Operational context
In 2018, Homebase was acquired by Hilco Capital, following several changes of ownership since 2016. Although the business had changed considerably since 2016, the HR function had remained largely the same. This prompted a review and transformation of the function in 2020, in order to move to a leaner HR model during the COVID-19 pandemic, and to ensure it was set up optimally to support the business.
“The business had evolved a lot over the previous year or two under a change of ownership, and there was opportunity for the HR team to evolve again and become more aligned to where we were and where we were heading.” Sam Culver, former HR and Change Director
Drivers for transforming the HR model
Before the transformation, the HR function consisted of two HR directors aligned to different areas of the business, each with their own people teams (see Figure 2). At times, this led to a lack of cohesion between the two separate functions, with each supporting different priorities, as well as variations in processes, blurred lines of responsibility and duplication of effort.
In addition, the HR business partners (HRBPs) spent a lot of time supporting managers with operational issues such as employee relations casework, rather than focusing on strategic activity. As Lorraine Bray-Cotton, People Change Partner, points out: “This may have had immediate results but doesn’t always drive performance of the longer-term people strategy.”
What they did
The aim
The transformation began in April 2020, with the aims of:
- aligning the function with the business’s lean operating model
- achieving greater process efficiencies
- redefining the HR business partner role to focus on strategic, value-add activity.
Sam Culver summarises the desired lean HR operating model as moving from a “high operational support HRBP model to a lean operational support HRBP model, equipping managers and then holding them to account for people management.”
The transformation was led internally by the HR director at the time, implementing a fast-paced model with a high level of change. Lorraine Bray-Cotton explains that this decision was further influenced by the COVID-19 pandemic, where “everyone had to work differently anyway.”
“The conclusion was that, rather than slowly edge towards that model over a few different changes, we should jump to it, be brave.” Sam Culver, HR and Change Director.
Changes made
To move to the lean, future-ready model, the following changes to the function were implemented in July 2020.
- A new ‘HR and change director’ role was created: The two director roles were merged with another, which enabled alignment and consistency across the function, brought a focus on future strategy and provided cost savings as three roles transitioned into one.
- The HRBP role became more strategy-focused: By comparing the desired work content of the HRBPs with the current work content, operational work was removed from the role, enabling a reduction in headcount from eight to two. Selection for these roles was based on the skills required for the new, redefined HRBP role.
- Frontline advice and employee relations support for line managers was outsourced: This enabled the new low operational support HRBP model, but also ensured that line managers had the necessary support to effectively manage queries and people issues themselves. Outsourcing this support was more cost-effective and provided a better system to manage employee relations (ER) casework and host policies and associated documents.
- The HR administration team was relocated to the finance department and merged with the payroll team: Putting transactional work in the same process flow and teams with similar skillsets together helped achieve greater efficiencies.
Enablers
There were several key enablers to ensure the model was implemented and embedded effectively:
- Having explicit and repeated communications around the changes and implications for both the team and the people they support: This has ensured that each team focuses on the activity where they add value, without straying into other areas, even if requested to by the business. This communication has provided the HR team with the language to push back on such requests whilst maintaining effective working relationships with line managers.
- Having an effective working relationship with the outsourcing provider: This has been achieved through both the initial contracting process and ongoing relationship building. A rigorous and comprehensive contract was put in place at the start, stipulating key performance indictors and service level agreements.
- Ensuring uptake of the outsourced support from line managers: This was achieved through focused communications on what it is and how to use it and championing the platform with senior leaders so they could in turn champion it with their own teams. This is an ongoing transition and a continued area of focus. Monthly usage reports highlights areas of low activity, so the people team can take a targeted approach with managers to discuss how to engage with the support service.
Challenge areas
Despite the success of the model, a challenge has been ensuring that the HR administration team feels connected to, and part of, the HR function and still has opportunities to develop. To help achieve this:
- the HR administration manager attends monthly HR manager meetings
- the HR administration team is involved in policy and process changes to ensure they understand the context
- the team has been given development opportunities through project work.
It’s been successful in helping the team connect, appreciate the work of both sides and have opportunities for learning. Several members of the team have progressed into HR roles, both externally and internally.
Outcomes
The function’s People Plan is key to assessing the effectiveness of the operating model. This is regularly reviewed to see if the operating model enables or inhibits it, informing any required adaptations. In addition, the team tracks key people metrics using a dashboard to understand if they’re moving in the right direction. Additional insight comes from exit interviews and feedback from managers.
Success metrics include the following:
- A 3% increase in engagement survey scores, despite difficult macro pressures on retail.
- Increased scores relating to having the 'relevant tools for the job'. Whilst the 4% increase can’t be wholly attributed to how the people team are partnering with the business and offering support via the ER outsourcing, it is part of this.
- Increased retention rates.
- A 60% increase in managers taking performance action, often resulting in performance improvement.
- A 30% reduction in short- and long-term absence since 2020.
The HR business partners are now working at a strategic level and delivering value-add activity for the business. They now act as ‘thought partners’ for the business’s senior leadership team, and can deliver more effective solutions and support. For example, they have been able to identify and provide insight about skills gaps, which has enabled the L&D team to deliver more effective, tailored development solutions. Lorraine Bray-Cotton explains that: “We’re no longer playing catch up; we’re more frequently part of the [strategic] conversation from the outset.”
Key outcomes of outsourcing the firstline advice for managers include:
- a reduction of complex ER cases
- a reduction in unresolved in-house ER cases
- high (and increasing) use of the service, with an average of three contacts to support each team member
- early support for ER cases to prevent them escalating to critical issues.
Key benefits from merging the HR administration team with the payroll team include:
- simplification of workflow and increased efficiency by reducing handoff points
- better management of workloads and ability to flex team members based on peaks and troughs in different work areas.
Continuous review and improvement
The team regularly consults with the business and reviews the model, making smaller adjustments in response to changing business needs and priorities. As Sam Culver explains, “The new model might work well now but you can’t assume that will always be the case.”
Recent changes include the following:
- The number of HRBPs has increased from two to three, responding to business needs.
- The ‘Reward and benefits’ and ‘Employee engagement’ functions have merged to focus on driving manager capability. This has meant reinvesting the headcount in an additional junior HRBP role to drive performance.
- Data analytics has been removed from the HRBP role and instead draws on the expertise of the data analytics team in the finance function.
- The business case of managing ER cases in-house versus retaining the outsourcing model is being reviewed to assess effectiveness.
Top tips for a successful transformation
- Make sure your transformation is business-led: The HR operating model has to be right for the business and should support the organisation to achieve its strategic objectives. Consultation with the business is also critical for continuous improvement to ensure any evolutions of the HR model are aligned with business needs.
- Prioritise buy-in from the business: Transformation means things will feel different for both the people team and the business. Buy-in will help you stay on track when things get bumpy and will help prevent a knee-jerk reaction to revert to previous practices.
- Be explicit about the implications: Clearly articulate what’s changing, who will be responsible for what and why. And be prepared to repeat it. This will help embed new ways of working and empower your teams to say no to work that isn’t in their remit.
- Focus on simplification and user experience: Making people tasks and processes easy for managers to execute removes the need for HR support, giving you space and permission to focus on value-add activities.
- Don’t stop; keep iterating: Continually review what’s working and what isn’t and adapt as needed. Standing still will only mean there’s a need for further large-scale transformation and disruption in the future.
