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Successful HR transformation through change management

02-04-2024
Change management within HR transformation provides the opportunity to walk the journey with your people and lay a solid foundation for success.

Transforming the HR operating model within organizations is essential to align HR practices with the ever-changing business needs. To maximize the success of HR transformations, organizations should apply the three key principles of change management for a successful transformation.

Unlocking success in HR transformation through Change Management

Human Resources (HR), traditionally known for its supportive role within organizations, faces a fundamental imperative: to evolve in sync with the business and recalibrate its operating model to effectively enable the organization's overarching goals.

All forms of HR operating model transformations, whether it involves adopting a new core HCM tool, implementing a centralized SSC, or redesigning a performance management process, invariably impact different segments of people within the organization. To ensure the success of an HR transformation, it is vital for organizations to bring all segments of individuals (and groups) along on this journey.

Change management: the critical enabler

Change management is the process by which organizations empower individuals to achieve desired results and outcomes during times of change. By integrating change as a strategic capability, leaders cultivate agility and build a solid foundation for transformation success. 

Three key pillars illustrate how leveraging change management can ensure a successful HR operating model transformation:

  1. Understanding the WHY 

    The foundation of change management in large HR transformations begins with building the case for change. This is more than just articulating the reason for the change. It is ensuring that it is understood throughout the organization. This can be done by providing the answers to the fundamental questions of why, what and who?
    Building the why starts firstly with understanding the purpose of the transformation: why are we doing this and what are we trying to achieve through the HR transformation? The answer to this question becomes the vision for the HR transformation and the basis for measuring the success along the way. 
    Secondly, it is necessary to clearly define what will change. Any change can be daunting for people, so the natural question coming to mind is: what will it mean for me? Defining what will (and what will not) change will help people understand how it impacted them.
    Thirdly, mapping out who will be impacted by the change helps to carefully tailor change management plans to meet the needs of individuals and groups within the organization and forms the basis for future communication and training plans. 

  2.  Bringing training to life

    Change management strategies almost always include training as a form of communicating the new ways of working and preparing the organization for the change. Often these sessions are positioned from the technology element i.e. how to operate the new tool. To create a picture of holistic change it is necessary to ensure that the training includes ways of working, process flows and who does what, as well as how to use the technology as a means to the new end. This helps people to truly understand and appreciate what the change will mean for them in the future. Often, training sessions are planned and divided by role, with employees for instance attending one set of training sessions, managers another and HR users attending their own session. Training new ways of working in isolation only perpetuates silo thinking within the organization and misses the opportunity to bring people together in the change. The use of “dress rehearsals” in training sessions allows people to act as themselves in the landscape of tomorrow – this helps them experience what it feels like in the new ways of working, what their role is and how this fits into the bigger picture. The “dress rehearsal” provides the opportunity for the teams to appreciate the new flow of work, the required inputs and outputs and to quickly identify any possible misunderstandings or inefficiencies in the design from a practical perspective.  It makes the change real for people and supports readiness as implementation approaches. 

  3. Measuring progress and remaining agile

    Developing a transformation plan integrated with measurable Key Performance Indicators (KPIs) is essential to change management practices. KPIs should be both qualitative and quantitative to effectively track progress and may include:

    o Employee engagement measures – employee survey results on areas of change and staff turnover metrics
    o System adoption rates – who is using the system as well as for what and when
    o Process efficiencies – the improvement in cycle times and reduction in manual work
    o Cost savings – the impact on the bottom line and in turn the business performance

    These measurable KPIs provide tangible insights, support informed decision-making and serve as a means to demonstrate the value the HR transformation brings to the organization. They allow for celebration of successes along the way and the ability to identify early if desired results are not being achieved.  Regular reviews of the transformation success ensure ongoing alignment with organizational goals and the ability to adapt to changing circumstances. This agility enables swift course corrections, leveraging change management to optimize HR transformation strategies in real-time, better suiting the evolving business needs of the organization.

Conclusion: Embracing Change for HR Transformation Success

In summary, transforming the HR operating model within organizations is essential to aligning HR practices with the ever-changing business needs. To maximize the success of HR operating model transformations, organizations should: 

1. Ensure the purpose of the HR transformation is both clearly articulated and understood
2. Make the change practical for all parties involved 
3. Track progress with measurable metrics

By acknowledging and investing in these success factors, organizations can drive a successful HR transformation by walking the journey with their employees and leaders.

Portrait of Thomas Oschlisniok
Thomas Oschlisniok

Partner, Head of Business Services Transformation

KPMG Switzerland

Blog author Julie Currie
Julie Currie

Expert,Business Services Transformation

KPMG Switzerland