A New Era for Human Resources: Systemic HR™ Is Here.

by Kathi Enderes

In today’s rapidly evolving business landscape, the role of HR has undergone a significant transformation. The traditional model of HR, focused on compliance and efficiency, is no longer enough to meet the complex challenges of today's organizations. The Intelligence Era demands a new approach to HR: one that is systemic, agile, and deeply integrated with business strategy. We call this Systemic HR, and it is not just a new operating model; it's an operating system designed for the complexities of the modern business world.

Everything Is Now Connected

Systemic HR is a response to the talent scarcity, industry convergence, and disruptive technologies that characterize the Intelligence Era. In this constantly transforming environment, businesses need to become dynamic organizations, leadership practices need to be revisited, and the HR profession needs to change fundamentally. 

HR functions today need to support many different and highly complex problems, from a secular labor and skills shortage to creating a diverse and inclusive work environment, from developing new leadership behaviors to addressing workforce stress and burnout, and from solving for pay equity to supporting internal talent mobility. Legacy approaches for HR - operating as an efficient service delivery function - are no longer enough. We need a new approach.

Studying the Craft of HR

This is what we set out to study in a multi-year research study in collaboration with LinkedIn .

The World’s Largest Data Set on the HR Profession

We discovered many facts about the HR profession, but the most profound is how the function has to change. Unlike the past personnel function, HR today is a profession of design, consulting, technology, and data.

The Systemic HR Framework

The Systemic HR Framework provides a roadmap for implementing a comprehensive strategy to achieve systemic HR. It outlines six major elements and 18 practice areas that describe a highly consultative, problem-oriented HR function.

We explain each of these elements and practice areas in detail in our Definitive Guide to Human Resources: Systemic HR™. The key insight: Systemic HR changes every domain of HR and talent and provides support with a strategic approach and the right technology architecture. Simply focusing on the HR operating model and structure or just automating HR transactions and hoping for “HR transformation” is not enough.

The Depth of the Problem

What’s critical in systemic HR: the right strategy and measurement approach for the function, prioritizing problems to assign the right resources, empowered HR business partners equipped with design and change capabilities, full-stack HR capabilities across the function, a strategic, employee-first HR technology roadmap, and leveraging new AI capabilities to catapult the function into the Intelligence age. However, most organizations struggle in all of these areas.

 So, how can companies progress towards systemic HR? And where do you fit in?

The Systemic HR Maturity Model

The journey to systemic HR is an evolution of every element, domain, and role, with companies progressing through four levels of maturity. Based on in-depth statistical analysis and many hours of discussions with CHROs, we developed our four-level Systemic HR Maturity Model.

Companies fall into four distinct levels of rewards maturity, with level 1 being the least impactful, and level 4 the most. These levels are found across industries, geographies, and organizational sizes (although there are some distinctions, with industries that are more people-centric and consultative performing better than others).

Level 1 companies are compliance-focused and administrative, with a focus on cost control and risk avoidance. Level 2 companies have moved towards efficient service delivery, professionalizing the HR function and prioritizing low-cost, high-quality service. Level 3 companies have made the shift to a solution-centric approach, focusing on creating business capabilities and personalized HR solutions, with an emphasis on a great employee experience.

The most mature organizations are those at Level 4. Their HR functions operate as systemic, problem-oriented entities, focusing on solving business problems with data and analytics. Like a consulting firm, they align professionals with deep and broad skills to the most important problems in agile teams that quickly come together, deeply understand the problem, and provide multi-faceted solutions that address human and business issues in tandem.  Only 11% of companies are at this level, and they function completely differently from all others.

Systemic HR: Essential to Business Success

So, what practices matter most? We identified seventeen practices that have an outsized impact on business, people, and innovation outcomes. We call them “essentials” because without them, most other strategies have limited impact, and we describe all of them in our Definitive Guide to Human Resources: Systemic HR™.

Companies that use these strategies have much better business, people, and innovation outcomes.

Put differently, without systemic HR, companies cannot keep up with the constant transformation of today’s world.

Six Myths about the HR Functions

As we evaluated all the practices, programs, and approaches of HR strategy, operating models, work, jobs, capabilities, and technology, we discovered six big myths – and revealed the truth.

Myth: The HR function is just a support function.

Truth: The HR function is now the most important business function. It needs to become systemic, focusing on solving business problems with speed, agility, and scale.

Myth: Successful HR organizations focus on delivering high-quality, low-cost services. 

Truth: HR should operate as a consulting firm. It should measure its success by the success of the business, focusing on solving business problems rather than just delivering services.

Myth: Today’s business and talent problems can be solved in isolation in one of the HR domains.

Truth: Solving business problems requires a new systemic approach: the Four R Framework™. This framework aims to Recruit, Retain, Reskill, and Redesign simultaneously, providing a systemic problem-solving approach.

Myth: HR capabilities are only about knowing HR practices deeply.

Truth: Building full-stack HR capabilities is essential to business success. HR professionals need to develop a broad set of skills, including business acumen, data analysis, and problem-solving skills.

Myth: The tiered service delivery model and hierarchical structure is still viable and useful today.

Truth: Systemic HR organizations are flatter, team-based, and agile. They work in agile, problem-aligned teams, not deep functional hierarchies.

Myth: HR technology is useful for automating HR processes and supporting consistency.

Truth: AI and next-gen HR tech are indispensable for the new HR function. HR technology should not only automate processes but also provide data and insights to understand, prioritize, and solve business problems, and use AI to personalize solutions.

A New Era of Business and HR

In today’s post-industrial world of talent scarcity, constant transformation of industries, and disruptive technologies, the legacy model of HR as a compliance-oriented support function no longer works.

Companies around the globe will need to reinvent their HR strategies, operating models, work approaches, skills, roles, and technology. Systemic HR is here to stay.

The Role of AI: Meet Galileo™

The journey to systemic HR means every HR professional needs to become a cross-trained, full-stack expert in all the disciplines of HR. Galileo, the world’s first AI-enabled expert assistant for HR, is designed to do just that, with access to the entire Bersin library of research, frameworks, maturity models, case studies, articles, videos, and podcasts. Galileo makes systemic HR a reality for companies around the world.

Introducing the Systemic HR Initiative

To support every HR leader, organization, team, and professional on the journey to systemic HR, we are not just launching a research study. We are introducing the ongoing Systemic HR Initiative, with monthly themes and deep-dive support for members of The Josh Bersin Company.

 Where to Go Next

• Review the infographic, executive summary, and video to learn more about the journey to systemic HR, and join the Systemic HR Initiative
• The full Definitive Guide to Human Resources: Systemic HR™ is reserved for Josh Bersin Company Members. You'll find a full description of the Systemic HR Framework, the seventeen essential practices, a comprehensive Systemic HR Maturity Model, action steps to progress in the journey towards systemic HR, and examples from companies like IBM, Mastercard, NewYork-Presbyterian, Providence Health, Walmart, LinkedIn, TomTom, LEGO, ING, Telstra, DBS, and more.
• Join the waitlist for Galileo™, the world’s first AI-powered expert HR assistant that helps turn you into a “full-stack” HR professional.
• Participate in the Global HR Capability Project to assess your HR capabilities across 92 capabilities and 20 capability areas and learn how to improve.
• Contact us to become a JBC Member for access to action-oriented, practical research, assessments, and diagnostics, learning programs, community, and much more.
• Join 40,000+ HR professionals in the Josh Bersin Academy to build full-stack HR capabilities across all topics of HR with 25 certificate courses.