In today’s fast-changing business environment, Human Resources faces unprecedented challenges that require a new operating model. Companies are grappling with a slow-growth economy, a long-term labor shortage, and accelerated industry transformation. To address these challenges, HR needs to adopt a new approach that we can call “Systemic HR” – an operating system that looks at all organizational changes in an integrated, systemic way. In this article, we’ll explore the key characteristics of Systemic HR and how it can help organizations thrive in the face of change.

Slower Growth, Labor Shortage

The slow economic growth coupled with a long-term labor shortage presents a significant challenge for HR. With record low unemployment rates, more than 11 million jobs open, and a 2:1 ratio of jobs to job seekers, finding and retaining talent is becoming increasingly difficult. Additionally, factors such as the aging workforce, a declining fertility rate, and the rise of the contingent workforce further complicate the issue. As a result, companies are struggling to fill key positions, and those that do manage to hire are often forced to offer higher salaries and better benefits to attract and retain employees.

Accelerated Industry Transformation

The pace of change in business has quickened, and companies are facing significant pressure to adapt and transform their operations to keep up with the competition. According to a PWC CEO survey, 40% of CEOs believe that their company as it exists today will not be in business ten years from now, and almost 60% believe that they should be spending more time on transformation than on execution. This means that companies need to be able to quickly and effectively adapt to changing market conditions, which in turn requires HR to be able to identify the skills and talent needed to drive transformation and ensure that they are developed and nurtured within the organization.

The Need for Systemic HR

These challenges have led to the need for a new operating model for HR, one that is designed to address the systemic issues facing businesses today. Systemic HR is an operating system that focuses on the entire organizational ecosystem, including culture, leadership, talent, skills, and systems. By taking an integrated and systemic approach, HR can help to ensure that the organization is able to quickly adapt to changing market conditions and build a sustainable competitive advantage. This requires HR to move away from traditional siloed approaches to talent management and adopt a more integrated approach that considers the entire employee experience, from recruitment and onboarding to career development and retention.

Overview of Systemic HR and Its Benefits for Organizations

Systemic HR is a new operating model for Human Resources that takes a holistic and integrated approach to organizational design and development. This approach emphasizes the interconnectivity of all aspects of HR, from talent acquisition and management to learning and development, compensation and benefits, and employee engagement. By adopting Systemic HR, organizations can address the challenges outlined above and reap numerous benefits, including:

  1. Improved Talent Retention and Attraction
  2. Increased Agility and Adaptability
  3. Better Business Alignment
  4. Enhanced Employee Experience

Let’s delve deeper into each of these benefits below.

Improved Talent Retention and Attraction

Systemic HR emphasizes the importance of creating a positive employee experience and building a culture of continuous learning and development. By doing so, organizations can increase employee engagement and satisfaction, which in turn can lead to better talent retention and attraction. Systemic HR also recognizes the importance of fair compensation and benefits packages, which can help attract and retain top talent.

Increased Agility and Adaptability Systemic

HR enables organizations to be more agile and adaptable in response to changing business environments. By taking a systemic approach to HR, organizations can identify and address talent gaps, facilitate cross-functional collaboration, and build a culture of innovation and agility. This can help organizations respond quickly to emerging trends and opportunities, enabling them to stay ahead of the competition.

Better Business Alignment Systemic

HR helps organizations align their HR strategies with their overall business objectives. By taking a holistic approach to organizational design and development, Systemic HR ensures that HR strategies are aligned with the company’s mission, vision, and values. This can help HR leaders make better decisions and develop HR programs that support the organization’s overall goals.

Enhanced Employee Experience Systemic

HR prioritizes the employee experience, recognizing that engaged and satisfied employees are more productive and more likely to stay with the organization. By taking a systemic approach to HR, organizations can create a positive employee experience by providing opportunities for learning and development, offering fair compensation and benefits packages, and fostering a culture of inclusivity and belonging.

Overall, by adopting Systemic HR, organizations can build a more agile, adaptive, and resilient workforce that is better equipped to navigate today’s rapidly changing business landscape.

Here is a step-by-step guide for HR teams to implement systemic HR:

  1. Start with an assessment: Before you can implement systemic HR, you need to understand where your HR organization stands today. Conduct a thorough assessment of your current HR operating model, including HR processes, systems, capabilities, and culture. Identify the strengths and weaknesses of your current HR model and where you need to improve.
  2. Define your vision: Once you have assessed your current state, you need to define your future state. Develop a clear vision for what you want your HR operating model to look like, based on the key principles of systemic HR outlined above. This vision should align with your overall business strategy and goals.
  3. Develop a roadmap: Create a detailed roadmap for how you will get from your current state to your desired future state. This roadmap should include specific actions, milestones, and timelines, as well as resource requirements and budget considerations.
  4. Engage stakeholders: Engage key stakeholders across the organization in the development of your new HR operating model. This includes executives, line managers, employees, and external partners. Seek their input and feedback, and communicate the benefits and rationale for the changes you are proposing.
  5. Redesign HR processes: To enable systemic HR, you will need to redesign your HR processes to be more integrated, agile, and focused on outcomes. This includes recruitment, onboarding, performance management, career development, succession planning, compensation, and employee engagement.
  6. Upgrade HR systems: To support your new HR operating model, you will need to upgrade your HR systems to be more integrated, flexible, and data-driven. This includes HR information systems, talent management systems, and learning and development platforms.
  7. Develop HR capabilities: To implement systemic HR, you will need to develop new capabilities within your HR team. This includes skills such as change management, agile methodology, data analytics, and employee experience design. Consider training, coaching, and hiring new talent to fill any gaps.
  8. Foster a culture of continuous improvement: To sustain systemic HR, you need to foster a culture of continuous improvement within your HR organization. This means encouraging experimentation, learning from failures, and iterating on your processes, systems, and capabilities over time.
  9. Measure and report progress: To ensure you are making progress toward your goals, establish metrics and KPIs to track your success. This includes metrics related to employee engagement, retention, productivity, and business outcomes. Report progress regularly to your stakeholders and adjust your plans as needed.

By following these steps, HR teams can implement systemic HR and help their organizations navigate the challenges of today’s rapidly changing business landscape.

In conclusion, implementing a systemic HR approach can be a game changer for organizations facing the challenges of a slow-growth economy and accelerated industry transformation. By focusing on developing and managing skills, investing in employee development and engagement, and approaching organizational changes in a holistic way, organizations can position themselves for success in the long term. While it may require significant effort and investment upfront, the potential benefits for both employees and the organization make it a worthwhile pursuit. As the world of work continues to evolve, adopting a systemic HR approach can help organizations stay ahead of the curve and remain competitive in the years to come.

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