Survey report September 2007

The changing HR
function
Contents

Summary of key findings 2

Introduction 4

Restructuring the HR function 5

Benefits and challenges of HR structures 10

Roles and responsibilities of HR 15

HR skills and careers 24

Conclusions 26

Background 27

Acknowledgements 28

References 28

The changing HR function 

Summary of key findings

• Fifty-three per cent of organisations have restructured of centres of expertise were identified, the most
their HR function in the last year and 81% have done common being deeper professional knowledge.
so in the last five years. By far the most common Other commonly perceived benefits are in the
reason for restructuring was to enable the HR consistency of HR advice, the quality of advice
function to become a more strategic contributor. given to HR partners and making the function a
• Three out of ten respondents whose HR function more strategic contributor.
has been restructured say that it now reflects the • In general, the most common difficulties
three-legged ‘Ulrich model’ and a further 28% say encountered in restructuring the HR function are
that this is partially true. However, only 18% of HR in defining new roles (42%), having insufficient
functions actually had in place all three elements resources (40%), dealing with skills gaps (38%),
of this model (shared services, business partners having ineffective technology (35%) and resistance
and centres of expertise). Among HR functions to change within HR (23%). Respondents also
that were said not to reflect the ‘Ulrich model’, report on specific challenges in implementing each
by far the most common structure is a single HR element of the so-called ‘Ulrich model’.
team incorporating generalists, specialists and • When asked about the main objectives of the HR
administration. function, recruitment and retention was given
• Centralised provision of HR administrative services as the highest priority, followed by developing
exist in 28% of organisations responding to the competencies and maximising employee
survey. Over two-thirds of these organisations involvement and engagement. Meeting business
currently deliver their shared services wholly in­ strategy or goals is the most important driver of
house and a quarter partially outsource. A range of future people management policies and practices.
benefits are identified in having shared services, the • The HR function has over the last three years
most common of which are repositioning the HR doubled the proportion of time it spends on
function, making it a more strategic contributor, strategic inputs, at the expense of administrative
helping focus HR work on more value-added activities. Further movement in the same direction
services and improving HR service quality. is expected over the next three years. However,
• HR business partners are present in 38% of though developing HR strategy and policy and
organisations. A number of benefits were observed contributing to business strategy are the most
in having business partners, the most common important tasks for respondents, providing support
of which is that HR is becoming a more strategic to line managers and HR administration are their
contributor. Other common benefits are that HR is most time-consuming tasks.
more business-focused, people management issues • Areas of devolution of people management
are given more importance and the HR function activities are largely unchanged from the
has improved its credibility. CIPD’s 2003 survey. HR still takes the lead on
• Centres of expertise are found in 29% of remuneration and implementing redundancies; the
respondent organisations. The most common line has prime responsibility for work organisation;
expertise areas are training and development while for a third group (recruitment, employee
(79%), recruitment (67%), reward (60%) and relations, and training and development) matters
employee relations (55%). A range of benefits are more shared.

 The changing HR function

• Three-quarters of survey respondents would like to
go further in the transfer of people management
responsibilities to the line. It seems obstacles to
progress appear to be line manager priorities,
their skills, the time available to them for people
management tasks and poor manager self-service.
• Virtually all the survey organisations measure HR’s
efficiency and over half examine HR effectiveness
through people management practice and its effect
on outcomes such as absence.
• With respect to the competencies of HR staff, the
biggest challenges that lie ahead are considered
to be in developing influencing skills and strategic
thinking. Business knowledge, leadership skills,
willingness to innovate and, to a lesser extent,
being able to deliver against targets are also
commonly noted to be a challenge.
• The overall impression from the survey is that
structural change has had little impact on
development upwards or sideways, or in joining
the function. Two-thirds of our survey respondents
say that the changes give more opportunity to staff
compared with only 17% who think that it‘s harder
to develop people into new roles.
• To deal with skills gaps the emphasis is on more
formal types of learning. Nearly three-quarters of
respondents choose external courses, followed by
CIPD study (57%) and half select internal events
and external conferences as the main means to
close skills gaps.

The changing HR function 

Introduction

This report presents the findings of a survey

commissioned by the CIPD as the third phase of its
major two-year research study, ‘The Changing HR
Function’. The survey builds on the work of the first
two stages, a review of existing knowledge and
research and a series of qualitative case studies.
The aim of the survey is to examine how HR functions
across the spectrum of size and sector are meeting the
challenges of structure, role, skills and relationships.
Particular attention is given to the extent to which HR
functions have adopted the so-called ‘three-legged’
model developed from Ulrich’s work, which
incorporates centres of expertise, shared services and
business partners.

This is a companion to the main Research into Practice

report, The changing HR function: transforming HR?
(CIPD 2007), and follows the Phase One report, The
changing HR function: the key questions (CIPD 2006).

 The changing HR function

Restructuring the HR function

The great majority of respondents (81% of the 787) more strategic contributor, this being indicated by 54%
report that their HR function has changed its structure of respondents whose organisations have changed
in the last five years, with just over half of these (53%) their structures in the last five years.
having done so in the last year. This section focuses on
the structures that have been adopted, in particular in Somewhat less prevalent, but nonetheless common,
relation to the three-legged ‘Ulrich model’. We also drivers are a need to improve services (34%), increased
discuss the main drivers for restructuring the HR business focus (30%) and cost reduction (29%).
function, the size of the HR function and what benefits Closely following these reasons are a need to fit the
and challenges respondents identified in the various wider organisational model and repositioning the HR
elements of the ‘Ulrich model’. The section finishes function (24%) and a need for a more responsive
with some key lessons that respondents feel they have customer service (23%).
learned from the restructuring process.
The 41 individual responses citing ‘other’ reasons for
The roles and responsibilities of the HR function, restructuring the HR function include mergers, business
including the extent to which HR-related activities were growth, reductions and increases in workforces and a
devolved to line management, and the impact change of HR director or other senior personnel.
restructuring the function has had on careers in HR are
discussed separately (see pages 15 and 24). Size of the HR function
The average (median) size of the HR function is 10
Drivers for change in structure staff, with a third (32%) comprising 1 to 5 staff, and
Respondents cite a range of drivers for changing the half (51%) between 6 and 50. Eight per cent have over
structure of HR. Among these, by far the most 100 staff in their HR functions and the highest number
common reason given is to enable HR to become a recorded is 3,000 (see Figure 1).

Figure 1: Number of people employed in your HR function

35
32
30
Percentage of respondents

25

20 18
17
16
15

10 8 8

5
0
0
0 1–5 6–10 11–20 21–50 51–100 101+

Number of staff in HR

The changing HR function 

Respondents were asked how the number of staff in Adoption of the ‘Ulrich model’
their HR function has changed in the last three years (see Adoption of the three elements
Table 1). Overall, the most common increase is in the Respondents were asked whether their HR function
number of mid-level managers, professionals or technical has introduced the three commonly recognised aspects
specialists (45% of organisations). The most common of the ‘Ulrich model’ (or three ‘legs of the stool’),
numerical decrease is in administrators and junior staff, namely centralised provision of shared administrative
which has occurred in a third (31%) of organisations. In services (shared services), business partners and centres
just over half of organisations (55%), the number of of expertise.
senior HR managers has stayed the same.
A total of 219 respondents report that their
These figures are similar for public and private sector organisations have introduced centralised provision of
organisations, although there are the following notable shared administrative HR services. This represents 28%
differences: more private sector organisations have of all organisations and 35% of those organisations
increased the number of senior HR managers than with new HR structures. At the time, over two-thirds
public sector organisations (35% versus 29%); (69%) of organisations that have shared services
reduction of mid-level managers is slightly more deliver them wholly in-house; just over a quarter
common in the private sector than public (17% versus (28%) partially outsource their shared services; and
13%); and in the private sector there is more growth, 4% wholly outsource them (see Figure 3). However, a
and in the public sector more reductions, in the number general shift towards greater outsourcing of shared
of administrative and junior staff in organisations. services in HR is anticipated. Eleven per cent of

Table 1: Changes in the size of the HR function over the previous three years (row percentages)
%
Stayed the
Grown same Reduced Base
Senior managers 32 55 13 745
Mid-level managers 45 41 15 730
Administrative/junior staff 32 37 31 733

Figure 2: Percentage of all organisations that have implemented the three legs of the ‘Ulrich model’

40 38

35

28
Percentage of respondents

30 28

25

20

15

10

0
Shared services Business partners Centres of expertise

Implemented element of ‘Ulrich’

Base: 776

 The changing HR function

 Figure 3: How are shared services delivered now?
Shared services now
4%

28%
Wholly in-house

Partially outsourced
69%
Wholly outsourced

Base: 214

Shared services in 3 years

11%

42% Wholly in-house

47% Partially outsourced

Wholly outsourced

Base: 214

respondents expect that these will be wholly Twenty-nine per cent of all organisations (36% of
outsourced in three years’ time, 47% expect them to those with new HR structures) have implemented
be partially outsourced and 42% expect them to be centres of expertise. These exist for a range of areas
wholly in-house. that vary by organisation (see Figure 4). However, the

Figure 4: Subject with their own centres of expertise as a percentage of organisations with centres of expertise

Reward 60

Recruitment 67

Organisational development 43

Employee relations 55

Talent management 36

Health/welfare 32

Communications 26

Training/development 79

Management information 30

Social responsibility 8

0 20 40 60 80 100
Percentage of respondents
Base: 229

The changing HR function 

great majority of organisations with centres of However, although 29% claim that their HR function
expertise have them for training and development has been restructured to reflect the ‘Ulrich model’,
(79%). Other common areas include recruitment (67% cross-tabulating the results to the individual questions
of organisations with centres of expertise), reward on shared services, business partners and centres of
(60%) and employee relations (55%). expertise shows that, in fact, only 18% of
respondents’ organisations had all three ‘legs of the
Thirty-eight per cent of organisations (46% of those stool’ (see Table 2). This is interesting, not least
with new HR structures) report that their organisations because the phrase the ‘Ulrich model’ carries a great
have introduced HR business partners. deal of currency in HR circles. One can speculate as to
the reasons why respondents report that their
There are moderate correlations between the organisations have implemented the three-legged
implementation of these three aspects of the model, ‘Ulrich model’ when in fact they don’t have all three
suggesting that these changes are often implemented components; nonetheless, this finding certainly
more or less in conjunction, as a general shift towards reinforces the impression that the pure model is not as
the ‘Ulrich model’. common as the publicity that surrounds it suggests.

Perceptions of the ‘Ulrich model’ Adoption of other models of the HR function

As well as being asked which elements of the ‘Ulrich Among organisations that have a new HR structure
model’ have been introduced, respondents whose but have not adopted the ‘Ulrich model’, two-thirds
organisations have restructured their HR functions (66%) have single HR teams with generalists,
were more generally asked whether these reflected specialists and administration together. A further 15%
‘the so-called Ulrich model’. Almost 3 in 10 (29%) say have corporate HR strategy teams with operational
that this is the case; 28% that it is partially so; and teams aligned to business units; 12% have corporate
two-fifths (41%) of respondents report that this is not strategy teams with operational teams aligned by
the case. location; and 5% have a set of centrally provided
specialist services supporting business unit HR teams
(see Figure 5).

Table 2: Implementation of the three legs of the ‘Ulrich model’

Shared services Business partners Centres of expertise %

3 3 3 18
3 3 7 7
3 7 3 4
3 7 7 6
7 3 3 7
7 3 7 15
7 7 3 8
7 7 7 36
Total 00
Base: 625

 The changing HR function

Figure 5: Structures of the HR function other than the ‘Ulrich model’

5%
5%
Single HR team
12%
Corporate HR team aligned to business units

Corporate HR strategy team aligned by location

15% 67%
Set of HR specialist services

Other

The changing HR function 

Benefits and challenges of HR
structures

This section describes the benefits and challenges that by a quarter of the respondents who noted
respondents associate with introducing different HR challenges (see Figure 6).
structures, in particular shared services, business
partners and centres of expertise. Shared services
Benefits
Although a number of respondents feel that the HR Respondents whose organisations have shared services
functions are too early in the process of change to see were asked whether its introduction has resulted in ‘no
any benefits, many are able to identify both benefits of change’, ‘some change’ or ‘major change’ in a range of
introducing the three elements of the ‘Ulrich model’ relevant areas (see Table 3). It was most commonly
and problems associated with doing so. noted that ‘some change’ has been achieved, with
between 45% and 60% of respondents selecting this
General challenges in implementing changes option for each question. Overall, there is some degree,
Respondents were asked about general challenges but not a great deal, of variance between the responses,
they have experienced in implementing changes to average (mean) scores ranging from 0.8 to 1.2 (where
the structure of the HR function. The most common 0=no change, 1=some change and 2=major change).
problems cited were defining new roles (42% of
those who noted challenges), having insufficient Nonetheless, some benefits are seen to be greater than
resources (40%), dealing with skills gaps (38%) and others. In particular, a third of respondents (34%) note
having ineffective technology (35%). Resistance to major change in repositioning the HR function, with
change in HR is also relatively common, being cited only 18% noting no change. The extent to which HR

Figure 6: Challenges faced in implementing changes

Defining roles 42

Resistance to change in technology 23

Ineffective technology 35

Insufficient resources 40

Inadequate consultancy 3

Dealing with skills gaps 38

Objections from line manager customers 16

Ineffective process change 17

Recruitment difficulties 13

Other 6

0 10 20 30 40 50
Percentage of respondents with restructured HR function
Base: 614

0 The changing HR function

 Table 3: Observed benefits of shared services
%
Benefits No change Some change Major change Base
Cost reduction 27 60 13 195
Improvement in service quality 14 57 29 192
More responsive customer service 21 49 30 192
More commercial approach to HR 24 52 25 191
Improving credibility of function 25 45 31 191
Repositioning HR 18 48 34 191
HR more strategic 19 50 31 193
More satisfied HR staff 38 45 17 192
HR time shifted to value-added services 16 59 25 190

has become a more strategic contributor, which as improvement in the credibility of the HR function,
noted above is the most common driver for change, there is greater variance of opinion. Here, a third of
is also fairly marked – half of respondents noting some respondents (34%) note major change and a quarter
change and 31% noting major change. note no change.

There are also some benefits that are generally seen to The benefits to cost reduction are also relatively small,
be less marked than others. Especially muted is the only 13% noting major change and over a quarter
increase in satisfaction among HR staff, in which two- (27%) noting no change.
fifths (38%) of respondents note no change and only 1
in 6 (17%) note major change. It is likely that this Challenges
finding partially reflects a time lag from the By far the most common problem encountered in
implementation of changes to effects on staff introducing shared services is boundary disputes (Figure
satisfaction. In another long-term factor, namely 7) between parts of HR, as recognised by 56% of

Figure 7: Percentage of respondents with shared services encountering problems

Customer complaints 35

HR staff objections to structure 34

Poor learning within shared services 19

Boundary disputes 56

Gaps in service provision 41

Ineffective escalation procedures 14

Blocks to development of HR career 30

HR communication difficulties 36

Expected savings not achieved 26

None 13

0 10 20 30 40 50 60
Percentage of respondents
Base: 614

The changing HR function 

respondents. This is followed by the related issue of Benefits are also seen in staff engagement and
gaps appearing in service provision, which is recognised performance outcomes. Three-fifths (61%) of
by two-fifths of respondents (41%). Other common respondents whose organisations have introduced HR
difficulties are communication problems within HR business partners observe that it has led to greater line
(36% of respondents), customer complaints over the engagement, two-fifths (40%) that it has led to
service (35%) and existing HR staff objecting to a improvements in service quality and half (51%) that it
service centre structure (34%). has led to increased customer satisfaction.

Business partners Challenges

Benefits The most common challenges experienced in
Overall, the introduction of HR business partners is seen implementing business partners generally relate to
to have a number of benefits for the organisation. The developing the role appropriately. Half (49%) of
most common benefit is that HR is becoming a more respondents whose organisations have introduced HR
strategic contributor, which was observed by three- business partners agree that they have been drawn into
quarters (76%) of respondents whose organisations activities that are not relevant to the role (‘going native’);
have introduced HR business partners (Figure 8). just under half (46%) recognise that there has been
tension between responding to corporate and business
This is an important finding, as this factor was identified unit needs; and two-fifths (40%) cite the failure to be
as the most common key driver for change (see page strategic as a problem. A quarter think that the business
5). Further, it is supported by the fact that the majority partner role is or has been unclearly defined (Figure 9).
of respondents recognise that the introduction of
business partners has led to an increased business focus Centres of expertise
(69% of respondents), put people management issues Benefits
higher up the agenda (60%) and improved the As one would hope, a clear majority (69%, or seven
credibility of the function (58%). About half of out of ten) of respondents whose organisations have
respondents (53%) agree that HR business partners implemented centres of expertise think that the depth
have helped reposition the function. of professional experience has been increased as a

Figure 8: Percentage of respondents with business partners experiencing benefits

HR becoming more strategic contributor 76

Increased customer satisfaction 51

Greater line engagement 61

Repositioning of HR function 53

Improvement in service quality 40

Improving credibility of function 58

Increased business focus 69

People management issue higher up agenda 60

Cost reduction 7

None 1

0 20 40 60 80 100
Percentage of respondents
Base: 291

 The changing HR function

result. More specifically, nearly half (47%) think that Marked improvements are also evidenced in the

there is better awareness of external good HR practice dissemination of this expertise through advisory services.

(Figure 10). In particular, over half (54%) of respondents cite

Figure 9: Percentage of respondents with business partners encountering problems

Unclear role 25

Failure to be strategic 40

Tensions between corporate and business levels 46

Failing to act as a service lead 13

Behavioural skill deficiencies 32

Inadequate knowledge 12

Getting drawn into wrong activities 49

Customer resistance 21

Difficulties in finding right staff 41

Coping with employee demands 18

0 10 20 30 40 50
Percentage of respondents
Base: 271

Figure 10: Percentage of respondents with centres of expertise experiencing benefits

Deeper professional expertise 69

Higher quality of advice to HR partners 54

Higher quality of advice to executive committee 42

Greater consistency of advice 51

HR becomes more strategic contributor 56

Repositioning HR function 38

More responsive customer service 30

Better awareness of good practice 47

Higher quality of advice to line managers 47

Improved handling of call centre referrals 3

Cost reduction 11

Credibility of function improved 44

Improvement in service quality 36

None

Other 4

0 10 20 30 40 50 60 70
Percentage of respondents
Base: 227

The changing HR function 

benefits in the quality of advice given to HR partners Challenges
and half (51%) note that, overall, there is greater The problems most commonly associated with
consistency of advice. Substantial proportions of introducing centres of expertise are difficulties in
respondents also note higher-quality advice to line separating out transactional work (cited by 46% of
managers (47%) and executive committees (42%). respondents whose organisations have shared services)
and communication with the rest of the function (34%).
Interestingly, however, a more commonly noted benefit Other common problems include recruiting appropriately
of introducing centres of expertise is that they help HR skilled staff (30% of respondents) and staff having a
become a more strategic contributor (noted by 56% of poor grasp of business issues (28%) and deficiencies in
respondents). Their role may thus be particularly their professional skills (21%) (Figure 11).
important in supporting HR business partners.

Figure 11: Percentage of respondents with centres of expertise encountering problems

Over elaborating services 12

Insufficiently tailored advice 16

Too much time spent on problems 17

Not aware of external good practice 13

Professional skills deficiencies 21

Poor grasp of business issues 28

Gives inappropriate advice to line managers 4

Difficulty in developing specialist careers 18

Recruitment of high quality staff 30

Communication with rest of function 34

Difficulty in separating out transactional work 46

None 9

Other 7

0 10 20 30 40 50
Percentage of respondents
Base: 215

 The changing HR function

Roles and responsibilities of HR

Purpose and objectives A similar question was asked in 2003. Comparison

Respondents were asked to identify the five main needs to be done with care, as the options offered
objectives of their HR functions. The objective most were somewhat different. Nevertheless, there are some
commonly cited is to recruit and retain key staff, striking differences. In particular, where 16% of the
identified by 7 out of 10 respondents. Following this are sample this year identify cutting costs as one of their
the objectives of developing employee competencies priorities, 55% did so last time. It is possible that this is
(62% of respondents), improving the management of a reflection of a change in the business climate. There
people performance (61%) and maximising employee are also striking reductions in developing employee
involvement and engagement (59%) (Figure 12). competencies/capabilities and focusing employees on
Helping employees focus on key business goals, business goals and customer needs. Recruitment and
changing line management behaviour and securing retention of staff is consistently a key goal, and
compliance with employment relations regulations are employee engagement and legal compliance remain
also common main objectives (respectively cited by 47%, important to roughly three-fifths and a two-fifths of
46% and 39% of respondents). the survey respondents.

Figure 12: Main objectives of the HR function (top five priorities)

Improve employees’ focus on key business goals 47

Develop employee competencies 62

Cut/control costs 16

Recruit and retain key staff 70

Focus employees on customer needs 18

Secure compliance with employment regulations 39

Maximise employee involvement/engagement 59

Create a more diverse workforce 19

Manage major structural change 35

Improve the way in which people performance is managed 61

Manage major cultural change 33

Change line management behaviour 46

Other 3

0 20 40 60 80
Percentage of respondents
Base: 784

The changing HR function 

 Table 4: Expected importance of potential drivers of HR change over the coming three years
%
Not important Important Very important Base
Business strategy 1 11 88 783
Employee needs 5 66 29 778
Changes in product/services 24 52 24 760
Cost pressures 5 48 46 776
Benchmarking against good HR practice 15 62 22 771
Cultural values of organisations 2 39 59 774
Views of senior management 1 44 55 776
Line managers 6 63 31 768
Employment regulation 10 61 29 772
Internal customer pressure 21 64 15 761
HR strategy 5 45 51 770
Globalisation/competitive pressure 30 43 27 759

Future drivers of change many respondents (51% and 46% respectively). Cost
Respondents were asked to rate the importance of a pressure is lower in importance as a driver of future
range of factors as drivers of change in their people change compared with 2003, just as it is less important
management policies and practices over the coming as a current priority. Less than a third of respondents
three years. Each of the 12 factors listed is thought to think that employment regulation would be very
be ‘important’ or ‘very important’ by the majority of important as a change driver. In 2003 the figure was
respondents (between 70% and 99%); but some 57%. Employee needs as a very important contributor to
factors are nonetheless generally considered more HR change also fell from 47% in 2003 to 29% in 2007.
important than others (Table 4).
Using five scales indicating different continuums,
In line with the CIPD’s 2003 survey, by far the most respondents were also asked to describe their vision of
important drivers are business strategy and goals – where they believe the HR function needs to be in the
almost 9 out of 10 respondents (88%) identify them as future compared with its current position. Figure 13
very important drivers for the coming years and only 1% overleaf shows the mean scores of these results.
identify them as unimportant. Also extremely important, Overall, significant shifts are thought necessary for the
and again unchanged from 2003, are the culture and function in all five continuums, towards becoming more
values of the organisation and the views of senior strategic, proactive, tailored, business-driven and
management, with over half of respondents predicting specialist. However, the greatest changes thought to
that they would be very important drivers and only 1% be needed are for the HR function to become more
or 2% considering them unimportant. HR’s own strategy proactive and for it to shift from being generally
and cost pressures are also considered very important by operational to being generally strategic.

 The changing HR function

 Figure 13: Where the HR function is now and where it needs to be in the future (mean scores) 2007

3.2
strategic operational
2.0

3.1
proactive reactive
1.7

2.5
tailored practice off-the-shelf
2.1

2.6
business-driven employee-driven
1.9

3.4
specialist generalist
2.7

1 2 3 4 5
Future Mean score Now

Figure 14: Where the HR function is now and where it needs to be in the future (mean scores) 2003

3.7
strategic operational
3.2

2.5
proactive reactive
3.4

2.7
tailored practice off-the-shelf
2.4

3.1
business-driven employee-driven
1.5

3.2
specialist generalist
1.9

1 2 3 4 5
Future Mean score Now

When comparing these results with 2003, as seen in Activities

Figure 14, they are similar. But two differences can be Respondents were asked to indicate what proportion
picked out. First, is the function becoming more of their time they spend or would spend doing
generalist than in the past, and is this a reflection of the administrative, operational and strategic activities three
growth in business partner roles? Second, the function years ago, at the current time and in three years’ time.
seems to be even more business-driven in its approach, The average scores for these results are presented in
and less employee-driven, than in 2003. Figure 15 overleaf.

The changing HR function 

 Figure 15: Where the HR function is now and where it needs to be in the future (mean scores) 2007

Three years ago

12%

Administrative activities
50%
39% Operational HR

Strategic input

Base: 611

Now

23%
36%
Administrative activities

Operational HR
41% Strategic input

Base: 626

In three years’ time

24%
35% 69%
Administrative activities

Operational HR

41% Strategic input

Base: 607

 The changing HR function

On average, it is estimated that three years ago activities and nearly two-thirds (64%) identify
administrative duties took up half (50%) of developing HR strategy and policy as among the three
respondents’ time. Since then, there has been a marked most important types of task that they undertake. By
drop in this figure to just over a third (36%) and a contrast, only 5% of respondents list administrative
corresponding rise in the proportion of time spent on activities as among the three most important types of
strategic tasks (from 12% to 23%). The proportion of tasks they undertake.
time spent on operational tasks is generally thought to
be similar now to three years previously (up from 39% Within operational activities, the one most commonly
to 41%). recognised to be among the most time-consuming is
providing support to line managers (71% of
Over the coming three years, based on these responses, respondents); by contrast, only a quarter (26%) of
it can be anticipated that the trends in administrative respondents report that supporting employees is among
tasks and strategic input will continue steadily, with the most time-consuming of their activities. This
respondents estimating that the proportion of their time difference is reflected in the importance respondents
spent on administrative activities will go from just over a attach to these activities, with only 1 in 10 (9%) listing
third to a quarter (36% to 24%), and vice versa for the employee support and over a third (37%) listing line
time spent on strategic input (23% to 35%). Overall, manager support as among the most important of their
the proportion of time spent on operational tasks is activities.
expected to remain at two-fifths (41%).
Other operational tasks considered to be among the
In short, there is a clear upward trend in strategic input most time-consuming are implementing HR policies
and a corresponding downward trend in administrative (38% of respondents) and change management (36%).
activities, pointing to a concerted effort to increase the However, while the latter is frequently considered
added value of the HR function. among the most important of respondents’ activities (by
49% of respondents), the former is considered thus by
The shift is also reflected in the importance respondents only one-sixth (16%) of respondents.
attach to their respective activities (Figure 16). Over half
of respondents (58%) identify business strategy The results from the 2003 survey are very similar.

Figure 16: Percentage of respondents listing activity areas as among three most important/most time-consuming

Business strategy 58
14
Implementing HR policies 16
38
64
Developing HR strategy and input 28
49
Providing specialist HR output 30
37
Providing support to line managers 71
9
Helping employees 26
Change management 49 Most important
36
Updating own HR knowledge 9 Most time-consuming
5
5
HR administration 52

0 10 20 30 40 50 60 70 80 90 100
Percentage of respondents
Base: 775

The changing HR function 

Responsibility for HR-related activities implementing redundancies is typically shared or lays
The remits of HR vary to some extent, with substantial primarily with HR. There are particularly low levels of
proportions of the respondents reporting that their HR devolvement to line management in pay and benefits
functions have part or main responsibility for various and the implementation of redundancies, which are
activities other than those typical for HR (see Table 5). managed mainly or entirely by HR in nearly two-thirds
The most common among these is organisational design, of organisations (65% and 62% respectively).
9 out of 10 respondents (89%) indicating that their HR
functions have part or main responsibility for this. On the other hand, the responsibilities for work
A similar proportion (87%) report that their HR functions organisation and for recruitment and selection lie
are involved in managing internal communications. mainly with line managers. In over half of organisations
The HR functions of a third of respondents (35%) take (55%) line managers are mainly or entirely responsible
the lead responsibility for health and safety, with a for work organisation. Recruitment and selection are
further 42% holding joint responsibility. primarily the responsibility of line managers in a fifth
(21%) of organisations and shared between line
The extent to which the allocation of HR-related tasks is managers and HR in a further 55% of cases.
divided between the HR function and line management
varies substantially between respondents. Nonetheless, Table 6 also allows comparison to be made with the
there are some general trends, which can be seen in 2003 survey. As can be seen, there is very little change
Table 6. The responsibility for pay and benefits, in the allocation of responsibilities between HR and the
employee relations, training and development, and line. This is despite HR’s ambition to devolve more.

Table 5: Percentages of HR functions taking responsibility for atypical HR activities

HR responsibility %
Lead Part/joint None Base
Organisational design 22 67 11 771
Facilities management 12 22 66 753
Internal communications 24 63 13 770
Health and safety 35 42 22 771
Corporate social responsibility 14 57 29 761
Corporate branding 4 43 53 759

Table 6: The allocation of responsibility and line management in how decisions are taken

2003 2007
Work area Line/ Mainly Line/ Mainly
mainly line Shared HR/HR mainly line Shared HR/HR
Recruitment/selection 31 52 17 29 55 16
Pay and benefits 8 29 62 7 28 65
Employee relations 8 40 52 6 40 54
Training and development 12 44 43 10 49 42
Implementing redundancies 6 34 59 4 34 62
Work organisation * – – – 54 37 9
* not included in 2003 survey questionnaire

0 The changing HR function

 Figure 17: What has restricted progress in the HR function? (mean scores)

Priorities 1.40

Disposition 1.11

Training 1.11

Time 1.35

Skills 1.31

Restrictive HR processes 0.55

Technology issues
Lack of role clarity 0.70
HR issues
Lack of management encouragement 0.80
to devolve Line manager issues
Reluctance to let go 0.48

Poor employee self-service capability 1.19

Poor manager self-service capability 1.15

0 1 2
Mean scores
0 = not at all 1 = a fair amount 2 = a great deal

Indeed, the great majority (72%) of respondents report Technological limitations are typically acknowledged in
that their line managers currently take less responsibility the self-service capability for both line managers and
for people management than had been intended. The employees, in each case nearly 8 out of 10 respondents
reasons for this are thought to lie particularly with the (78% and 79% respectively) recognising that it restricts
attitudes and abilities of line managers and to a lesser progress ‘a fair amount’ or ‘a great deal’.
degree with technology. Overall, the HR functions
themselves are seen as far less problematic. Performance measurement
Respondents were asked to indicate the ways in which
It is likely that the general thrust of these answers reflects they measure five key aspects of HR performance.
the fact that respondents are themselves HR managers, The results are shown in Figure 18 overleaf. The most
and very different responses may be obtained from line measured aspects are the efficiency and effectiveness
managers themselves. Nonetheless, the results do give an of the HR function, with relatively fewer measurements
indication of the key obstacles to greater devolvement in taken of the quality of the HR service, people
people management from the perspective of senior HR management practice and the impact of the HR
managers. This can be seen in Figure 17. function on organisational performance.

Within line management, particular challenges are Particularly common measurements of the HR function’s
thought to lie with the work priorities and time efficiency are costs, business performance measures,
pressures of line managers, which are cited as restricting outcomes and ratios, each of which is used by half of
progress ‘a great deal’ by 47% and 43% of respondents. Outcomes and business performance
respondents respectively. The skill-sets of line managers measures are also common measurements of the
are also thought to be a significant challenge, with over effectiveness of the HR function, used respectively in
half (55%) reporting that they restrict progress ‘a fair 56% and 50% of cases.
amount’ and a further two-fifths (38%) ‘a great deal’.

The changing HR function 

 Figure 18: Ways in which HR performance is assessed

 The changing HR function

The most common measurement of the quality of HR results don’t show a great deal of variance, with the
services is line manager surveys (used in 53% of cases) majority of cases being rated ‘positive’ or ‘strongly
and hard outcomes, such as absence rates (46%). positive’. In fact, in almost all dimensions, half or more
People management practice is most often measured of respondents think that their CEO would rate them
through outcomes (56% of cases) and employee positively, and between a fifth and a third (21% to
surveys (47%). The impact of HR on organisational 34%) think their CEO would be strongly positive. The
performance is most often monitored through the use exception to this is the quality of HR processes, which is
of business performance measures (60% of cases) and generally rated slightly lower. The mean scores of these
outcomes (55%). results can be seen in Figure 19.

Respondents were asked to rate how they think their Compared with 2003, the results have improved in three
chief executives would score the performance of the HR areas – contribution to business performance, influence
function in a number of different dimensions. The on board decisions and closeness to the business.

Figure 19: How do you think your CEO would score the performance of the HR function? (mean score)

Closeness to business 1.1

Contribution to business performance 1.0

Calibre of people in function 1.0

Influence on board decisions 0.9

Relationship with the line 1.1

Quality of HR processes 0.6

Ability to offer independent perspective 1.2

–2.0 –1.0 0 1.0 2.0

Mean score
–2 = Strongly negative –1 = Negative 0 = Neither positive or negative 1 = Positive 2 = Strongly positive

The changing HR function 

HR skills and careers

Respondents were presented with a list of competencies There are differences in the results between the two
and capabilities and asked to identify which they see as surveys, but similarities too. Given that these are not
the three most important for establishing the credibility matched samples, interpretation should be cautious.
and effectiveness of the HR function. They were then The key changes are that business knowledge is
asked to identify the competencies or capabilities that recognised as more important this year than in the 2003
they think are the most challenging to acquire or survey, and, as to the most challenging, there have been
develop. Table 7 shows the percentages of respondents reversals in the ability to deliver against targets (less
who indicated the various items given. It also compares challenging) and willingness to innovate (more so).
this 2007 survey with the 2003 one where the same
questions were asked. A range of methods are used to address skills gaps
among HR staff, including various modes of study and
The most important competencies are viewed as training, work placements and recruitment (see Figure
strategic thinking (identified by 54% of respondents) 20 overleaf). However, the most commonly used method
and influencing skills (51%). Business knowledge is sending staff on external training courses, reported by
(45%) and the ability to deliver against targets (40%) more than 7 out of 10 respondents (72%). Other
are also commonly rated as among the most common practices are CIPD study (57% of respondents),
important. In general, the competencies identified as and conferences and internal courses (both 52%).
the most important are also identified as the biggest ‘Other’ training and development interventions used
challenges to develop. include coaching and mentoring, job shadowing and job
swaps, networking groups and secondments.

Table 7: Assessment of HR function’s competencies/capabilities (percentage scores)

2003 2007
Most Biggest Most Biggest
important challenge important challenge
(to HR’s (to developing (to HR’s (to developing
Work area effectiveness) these skills) effectiveness) these skills)
Influencing/political skills 61 64 51 58
Understanding of HR practices 26 10 27 8
Empathy/communication/listening skills 24 15 16 8
Leadership ability 35 26 34 34
Strategic thinking 46 48 54 53
Ability to deliver against targets 39 40 40 29
Business knowledge 32 34 49 38
Negotiating skills 11 19 8 11
Integrity 25 5 23 4
Willingness to innovate 13 17 17 34

 The changing HR function

 Figure 20: How are you closing skills gaps in HR?

CIPD study 57

Internal courses 52

External courses 72

Temporary cover 12

Project working in other areas 36

Recruitment 36

External degree level study 13

External conferences 52

Temporary cover 13

Short-term assignments 24

Other 10

0 20 40 60 80 100
Percentage of respondents
Base: 763

Finally, respondents were asked how the changes they’ve has become easier to move between HR roles (31%).
witnessed in the structure of the HR function have Various negative effects were also noted by some
affected careers within HR (see Figure 21). By far the respondents, including that it has become more difficult
most often recognised effect is that it has created more to enter the function and for the function to develop
opportunity (cited by 65% of respondents) and a people, and that HR careers have become more siloed.
substantial proportion of respondents also think that it

Figure 21: How changes in HR structure have affected HR careers

Made it more difficult to develop people 17

Created more opportunity 65

Made it easier to move between HR roles 31

Made it more difficult to develop people into new roles 19

Made it more difficult to enter the function 17

Made mid-career moves easier 21

Made HR careers more siloed 22

Other 4

0 20 40 60 80
Percentage of respondents
Base: 710

The changing HR function 

Conclusions

This report presents the findings of a survey

commissioned by the CIPD as the third phase of its
major two-year research study, ‘The Changing HR
Function’. The findings from this survey report feed into
the final Research into Practice report, The Changing HR
Function: Transforming HR (CIPD 2007). This final report
also includes findings from detailed interviews with
various case-study organisations. As such, the final
report aims to provide practical guidance to
organisations on how best to structure and staff the
function to achieve future success. The Changing HR
Function: Transforming HR? (CIPD 2007) will be available
to purchase from the CIPD bookstore in October 2007
(see www.cipd.co.uk/bookstore for more details).

 The changing HR function

Background

Methodology The majority of the remainder describe themselves as

The questions used in this survey drew upon the HR managers (8%), HR experts (3%) or business
questionnaire used for the 2003 CIPD survey of the HR partners (2%). The context of responses varied slightly
function (CIPD 2003), the report for the first phase of less, with 73% of respondents answering in relation
this project (CIPD 2006) and the case-study findings to whole businesses, 17% in relation to individual
of the second phase. The survey questionnaire was business units and 10% in relation to corporate centres
devised in two formats, paper and online, for or head offices.
respondents’ convenience.
The variety in the positions held by respondents partly
A list of contacts for potential respondents was drawn reflects the sizes of the organisations that they
up with the aim of recruiting the most senior HR represent. The median size of the units or
personnel from UK organisations. Two-thirds (64%) organisations represented is 824, although behind
of responses were done on paper and a third (36%) this figure lies substantial variance: the inter-quartile
through the online questionnaire. Data was input range is 2,650, with responses ranging from 1 to over
automatically from the online questionnaires and 400,000 employees.
manually from the paper questionnaires.
Respondents represent both public (43%) and private
Respondents (57%) organisations. Just over a third (36%) work
The CIPD sent out 12,000 invitations to complete the for multinational organisations.
survey: 2,000 by email and 10,000 by post. A total of
787 people responded to the questionnaire. Of these, The great majority (84%) of respondents are
57% class themselves as heads of HR functions and a CIPD members.
further 26% say they were board members (Figure 22).

Figure 22: Job description of respondents

3% 4%
2%

8% 26% Board member

Head of HR function

HR manager

Business partner
57%
HR expert

Other
Base: 784

The changing HR function 

Acknowledgements

The CIPD is very grateful to all those organisations We would also like to thank Jonny Gifford from the
and individuals who gave their time to take part in Institute of Employment Studies (IES), who was the
this survey. author of this survey report for the CIPD.

References

CIPD. (2003) HR survey: where we are, where we are REILLy, P. (forthcoming) The changing HR function:
heading. Survey report. London: Chartered Institute of transforming HR. London: Chartered Institute of
Personnel and Development. Personnel and Development.

CIPD. (2006) The changing HR function: the key

questions. Change Agenda. London: Chartered Institute
of Personnel and Development.

 The changing HR function

We explore leading-edge people management and development issues through our research.
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Issued: September 2007 Reference: 4225 © Chartered Institute of Personnel and Development 2007
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