Systemic HR: What's It Mean for HR Leaders?
The old HR operating model rooted in siloed HR functions is out. Now, HR teams require an integrated, systemic approach to be able to understand and prioritize business problems and deliver insights.
HR is fundamentally interconnected with every aspect of the business, but HR functions have historically operated rather siloed and independently. Experts and analysts like Josh Bersin are calling for a new operating model. It’s an evolution that Bersin has referred to as Systemic HR, which recognizes the interconnections between these formally siloed HR functions and considers HR as an operating system instead of an operating model.
In the old model, HR practitioners tended to focus on discrete tasks that they generally completed in isolation from other functions—talent acquisition was separate from performance management, compensation and benefit management were separate from talent management, and managing turnover was separate from employee development. Systemic HR will allow HR professionals to play an enhanced role in supporting the overall business and its objectives by ensuring that HR practices are deeply embedded.
So, what exactly does this new operating system mean for HR, and how can leaders begin to implement these practices in their organization? Let’s dig in.
What is Systemic HR?
At its core, Systemic HR represents the interconnectedness of the HR function. HR encompasses many layers and disciplines across the employee lifecycle, from recruiting and learning and development (L&D) to compensation and employee retention—and many in between. The employee lifecycle and the needs of the business are dynamic and HR function must be able to respond to these needs with agility and precision. Systemic HR codifies HR practices so that they more closely align with the strategic goals of an organization, which in turn enhances the effectiveness and impact of HR initiatives.
“Systemic HR means the HR organization evolved from service delivery to product offerings to consulting,” shares Bersin. “It signifies the organization is agile and adaptable, able to mobilize skills and technologies to address major talent challenges.”
According to Bersin’s latest report on systemic HR, just 11% of companies have Systemic HR functions today. These HR functions have a measurable impact on the business. The report finds systemic HR functions are:
12 times more likely to accomplish high levels of workforce productivity
9 times more likely to engage and retain talent
7 times more likely to adapt well to change
2 times more likely to exceed financial targets
2 times more likely to delight customers
Keeping up with a dynamic environment
Systemic HR is a new operating system driven by modern-day impacts including a long-term labor shortage, accelerated industry transformation and competition on a global scale, rapidly advancing technology, and the changing workforce.
Consider healthcare. The healthcare industry is the largest employer in the U.S. and it's expected to produce 50% of all new jobs over the next 10 years. Retailers like Amazon are getting into the healthcare delivery business. What new skills will be required to keep the business competitive and innovative as this evolution continues?
Or when you consider green energy, which, with government subsidies is expected to be one of the highest employers in the future as countries shift from fossil fuels to solar, electric, and batteries. How will these changes impact the skills and talent needed to improve revenue?
In the last few years, we've also seen the growing power of unions as evidenced by the recent SAG Aftra and UAW strikes. Even Apple Stores and Starbucks are beginning to unionize. Societal changes are also impacting the workforce. Couples are getting married later in life and are having fewer children. Workers are growing old and retiring. These are all cross-disciplinary problems that require a holistic response.
Starting with the business problem is essential
A systemic approach is about understanding whether your HR function is prepared for the changes occurring in the economy and the workforce. It can help you evaluate your current HR readiness as well as determine whether you have the right skillsets in place to achieve the talent outcomes you need. "This is not a bunch of individual domains and individual centers of excellence and individual professionals doing individual things," says Bersin. "This is a function that should be operating as an integrated system across the company to make the company more successful, to make the employees happier, and make the financial systems better."
Systemic HR requires the HR function to work differently than it does today. First and foremost, it requires CHROS to fall in love with the business problem, and HR and people analytics teams to start with the business question instead of the solution. Working closely with senior leaders, HR will need to ensure a clear understanding of business needs, challenges, and goals so that HR practices can be supportive of these outcomes. While some HR practitioners may struggle to change their thinking, technology can help to inform the process. Armed with the right data and analytics, they can easily determine whether this approach makes sense for their organization.
Systemic analytics are crucial
Systemic people analytics unifies HR data and business data purposefully, enabling stakeholders across the business—including analysts, business partners, people managers, and executives—to access and analyze insights without relying on data scientists or IT. Systemic analytics brings multiple sources of information—including people data, HR data, and business data—together into one place that stakeholders can access, digest, and use to make strategic decisions quickly.
Doing this efficiently and cost-effectively requires a robust people analytics platform that can process sometimes massive amounts of data from a wide range of sources and inputs, make that data immediately and seamlessly available to users, and allow HR and people analytics leaders to apply insights across the entire organization, not just individual business units.
4 steps HR leaders can take to get started with Systemic HR
Start with the business problem. HR leaders must understand the needs of the business and stay in lockstep with other business functions to deliver the right insights to the right people at the right time.
Breaking down silos. HR is in a position to lead efforts to break down the silos that have typically existed in the HR organization.
Data-driven decision-making. Leveraging people analytics and data-driven insights across the organization can help HR leaders identify key patterns, trends, and opportunities for improvement, along with the ability to support their recommendations objectively.
Change management. The move to a systemic approach is a significant undertaking that will drive impactful change. HR leaders need to be ready to manage change within their teams—and across the organization. This will require communicating the new vision, addressing concerns, and guiding staff through the transition.
Ultimately, HR leaders will assume a collaborative leadership style that emphasizes partnership and cooperation across all organizational areas and functions to build strong relationships with other leaders and to ensure ongoing alignment with business goals and objectives.
There has never been a better time for HR and the business to fully integrate to form a mutually beneficial relationship that bolsters the success of both through the adoption and application of systemic analytics and HR. Download The New Rules of HR to learn how HR leaders can implement Systemic HR in their organizations.
Systemic HR FAQ
What is Systemic HR?
Systemic HR is a human resource strategy that emphasizes the interconnectedness of the HR function that aims to unify data silos within HR and connect workforce data with the operational systems that run the business. Systemic HR integrates people data, HR data, and business data together. Systemic HR requires a business-aligned HR strategy, an integrated HR operating model, systemic people analytics, and purpose-built HR technologies.
What is systemic analytics?
Systemic people analytics unifies HR data and business data purposefully, bringing multiple sources of information together into one place that stakeholders across the business—including analysts, business partners, people managers, and executives—can access, digest, and use to make strategic decisions quickly.
On the Outsmart blog, we write about workforce-related topics like what makes a good manager, how to reduce employee turnover, and reskilling employees. We also report on trending topics like artificial intelligence, using generative AI in HR, and how skills are rapidly evolving, and advise on HR best practices like how to create a strategic compensation strategy, how to manage HR data, and how to use reports vs. analytics. But if you really want to know the bread and butter of Visier, read our post about the benefits of people analytics.