When it Comes to HR Transformation in Asia, it Seems that Every Company is Doing it in Some Shape or HR Transformation in Asia: Upsetting the Apple Cart?

No Regional Headquarter Function

This HR model had no regional headquarter function, with HR of each individual country across Asia operating independently. The global headquarters had limited control on what the individual countries were doing in the region. On the plus side, there is great flexibility and autonomy to adopt local HR practices. However there is limited sharing of HR information, limited mobility of talent from one market to another, and an array of different
HR practices and processes.

Small Regional Headquarter HR Function

This HR structure saw the evolution of the above model to one where there is a small regional headquarter function. Typically this regional headquarter was small and had little control over the countries, but existed to coordinate and summarise information for the global headquarters. The regional HR function included HR specialists in areas like
resourcing, Compensation & Benefits, Learning & Development and HRIS. Compared to the earlier traditional model, this set-up improved the sharing of information between the countries of the region.

Large Regional HR Headquarter Function

A further evolution resulted in a much more sophisticated regional headquarters function. In-country HR Heads and specialists have been aligned very closely with the regional HR Head or regional HR specialists. Sometimes the in-country specialists have had a solid line reporting to regional stakeholders, rather than to in-country HR management. This model, with a larger regional headquarters function, results in both the regional and global HR function having a high degree of control over individual countries. It is characterised by greater sharing of information and increased mobility of Asian HR talent.

Regional Headquarter Function with Shared Services Platform

Over recent years there has been a big focus by companies to reduce unnecessary duplication between certain aspects of HR performed in each of the different countries and at regional headquarters. This has seen the emergence of a regional shared services platform. Transactional HR responsibilities such as payroll, HRIS, and contract generation have been placed into a centralised function that all of the countries tap into. Such a function has usually been created in lower cost countries including India and the Philippines, but also in countries such as Singapore where there is a larger talent pool with regional experience. Some companies have chosen to distribute risk by setting up multiple shared services centres across the region for different functions. Under this structure, the regional HR team and in country HR teams have often become leaner. HR Business Partner roles in turn have usually become more business focused, which can be good news for the further professionalisation of the function, but can sometimes lack the end-to-end variety that some HR talent enjoy.

Keys to Not Upsetting the Apple Cart in Undergoing an HR Transformation

Moving from an HR structure that your team knows and feels comfortable with, to a ‘new-age’ structure which may pay future dividends but involve a degree of short-term pain, is a risk for every company. In order to minimise the risk, it’s important to pay attention to the following :

• Ensure that Business Leaders support the idea of an HR transformation and keep them informed on its progress.
• Don’t reinvent the wheel. Avoid change for the sake of change.
• Analyse different HR shared services arrangements out there and assess their advantages and pitfalls.
• Get the buy-in of your HR team on the merits of the HR transformation, and openly address any concerns.
• Develop a robust plan on exactly how the HR transformation will work and the timeframes to achieve each step, and openly communicate this plan with your team.
• Take into account differences of certain countries, and try not to adopt the same approach for all processes in all - inevitably some unique circumstances made need to be taken into account.
• Understand the implications of the existing versus new HR talent/skill requirements needed for the HR service delivery model.
• Try not to divert too much attention from the existing HR service delivery model in setting up the new model, otherwise service to the business can suffer.
• Have a cut-over plan from the existing HR model to the new model, and allow plenty of room for error.

Conclusion

Construction of the most effective HR service delivery model for a company in Asia is perhaps one of the greatest headaches that regional HR Leaders face. There's never a one-type-fits-all scenario.

The most effective model must take into account the extent to which individual differences in HR operating styles between different countries should be tolerated. While standardising the HR platform may make sense from a cost and manpower resources perspective, many companies have found that too much standardisation later causes problems in certain countries or sub-regions due to issues such as local language, la bour regulations, or working practices.

The answer, in the end, tends to be that companies try to standardise and then centralise as many transactional and repetitive elements of HR as possible, but they remain flexible about making special adjustments for what certain countries might need. The effectiveness of the HR model is then reviewed regularly... Despite the best intentions, most companies who adopt an HR shared services platform don't get it right first time around!