could be assessed), accuracy of payroll
processing (to reduce risk of litigation), and better control of
financial resources.
Managing funds appropriately, or failing to pay talent
and taxing authorities correctly, can carry large risks. An
efficient global payroll service delivery model can allow
for strong governance to understand enterprise risks and
gives visibility to potential issues and liabilities. A regional or
country-specific approach includes inherent liability without
governance or oversight.
It is common for an organization to have invested millions
of dollars to implement global HR systems and processes
only to learn that its global workforce is not using the new
solutions. These same organizations are using global payroll
transformation investments as a means to firmly establish
their global HR systems as the required/preferred system of
record for employee data.
Payroll
How do I get started?

The first step in the payroll transformation journey is to
define the critical components of the overall strategy.
Most organizations are working to strengthen controls,
compliance, and management capabilities while
simultaneously eliminating redundant systems and
processes. Organizations typically ask themselves the
following questions to determine the dimensions of their
strategy:
Holistic view. Is the highly interdependent payroll
function fully integrated with the HR and financial process
and technology vision?
Flexibility and responsiveness. Are the current global
HR/payroll models and environments flexible and
responsive to rapidly changing business conditions?
Stakeholder demands. Are the demands for value and
service increasing?
Governance. Do the governance models and processes
perpetuate business unit independence, survival instincts,
and tribal knowledge?
Compliance. How do you know the existing payroll
applications are well controlled, monitored, and producing
the desired results?
Stakeholder value. Are you achieving value from existing
providers? Are the demands for value and
service increasing?
What are the appropriate delivery models for my

organization?
Developing a business case in conjunction with a payroll
strategy helps to identify the preferred delivery model for an
organization. Balancing costs against compliance, quality,
and value objectives helps define the appropriate model for
a given set of business needs.
What can I expect on the transformation journey?
A worthwhile road, but not an effortless one. When
undertaking global payroll transformation projects, a number
of challenges will likely arise, including:
Inconsistent processes and business functions across legal
entities, business units, and countries
Complex legislative and data privacy requirements in
continental Europe
Exaggeration of legislative requirements to resist
global standards
Staffing shared service centers with resources that have
both language capabilities and payroll experience
Justifying the business case to remediate countries with a
small number of employees
Reconciling data differences between global HR systems
and local payroll solutions
Provider return. Are you achieving appropriate value

from in-sourced or out-sourced providers?
Payroll
Answering the right questions will shape your delivery model
What is the
current state?
What are my business

objectives?
What are my
alternatives?
Which models are

applicable for
our business?
Evaluate current state:

Global footprint and cost
Clarify objectives:
Employee experience
Evaluate alternatives:
High-impact countries
Evaluate business case:

Define global and regional
standardization
Controls and risks
Cost containment
Low-impact countries
Data sources
Reduce redundancy
Change readiness
Input processes
Standardization
Legislative complexity
Payroll outputs
Tighter controls
Language
Solution road map and

associated costs
Systems and support
Minimize risk
Viable partners
Business benefits
Vendors and contracts
Scalability (acquisition)
Efficiency gains
Business continuity
System of record
People impacts
Accountability
Operational back-up
Costs
Identify retained legacy

platforms
Source: Deloitte
These challenges can be mitigated by creating a common language that all affected parties can understand
and follow:
Payroll policy. Establish the responsibilities for managing key inputs to the payroll processes and assign accountability and
responsibilities between the lines of business, HR, benefits, tax, payroll, and finance.
Common terms. Create and define their system of record and key data definitions to smooth the overall global design and
allow for the elimination of redundant and duplicate manual transactions.
Common standards. Develop a global framework that includes global processes and standards. The only acceptable
deviations from global standards should be verified legislative requirements.
The goal line. Define your end-state service models.
110
Payroll
What is the key to transformation that works?

Change from the top and buy-in from everywhere else.
An effective global payroll model, whether standalone or
as part of a broader HR shared service function, can yield
significant benefits for the business as a whole, for the
functions that offer those services, and for the business
units. The functional leader, in many cases the CFO or CHRO,
gains greater consistency and control over the quality and
delivery of the capabilities being shared. The enterprise gains
greater visibility to people-based and financial information
across the enterprise, contributing to enhanced workforce
analytics capabilities.
To achieve the end-state payroll model that benefits the

organization in meaningful ways, it is necessary to win
buy-in from the business units and to define a governance
structure. A global payroll model can deliver the expected
value only after a company builds a business case; makes a
case for changing the status quo; defines an implementation
path for systems, processes, and people; and commits to
championing the change as a way to mitigate resistance
from the business units over their perceived loss of control.
HR functional
perspectives
Talent
13
14
Payroll
Compensation
16
15
Benefits
Global
mobility
17
Contingent
workforce
18
15
Benefits
Administering benefits on a world-wide basis

Is global benefit administration possible?
Global benefits administration has historically been focused
on single process transactional services specific to one
country or geography (e.g., Europe, the Middle East, and
Africa (EMEA), AsiaPac) with the United States being the
United States market for benefits administration most mature, with both United Kingdom and
Australias maturity on the increase
Benefits administration market maturity
U.S.
U.K.
Canada
Australia
New Zealand
Netherlands
Germany
France
Italy
Mexico
Belgium
Brazil
They always say time changes

things, but you actually have to
change them yourself.
Andy Warhol
single largest geographic marketplace. Companies have

developed transaction service solutions primarily for savings
and pension administration since those programs are most
analogous around the globe. And, while health & welfare
program administration is expected to be one of the
fastest growing segments of the benefits administration
marketplace, that growth is concentrated to the US given
the vast diversity of programs and prevalence of government
sponsored health related benefits across the globe.
According to data in the October, 2010 Nelson Hall
report entitled Targeting Benefits Administration, North
America, and specifically the US, is the dominate force in
the outsourcing market with the rest of the world a great
distance back with that dominance.
China
Japan
India
Portugal
Benefits administration market size

Source: 2010 Nelson Hall
Benefits
The solution providers have been narrowly focused by

domain (savings, pension, health & welfare, leaves) or
location with very few Global Total Benefit Administration
(GTBA) solutions available. Multinational companies have
looked for GTBA solutions for over a decade. Yet, despite
the long-awaited administration nirvana, the market has
been slow to develop solutions that allow companies
with global operations to efficiently manage their delivery
of employee benefits in an integrated way. In the gap,
employers have been forced to use patchwork approaches
that are becoming less acceptable in light of mounting
pressures to control cost and manage risk while maintaining
scalable and flexible delivery solutions that meet the everchanging needs of the workforce and the business.
The patchwork quilt of solutions that employers are using
spans internal benefit operations and/or shared services
(including on-shore or off-shore) to date enabled by ERP or
point solutions to total outsourcing and many combinations
in between. And while certain aspects of the delivery
solutions have evolved, such as the emergence of SaaS,
there has been a shocking lack of disruptive innovation.
The increasing costs of benefits continue to gain the
attention of employers, financial markets, and regulators.
In fact, according to a recent study, six of the top thirteen
benefits related challenges identified by a large cross-section
of employers are related to the costs of benefits. The other
key benefit related top-of-mind issues for employers include
talent attraction and retention and aligning benefit
programs with the strategy of the business. More telling,
however, is the increasing focus on the benefit service
delivery model as inefficient, fragmented, and with high
levels of administratively complexity resulting from global
benefit programs.
114
28%
Inefficient and fragmented HR

delivery model
28%
27%
The cost of providing retirement

benefits to employees
27%
24%
Re-evaluating the mix of financial

versus non-financial rewards offered
in our total rewards programs
28%
Volatility in the cost of providing

retirement benefits arising from
investment or interest rate changes
22%
24%
17%
Administrative complexity associated

with global reward programs
15%
12%
The cost of providing health

care benefits to retirees
0%
2010
12%
5%
10%
15%
2009
Percent of companies ranking each among their top 5 challenges

Source: Deloitte 2010 Top 5 Total Rewards Survey
Simultaneous to the evolving needs of employers, the

benefit administrative solutions marketplace is going through
a transformation. The maturation of the savings and pension
administration solutions has resulted in commoditized
services and shrinking margins. Given the difficulty to
differentiate, solution providers have found it necessary
to continue to invest in new products and services. These
market conditions have resulted in companies exiting the
market and numerous mergers amongst solution providers
in every market segment (ERP, SaaS, Point Solutions,
Outsourcers). As a result, what had been a buyers market
over the past decade has swiftly shifted to a sellers market
with increasing costs and less flexible solutions.
20%
25%
30%
Benefits
While improving margins for solution providers may result in

the short-run, the clear view for the long-term is that GTBA
solutions are the next growth opportunity for solutions
providers and demand from employers is increasing. The
prevailing perspective, however, is that solution providers
must build GTBA solutions differently than traditional
local market solutions. Global solutions are less likely to
be one-size-fits-all solutions and will require coopetition
(cooperation amongst competitors) to occur in many areas
to create a hub and spoke model.
Some solution providers are beginning to view GTBA to
mean in-country voice for call center menus, representatives,
single client-specific HR branded portal with multiple
supported languages, global data warehouse and analytics,
and onsite support where appropriate. This model addresses
the direct employee facing needs most employers have while
creating the flexibility that may be needed to use a variety
of delivery solutions that are determined on a country-bycountry basis.
Additionally, new solutions have traditionally been
developed for the largest customers and then those
solutions worked their way down-market to mid and smaller
sized organizations. For GTBA to evolve, global solutions
will have to start small (i.e., single domain across multiple
geographies or multiple domains within a single geography)
as a proof of concept and then move up-market.
With this background in mind, what are employers with

workforces across multiple countries to do? There are
four ways that employers can continue to drive to more
efficient GTBA:
1. Recognize the limitations of creating a single
global solution and create a global framework,
or governance model, for all countries
The process, technology, talent and regulatory
requirements for the administration of benefits are
extensive. Making the most of benefits service delivery
involves challenges including scarcity of internal resources,
a maze of third-party vendor contracts and the need for
effective change management within HR and the broader
organization. Blink and a regulatory change or merger can
make the situation even more complex.
To build a sustainable benefits delivery model that rolls
with the punches, enhances employee satisfaction and
minimizes the cost of the delivery, balance needs to be
found across three critical areas:
Efficiency. Organizations can realize significant savings
through program and vendor management, self-service
solutions, vendor contracts and reduced technology
customizations.
Flexibility and scalability. Benefit service delivery models
are dynamic. Business and regulatory changes drive the
need for administrative changes and program design
must respond to current needs and anticipate new ones.
Compliance. In todays continually changing regulatory
environment, it is important to develop controls and
performance metrics to assess compliance risk, identify
opportunities for improvement and act on them.
Benefits
2. Redefine what makes a global solution truly

integrated start at the bottom with a Global
Data Warehouse
As multinational companies work to address the
challenges of global benefit delivery, an area of increasing
interest is the promise of efficient benefits administration
on a global scale. In theory, it is not hard to envision that
the optimization of an organizations benefit offerings
around the world would yield extraordinary opportunities
substantial third-party cost-savings, reduced internal
overhead for program and vendor management, and
leveraged buying power are three clear outcomes to
expect from an effective global benefits program.
One of the key issues in benefit administration is data
quality, ease of access, ability to update and maintain,
use for reporting purposes, etc. Since one of the biggest
drivers of benefit administrative costs, as well as one
of the biggest business risks associated with benefit
administration, is data, focusing efforts and resources to
build a Global Data Warehouse that is the single source
of data truth can deliver even greater value for companies
along their path to effective global administration than
attempts to achieve a single GTBA solution.
Employers both need and want to be able to inventory
and run analytics across their global enterprises. Solution
providers are beginning to architect Global Data
Warehouse solutions that allow clients to have real time
analytics that can be executed by country, region, and
globally regardless of who provides the administration or
technology platforms.
116
3. Redefine global US, UK, and one or two other

countries under a single solution with spot
solutions in all other countries
While the focus on globalization of employer benefit
service delivery is resuming, companies are not showing
a preference for a single global benefits provider.
Rather, there seems to be a preference for the right
administration partners in key markets. One size
fits all does not resonate as clearly as we know
this market, creating a new mantra in the global
benefit administration arena is Govern globally but
serve locally."
4. Embrace/create disruptive innovations - Disruptive
innovations such as SaaS combined with cloud
computing, applications of social media, and
direct to consumer models, and others
Creativity is the name of the game when it comes to
addressing the needs of such a dynamic area. Without
the application of new approaches, technologies, and
delivery models, benefits administration would still be
managed on mainframe computers with paper forms.
SaaS in the Cloud (SITC) will begin to gain momentum
at the expense of ERPs. SITC is likely to take off in the
mid-market due to its speed and lower price points than
ERPs and the success of SITC in the mid-market will be
critical before large and jumbo companies are going
to trust the model. New SITC entities are building with
global solutions in mind and will be more nimble outside
of the US once they stabilize.
Benefits
While companies continue to look at ways to gain

consistent, efficient and cost-effective benefit administration
solutions across the globe, the challenges associated with
the delivery of US H&W benefits are expected to continue
to consume a great deal of employers time and resources.
Additionally, there are generally less mature administration
solutions in the marketplace for this area of benefit delivery
so employers frequently find that the options available for
the administration of these types of benefits are sub-optimal.
There is an opportunity for disruptive innovation in this area
and the market should expect that the coming few years will
bring new solutions.
In summary
Optimizing benefit service delivery can provide significant
cost, service and business flexibility advantages to
employers, including:
Potential 15 percent to 25 percent cost reduction
through program and vendor consolidation, leveraged
buying power, favorable contracts and savings through
technology and process customization
Reduced risk through operational assessments and
improved governance
Improved service through simplified administration,
intuitive employee and manager self-service solutions and
competitive service level agreements with fees at risk
Improved business flexibility through configurable
technology platforms, adjustable vendor resources and a
focus on maintaining core competencies during periods of
business transition
Efficient operations for combined or new HR functions
resulting from mergers or spin-offs
HR functional
perspectives
Talent
13
14
Payroll
Compensation
16
15
Benefits
Global
mobility
17
Contingent
workforce
18
16
Compensation
Consistent where you can be: The future of

compensation delivery
Global companies face a myriad of issues revolving around
the primary theme of balancing global consistency with
local needs. The desired outcome is often a series of
compromises that trade country-specific requirements for
a degree of standardization that cuts across borders. In
the HR arena, one important test of a global mindset is
compensation delivery, and it is in this area that a number of
large enterprises have not achieved a value-creating level of
effectiveness and simplification.
With the past decades explosion in M&A activity, and
many global companies' operations of separate but related
businesses, it is common for global organizations to work
under a complex, varied set of compensation programs,
practices, procedures, and processes. This complexity can
lead to a dysfunctional compensation model where time
would be better spent on strategic issues like content
creation and meaningful customization but is instead spent
on operations and administration.
For example, cross-border teams may assemble as peers,

but find themselves at different levels of title, pay, and local
authority. The search for a qualified collaborator may suffer if
a given title means one thing in one country but something
different in another. And, as employees move around the
globe more frequently, they need to find recognizable and
equitable compensation and incentive systems no matter
where they work.
As the talent marketplace outgrows local and national
boundaries, it becomes more important to replace a
patchwork of compensation programs and delivery with a
more centralized model. With appropriate governance in
place, organizations can achieve standardization without
sacrificing the important benefits of local customization. This
move toward harmonized compensation stands in parallel
with the increasing global alignment of other HR operations
and shared services. The next several years should see the
process accelerate, especially as technology drives it.
Maintaining a global web of ad hoc compensation systems

has several disadvantages. They often lead to higher net
labor costs, inhibit HR from performing strategic roles in
the business, increase the time required of managers and
leaders in the compensation process, and add administrative
cost due to duplication and inefficiency. In addition, these
varied, complex programs also interfere with creating a truly
global organization.
Compensation
Where should work be done?
Extensive Centers
of Expertise
Deep design and
process ownership
at all levels
Organizations can approach their compensation programs

by assessing the goal of each program component. This
can lead to the appropriate balance between global and
local standards. For example, if the goal of the job structure
is to make cross-border moves for employees seamless,
global consistency is appropriate and a tightly controlled
120
Low
Low
The initial design of Compensation Centers of Expertise will

likely depend on two key factors: Organizational maturity
and program complexity. A very mature organization with
highly evolved programs, processes, and technology will
tend to require a smaller global Center of Expertise focused
primarily on strategy and plan design. This is also true
where compensation programs are highly standardized
and few exceptions are made. On the opposite end of the
spectrum, organizations with widely varying plans, lots of
exceptions, and less mature processes will likely require an
extensive Center of Expertise with deep design, process, and
administrative ownership.
ns
io
at
z
i
n
rga
eo
z
i
s
rge
to la
Mid-
m
all
-si
ze
org
a/n
izat
ions
Small global
Strategy/design
focused
High
Organizational maturity
(process, platform)
Getting it done: The appropriate decisions at the

applicable levels
The early steps toward a globally consistent compensation
function may be familiar to veterans of any large-scale
transformation: Use analysis and benchmarking to
understand the current state, define a target state that
meets strategic and operational requirements, and empower
an effective team to move the organization from Point A
to Point B. In this transformation, a focus on the delivery
model is crucial. Establishing the whats and wheres of
delivery helps promote the accountability and integrity of
the compensation program. In many cases, establishing a
compensation delivery model using a Centers of Expertise
approach can be a useful path in moving toward global
consistency and standardization.
Program standardization
(number of plans, exceptions, changes)
Source: Deloitte
job architecture may be managed by the global Center of

Expertise. On the other hand, if effective recruiting in growth
economies is of concern, more flexibility on compensation
structure and local control of decisions might be provided.
An effective service delivery model can provide defined roles
and responsibilities that support organizational strategies.
A typical Center of Expertise structure has multiple layers.
At the top, a global Center of Expertise can work with
senior leadership to establish strategic priorities. Below that,
regional teams that may be part of the Center of Expertises
can roll out those priorities in a way that is sensitive to
location-based needs. By the time a local office delivers HR
services to its employees, or perhaps oversees an employee
self-service environment, the global view can be built-in.
High
Compensation
Sample compensation roles and responsibilities
Primary activities
Global Center of Expertise
Works with senior leadership to establish strategic priorities

and objectives
Establishes vision and frameworks for global programs
Works with regional Center of Expertise to deliver products
and services
Regional Center of Expertise
Receives strategy and objectives from global Center of

Expertise
Responsible for service delivery for products and services
Leverages operational resources for tactical delivery
Comp Operations
Works with regional Center of Expertise to develop plans for

delivery of products and services
Executes plan to deliver products and services
Works with other areas in HR to leverage service delivery
Compensation technology business owners (system design,
testing, implementation support, and ongoing maintenance/
updates, Tier 2 and Tier 3 support)
HR Service Center
Provides service delivery on in-scope services

Provides process and standardization improvement for
in-scope services
Compensation technology Tier 1 support
Delivery
Strategy
Decision-making level
Source: Deloitte
A Centers of Expertise structure, such as the one outlined above, provides the appropriate
decision rights and controls to improve the integrity of the program. Who has the authority
to develop a new pay program? Who can make employee pay recommendations? And, more
importantly, where are they approved? The framework may also provide guidelines for
compensation matters and more formal policies for others depending on the criticality of
each element of a compensation strategy.
The need for adjustment to the compensation model may be continual, but when the heavy
lifting ends, a global organization can achieve a value-creating level of simplification and
standardization under which employees receive appropriate compensation for similar levels
of seniority, achievement, and contribution. Titles and roles should be defined in terms that
make sense to everyone, and employees should be able to move among locations without
feeling disoriented or worse, disadvantaged.
Compensation
Barriers to balance
Moving to a coordinated global compensation Center of
Expertise often requires an organizations compensation
team to change processes, systems, and philosophy. That
can raise the bar for buy-in and make agreement and
implementation a challenge. An organizations maturity
level can determine its readiness for change and guide the
direction and pace of work. And no matter how welcome
the transformation, it still requires a great deal of time
and energy.
For local offices or distinct business units, control over
compensation is historically a measure of independence.
Convincing managers to embrace a new standardized set
of programs, practices, procedures, and processes can take
compromise. The team in charge of this effort should tune
into cultural differences because elements, such as title
structures, are easy to upend at the stroke of a pen, but are
often very meaningful at the local level. A well-orchestrated
communications and change management program is
critical to the implementation of the new model.
As important as it is to establish an appropriate
compensation model, companies often take on that
challenge during a trigger event that necessitates the
compensation change. Trigger events could be growth past
a certain threshold, a merger or acquisition, implementation
of a new IT system, or compliance issues that force change
across the entire enterprise. Wise organizations take these
opportunities to improve the way they do business. They
invest the time and resources to develop an effective, wellthought-out approach to delivering compensation programs
and services.
122
Real life,complex experiences

A global information provider found itself top-heavy,
with high labor costs and too much of HR leaders
time spent on transactional and administrative tasks.
Acquisition had contributed to the imbalance. By
working to adopt new tools and implement a more
centralized compensation model, the company
introduced benchmarking to overcome ad hoc market
pricing for talent, and helped different functional
teams work more productively together.
A large organization undergoing an abrupt takeover
proved how hard it can be to determine the before
picture in a compensation centralization project. One
important data point was the identity of the 200 most
highly paid employees and because the existing
system was so decentralized, it took several attempts
to come up with that list.
Compensation
Conclusion
By following a detailed design and development process, an
organizations compensation programs can be standardized
and simplified to an appropriate level that removes noise
from the system. But what does an organization get in
return for embarking on such a journey?
Programs and services will better align to the way the
organization does business, and reward programs will
likely be better positioned to achieve their intended
purpose.
Accountabilities will be assigned, appropriate governance
controls should be in place, and labor costs can be
appropriately managed.
Administrative costs will likely be reduced by improving
efficiency and reducing duplication of effort.
Compensation professionals should be able to focus on
strategic business issues
Consistency of decisions and compliance will be improved.
Ultimately, a well-designed compensation service delivery
model can help foster an atmosphere in which reward
programs provide more value to the organization and
to employees.
HR functional
perspectives
Talent
13
14
Payroll
Compensation
16
15
Benefits
Global
mobility
17
Contingent
workforce
18
17
Global mobility
Companies need a global workforce, and global mobility,

now more than ever. They are sending an increasing
number of people abroad, in a wider variety of roles, for
many reasons: to prepare for and respond to opportunities
in global production; to promote research, development,
and innovation; and to improve customer sales, service,
and growth. At the same time, global market uncertainty is
putting companies under tremendous cost pressure. That
makes it imperative for leaders to carefully manage their
global mobility investments and to realize an appropriate
return on them.
Yet a surprising number of companies continue to handle
international assignments the way they did decades ago.
Then, most assignees were senior-level managers from the
headquarters country sent to help establish operations in
new markets, and each assignment was handled as a special
event with expectations for broad, high-touch service.
Today, companies global mobility programs may offer
only a handful of assignment types that fail to reflect the
growing variety of the companys global talent needs. Some
managers may give little thought to aligning the companys
An effective global mobility program should:

Provide guidance to businesses on mobility-related
decisions to help align assignments with business and
talent objectives
Deliver a spectrum of HR services, coordinate physical
moves, maintain compliance, and deliver services to
assignees
Integrate global mobility and talent management
practices by deploying employees to suitable positions
when they return to their home countries
Use an appropriate mix of internal resources, external
service providers, and technology tools to deliver costeffective, high-quality service
investment in an assignment with the expected business
benefits, or to the effect an assignment may have on an
employees career development. Operationally, international
assignments may be managed end-to-end by dedicated
global mobility personnel, even if some of the work could be
done more efficiently by the companys mainstream HR or
talent functions.
Global mobility
Many companies can enhance the value of their global

mobility efforts by taking a more thoughtful approach to
planning and managing international assignments. Doing
so requires a formal global mobility strategy that articulates
the programs business and talent management goals, and
then tailors the companys investment in each assignment to
the value the assignment is expected to generate. Further,
companies should look for opportunities to integrate their
execution of global mobility with their mainstream HR or

talent infrastructures, reserving global mobility specialists
for the particular activities that require them. The result can
be a global mobility program that supports the business
as a strategic asset instead of simply reacting to individual
opportunities as they arise one that delivers high-quality
service that is cost-effective, consistent, and relatively easy to
use, manage, and administer.
Global mobility framework
Development value
High
Low
Learning experience
Strategic opportunity
Target employees
Rising stars
Employees looking for diversity in experience
and personal growth
Target employees
Future leaders"superstars"
Global mobility approach

Expat light
Focus on development
Expect participants to bear some of the
burden
Commodity job
Skilled position (management or

technical)
Target employees
Volunteers
Low-cost talent
Target employees
Demonstrated performers
Deep, specialized skill sets

Minimal perks and support
Local transfers
"At risk" assignment

Short term or "local plus"
Project-based assignments
Rapid deployment
Low
Source: Deloitte
126

"Expat plus"
Focus on development, experience, and
retention
Enhanced future opportunities
Business value
High
Global mobility
Global mobility strategy

Aligning global mobility strategy with business and
talent strategy means designing it to support both the
organizations business goals what it wants to accomplish
in the marketplace and its talent development goals
what it wants its key talent to learn about working in a
global environment. In this way, global mobility evolves from
a check-the-box exercise to a key driver of business and
talent development strategy.
One tool that can help leaders better align their global
mobility strategies with their overarching business and talent
strategies is the global mobility framework shown on the
previous page. The framework is built around two specific
dimensions business value and talent development
value which reflects the fact that different assignments
can have different value for the business, as well as

different value for helping employees develop new skills
and capabilities. By categorizing assignments into the four
quadrants of the Global Mobility Framework, the framework
can help leaders:
Articulate the nature and extent of the value they expect
to gain from the companys global mobility efforts, which
may/can make it easier to set expectations for assignees
and measure their performance against expected results
Decide what proportion of the companys assignments
should fall into each category, depending on the business
current and anticipated future business and talent
development needs
Determine what kinds of employees would be most
appropriate to send on which types of assignments
Spotlight on technology
Using technology effectively to support global moves can help reduce costs while improving service quality and
compliance. It can also help business leaders make better, more informed mobility decisions. An effective global
mobility program requires a well-developed and integrated technology platform that can:
Facilitate employee and manager self-service
Support compliance
Provide dashboard reporting for program performance
Give leaders an integrated view of global talent demand
Give leaders a single, overall view of workforce information including data on international assignees, who tend
to be the most expensive segment of the workforce
Drive in-depth analysis of expatriate data
Global mobility
Global mobility execution

In an age when many organizations have made substantial
investments in HR infrastructure and operations, the time
is ripe for the global mobility function to shift many of its
routine administrative responsibilities to HR Shared Services
or operations. This can not only reduce costs and improve
service quality by giving the appropriate tasks to HR and
talent specialists rather than to global mobility generalists,
but also free the global mobility function to focus on
deploying global talent more strategically.
One particular challenge in this regard is to determine which
activities require the specialized capabilities of the global
mobility function, and which activities can be integrated
with the companys broader HR infrastructure. Experience
guides ways to divide the work in three areas:
Global mobility service delivery. It takes specialized
capabilities to deliver appropriate global mobility services to
business leaders. These services should center on helping
business leaders understand how to apply the global
mobility and workforce strategy when making decisions
about individual assignments and the overall mobility
program. One area where the specialized skills of a mobility
professional can be particularly valuable is in helping
executives plan assignments, select candidates, and manage
the return on investment.
128
Global employee rewards. A strategic global mobility

function is a logical home for subject-matter specialists a
place where they can work with a companys Total Rewards
function to help design rewards programs and policies
for different types of assignments and to help customize
rewards for special situations. On the other hand, although
expatriate rewards programs may require specialized insights
to design, they can often be administered through the same
HR processes and systems that serve nonmobile employees.
For example, it may not be necessary for a global mobility
function to maintain processes that parallel or even duplicate
those already in place for local benefits administration.
There is a contrast when delivering services to assignees.
Integrating global mobility service delivery with broader
HR processes and infrastructure can create a number of
opportunities to reduce costs and increase value by handling
both global and local employees with a single operating
model. In particular, companies may be able to leverage
their mainstream infrastructure for basic HR support
services such as benefits enrollment and life event reporting.
Companies also can benefit from mechanisms that allow
international assignees to stay plugged in to their homecountry talent management processes.
Global mobility
Technology. Companies should work to reduce any

specialized global mobility applications that are not
integrated into the HR and talent workflow, or which
require significant resources to operate and maintain.
Greater integration of global mobility drivers with a
companys HRIS is critical to creating global mobility
processes and systems that are affordable, practical, and
scalable to meet increasing future global mobility needs.
A high quality HR technology infrastructure should include
the ability to track, manage, analyze and make strategic
decisions on the global mobility workforce in a way that is
consistent with how the organization manages nonglobal
employees. The business needs are the same, so the
technology tools to support those needs should have the
same capability. That said, global mobility programs may
require some limited specialized internal controls and

processes for certain purposes, especially compliance.
Payroll, immigration, and off-cycle compensation
adjustments and delivery are all areas where an international
assignment can have significant implications for compliance
and where technology can play a major role in gathering,
organizing, and correctly reporting the required information.
Given the central role of global growth across all aspects of
business in the coming decade, developing and executing
a strategic global mobility program should be a top priority.
Organizations around the world should be prepared to
integrate global mobility into the overall strategy of the
organization and execute the program seamlessly. Most
importantly, they should develop continuously global talent
to drive long-term shareholder value.
HR functional
perspectives
Talent
13
14
Payroll
Compensation
16
15
Benefits
Global
mobility
17
Contingent
workforce
18
18
Contingent
Workforce
Businesses have dramatically increased their use of

contingent workers over the past decade as they struggle
with rising labor costs and the need for a workforce that
can quickly adapt to market conditions. Contingent workers
are people who are not on the company payroll but provide
services to an organization, such as contractors, consultants,
temps, and advisers.
Even in todays job market, there is a shortage of workers
with critical skill sets. This has resulted in a steady, yearover-year growth in the size and cost of the contingent
workforce. As the baby boomer generation (about one-third
of the U.S. workforce) is starting to retire, companies
are bridging the critical skills gap with more contingent
workforce. Clients regularly report that the contingent
workforce is increasingly being used for strategic reasons,
such as supplementing internal talent capabilities as well as
for operational reasons such as increasing the flexibility and
responsiveness of the workforce. Some large companies
estimate that up to 30 percent of their procurement spend
goes toward contingent workers.
Other organizations have seen the ranks of contingent

workers swell so much that they may represent a larger
percentage of the workforce than regular employees.
Some of these organizations are overspending to use
contingent workers in roles that they could fill at a lower
cost with qualified talent elsewhere in the marketplace. The
challenge organizations face here is understanding what
skills and services contingent workers provide and helping
managers make the applicable/specific fact-based decisions
on whether to fill a role or skill need with a contingent
worker or a full-time employee.
Different cohort, different approach
Although the contingent workforce segment is growing
in importance and its size, many organizations may not be
skilled at managing it effectively. Major challenges include
the lack of an integrated workforce management strategy,
ad hoc (and at times high-risk) managerial behavior, poor
data management, and inadequate technology. These
shortcomings can expose companies to significant business,
financial, and public relations risks. Additionally, the lack
of an integrated solution across these areas can inhibit an
organizations ability to make decisions about what type of
talent to deploy where.
Contingent workforce
As more companies understand the issues associated with

contractors and manage them well, they can benefit from
improved operational performance, lower labor costs,
informed staffing decisions, more organizational flexibility,
and stronger HR alignment with business objectives. This
gives them the ability to source and procure contingent
workforce talent that is high-quality, aligned to the specific
business needs, and available on demand to meet
immediate talent needs. Managers can make good talent
decisions at the time of need, and the processes and systems
are in place to manage and mitigate the risk of contingent
worker administration across the worker lifecycle.
Conversely, poor management of contingent workers
can negate many of their potential benefits. One risk can
be legal and regulatory challenges when governments
pursue companies that misclassify contingent workers.
This can lead to significant penalties, fines, and legal costs.
Another potential downside is when managers use the
contingent workforce to work around headcount and labor
spend controls, driving increases in baseline costs with no
discernible increase in value.
In addition, the expanding use of contingent workers can
expose companies to competitive risk from the loss of trade
secrets, intellectual property, and organizational knowledge.
When these workers support business critical functions and
interact with customers, the lines between employees and
the contingent workforce blurs.
The contingent workforce issue is particularly timely given
current market and regulatory conditions. The dynamic
nature of marketplace conditions and the talent market
are leading organizations to rapidly increase their use
of contingent workers so they will have the flexibility to
132
respond as market conditions quickly change and to help

secure talent that is otherwise challenging to source.
Additionally, the global regulatory environment is tightening:
Governments are investing more in regulatory and
investigatory efforts to crack down on companies that may
be improperly categorizing workers from a tax perspective or
exploiting the grey space in labor regulations.
Vision for getting it done
Managing these risks and truly taking advantage of the
opportunity requires an enterprise-wide approach based
on broad collaboration across the company, with programs
targeted to specific business audiences. Leading businesses
today are adopting these kinds of broad strategies. They
generally involve creating standardized, cross-functional
business processes, policies, and roles across business
units and regions, supported, where possible, by a single
information technology platform. By involving the various
internal and external stakeholders in the HR-driven
management of this workforce, organizations can mitigate
the risks and create the applicable model for ownership
and accountability. These internal stakeholders include HR,
talent, strategic procurement, finance, IT, security, and real
estate, while the external stakeholders may include HR
outsourcers, contingent worker firms, and external advisers
or consultants. Companies can design their approach to
bring transparency to their contingent workforce spend
and management and use the internal processes and
technologies in place within the organization.
In order to achieve these objectives, organizations can

follow a three-phase approach that moves from data
collection and assessment through analysis and design to
implementation and value capture. This process focuses
on creating:
The effective management of contingent workforce can help

the workforce mix support both business strategy and the
overall talent management program. Select outcomes for
talent include increased capabilities around:
A business-aligned workforce composition that makes the

highest-value use of contingent workers
Demand and workforce planning. Protection for

core employees and increased flex labor based on
business needs
A contingent worker operating model supported

with integrated processes, technology, and roles and
responsibilities across the key stakeholders of HR, finance,
procurement, risk, and the business
Sourcing and selection. Reduction of maverick hiring

of contingent workers by clarifying gaps in talent and
driving contingent workforce sourcing activities through
established channels to meet these needs
Retention and development. Promotion of knowledge
transfer from skilled contingent labor to FTEs and retention
of contingent workforce talent with different and desired
skills for in-house capabilities
Phase I Data collection &

Assessment
What is the
strategic
direction of
the organization?
What are
the critical
workforce
segments?
Assess and
Evaluate
strategy
Identify
critical
workforce
segments
Phase III
Implementation &
value capture
Phase II Analysis & Design
What data
do I have
to work?
What skills
do we have
now and
where did
we get them
from?
What skills
will we
have in
the future?
Next year
In five years
What skills
will we need
in the
future?
Next year
In five years
What is
the gap?
What are
my options
to fill
the gap?
What is
the plan?
Metrics:
Define,
Capture,
Report
Supplydemand
analysis
Supply
forecast
Demand
forecast
Gap
analysis
Identify
options to
fill gap
Design and
Implement
plan
Source: Deloitte
Key challenges and practical advice

The key challenge many organizations face as they
navigate the contingent workforce landscape is finding the
appropriate balance. On one hand they need to manage
and limit risk, while on the other they must maintain the
ability to flexibly and proactively respond to business needs.
Organizations are facing particularly difficult situations
around the following areas:
Contingent worker technology. There is no shortage of
options in the marketplace for tracking and administering
contingent workers. These options range from the
traditional ERP human resource management system (HRMS)
vendors who provide the capability to store information on
contingent workers to vendor management system providers
who provide specialized solutions to other new entrants,
such as SaaS-based HRMS providers that provide integrated
solutions. There are a number of practical considerations
when deciding what technology to consider, and much
depends on the number of contingent workers, how
distributed the administration is, the tolerance for leveraging
providers, and what level of analytics and decision support
capability the organization needs to provide to managers.
Tracking and administering contingent workers in a single
integrated system is a critical foundational element of any
contingent workforce strategy. The exact right technology
will depend on the organizations broader technology
strategy, service delivery model, level of outsourcing, and a
series of other drivers.
Vendor consolidation. Organizations are also faced with
deciding the appropriate mix of vendors and how to balance
vendor strength with the need to manage labor costs and
geographic footprint. Each contingent worker sourcing
provider brings different strengths and capabilities. Again,
134
organizations need to consider practically what their current

and future needs are for the contingent workforce, then
develop a strategy that can scale to the future needs at a
cost that provides ongoing value to the business. It helps
to use a short list of vendors that are carefully aligned to
specifically defined talent needs and to source contingent
workers through vetted and approved vendors that have
defined accountabilities for supporting the organizations risk
and cost management practices.
Ownership and accountability. Organizations are also
finding the need to assign accountability for the contingent
workforce where previously ownership for pieces of
the overall contingent workforce lifecycle tended to be
distributed. The key decision is whether one function
can or should own the overall process. Practically, it may
be better for one organization to be accountable, with
specifically defined responsibilities for parts of the lifecycle.
An effective model depends on HR to drive the charge
given the workforce and talent component. However, this
requires careful integration and ownership with finance,
procurement, risk, legal, and the business. Managers need
to be empowered and held accountable for the workforce
decisions they make and practices they employ. Finance
needs to take ownership for cost and budget controls.
Procurement needs to own the vendor strategy, contracting,
pricing, and supplier evaluation components. Risk and legal
need to provide specific direction regarding the processes
and practices. HR should carefully integrate contingent
worker processes, policies, and guidelines into the existing
HR service delivery model and systems where appropriate.
In order to make decisions on these particular components,
it is critical for the organization to develop a strategy for the
contingent workforce and how the administration should be
operationalized to deliver results to the business.
Examples and case studies

A large public utility wanted to achieve several operational
improvements. Specifically, it wanted to allocate contractor
costs to specific work orders, obtain correct contractor
headcounts, forecast future contractor expense, and
compare contract labor rates prior to payment. To
accomplish these goals, the company developed an
end-to-end, enterprise-level solution addressing people,
process, and technology. The results:
Improved work planning and cost visibility
Reports that assess contractor performance
Improved cash flow by forecasting needed financial
commitments
Automatic cross checking and assessment of
contractor rates
Realized savings in the range of $35 to $85 million
per year
A global financial services organization wanted to increase
the transparency of its spending on contingent workforce,
manage risks associated with contingent workers, and
establish a method for tracking data and measuring
performance. It developed an enterprise-wide approach to
management, reporting, and risk, with a new technology
solution to support these efforts. The results:
Conclusion
The contingent workforce is an increasingly important
component of an integrated workforce strategy. In terms
of both spend and headcount as a percentage of the total
workforce, this category continues to grow under business
and talent market pressure. With increased regulatory
pressure and enforcement, leading organizations are moving
quickly to get ahead of this trend by managing the inherent
risks in bringing nonemployee talent into the organization.
Leading organizations are making targeted investments
to develop the operations capability they need to support
this population of talent with integrated cross-functional
processes, well-developed technology integrated with other
existing technologies, and aligned stakeholders across
functions and the business to drive accountability for this
workforce. With these investments, organizations are able
to take the next step in maturity. This allows the business to
have access to specific resources, from particular sources, to
meet the applicable needs and all in a cost rationalized
and risk managed manner.
More efficient processes

Improved procurement influence
Mitigated tax liabilities associated with coemployment
Centralized platform with reporting guidelines
Authors
Jason Geller
Principal, Deloitte Consulting LLP
jgeller@deloitte.com
Arthur H. Mazor
Senior Manager, Deloitte Consulting LLP
amazor@deloitte.com
Business Driven HR Transformation:

The Future Starts Now
Setting the Global HR Transformation Strategy
Karen Bowman
karbowman@deloitte.com
Erica Volini
Jason Geller
Robin Lissak
rlissak@deloitte.com
Arthur H. Mazor
amazor@deloitte.com
Brett Walsh
Partner, Deloitte LLP
bcwalsh@deloitte.co.uk

evolini@deloitte.com
Arthur H. Mazor
amazor@deloitte.com
Michael P. Stephan
mstephan@deloitte.com
Dan Sundt
Senior Manger, Deloitte Consulting LLP
dsundt@deloitte.com
Change Analytics
Dan McHugh
damchugh@deloitte.com
Danielle Hawkins
Manager, Deloitte Consulting LLP
dahawkins@deloitte.com
HR Organization
The Numbers Behind HR
The HR Chief Operating Officer
Benchmarking
Robin Lissak
rlissak@deloitte.com
Flip Gilbert
Partner, Deloitte s.a.
fgilbert@deloitte.lu
Jason Geller
Gary Gerstner
Specialist Leader, Deloitte Consulting LLP
ggerstner@deloitte.com
Governance and Decision Rights
Workforce Analytics
Randy Di Bernardo
rdibernardo@deloitte.com
Rishi Agarwal
rishiagarwal@deloitte.com
Andrew Hill
Partner, Deloitte Touche Tohmatsu
andrewhill@deloitte.com.au
Russ Clarke
Director, Deloitte Consulting LLP
rclarke@deloitte.com
HR Business Partners and Centers of Expertise

David Parry
davidparry@deloitte.co.uk
Aaron Alburey
Director, Deloitte LLP
aalburey@deloitte.co.uk
John Houston
jhouston@deloitte.com
Enabling HR Service Delivery

Cloud HR
Global Privacy and Security
Laura Garbacz
lgarbacz@deloitte.com
Rena Mears
Partner, Deloitte & Touche LLP
renamears@deloitte.com
John Malikowski
jmalikowski@deloitte.com
David McKeon
Director, Deloitte & Touche LLP
damckeon@deloitte.com
Brian Borzone
bborzone@deloitte.com
Michelle Murphy
mcmurphy@deloitte.co.uk
Claire X Gillies
Sr. Manager, Deloitte LLP
clgillies@deloitte.co.uk

Marc Solow
msolow@deloitte.com
Arthur H. Mazor
amazor@deloitte.com
Social Media
Joseph Press Ph.D
Specialist Leader, Deloitte Consulting LLP
jopress@deloitte.com
HR Functional Perspectives
Talent
Global Mobility
David Parent
dparent@deloitte.com
Gardiner Hempel
Partner, Deloitte Tax LLP
ghempel@deloitte.com
Payroll
Beth Shanton
bshanton@deloitte.com
Richard Wildt
rwildt@deloitte.com
Brian Proctor
brproctor @deloitte.com
Karin Angvald
Manager
Deloitte Tax LLP
Kangvald@deloitte.com
Benefits
Contingent Workforce
Melanie Langsett
mlangsett@deloitte.com
Michael Gretczko
mgretczko@deloitte.com
Compensation
Ann Manal
amanal@deloitte.com
Tom Joseph
tjoseph@deloitte.com
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms,
each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of
Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of
Deloitte LLP and its subsidiaries.
Copyright 2011 Deloitte Development LLC. All rights reserved.
Member of Deloitte Touche Tohmatsu Limited

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Global Business Driven

See farther down the line

Global Business Driven

HR Business Partner and

Setting the global HR Transformation strategy

Enabling HR service delivery

Global Business Driven HR

Next generation HR Transformation

Global Business Driven HR Transformation: The Future Starts Now

Business drivers that affect HR

Globalization and emerging markets. As business

Global Business Driven HR Transformation The Journey Continues 5

Global Business Driven HR Transformation: The Future Starts Now

Talent. Most savvy business leaders know that having

Emerging technologies. New technologies such as cloud

Global Business Driven HR Transformation: The Future Starts Now

Risk and compliance. This business driver affects HR in a

ratcheting up for growth, or navigating the twists and turns

Setting the global

Setting the Global HR

Aligned, not alike: What does global mean?

Globalization: Building the right infrastructure

What is truly meant by global?

Globalization is not just about minimizing differences.

A one-size-fits all doesnt fit

Global Business Driven HR Transformation The Journey Continues 11

What is truly meant by global?

Understanding the options

apply (See table on next page.). A set of objective criteria or

What is truly meant by global?

Connecting the dots

Improving the infrastructure

Seeking a global view of its data to drive

Seeking to drive toward a more global

Seeking significant cost savings

Roles are standardized to drive security

Roles are standardized for HR operations

Roles are standardized across the

Common processes to support the

Common processes across critical areas

Common processes across the

Multiple systems are integrated via feeds

Core set of common systems focused

One global HR system used as the

While the implementation investment

This model is often premised on a

The extent of globalization in

Global Business Driven HR Transformation The Journey Continues 13

What is truly meant by global?

Case in point: the global evolution

Selecting the ideal option: It is about aligning to the

What is truly meant by global?

Specific challenges and practical advice

Lots of ground to cover

Even after the implementation, keeping the new solution

In the years to come, a global organization will likely be one

Adopting the new view described here, gaining critical

Global Business Driven HR Transformation The Journey Continues 15

Setting the Global HR

Drives implementation of new HR

Develop business unit HR strategies

Business unit HR strategy

Develop HR policies and programs

HR policy and program effectiveness

Manage the change process associated with cost reduction

Align performance and rewards with speed, flexibility,

Assess employee loyalty and retention and potential impact on