Right-Size Your HR Infrastructure
By: Case At Duke
Tags: Scaling Pathways, Hr Infrastructure, Social Enterprise, Human Resources

How do you formalize and evolve the structures to oversee talent as your organization scales, and how should responsibility be distributed across the structures?

As talent becomes more challenging to manage at scale, having the right level of HR infrastructure becomes even more important. The functions that comprise HR must also evolve, as organizations move beyond a focus on merely recruiting and compliance to a more holistic employee experience. Numerous members of the staff throughout the organizational chart will likely have some responsibility related to talent, so how do you strategically structure it?

“At Harambee, we believe that everyone is an HR person. We do have a functioning HR system and team, but I think it’s actually in the implementation that HR truly gets done, so all of us are deeply involved in performance and in retaining and motivating staff.” — Sharmi Surianarain, Harambee

Advice from the field:

1. Create shared HR responsibility across the organization.

Whose role is it to manage talent? One piece of advice that we heard consistently was that regardless of the size of your HR team, recruiting and managing people must be seen as a shared responsibility across the whole organization. As Paul Sansone, former CFO of Better World Books and current Partner of TechCXO, stated, “the most successful HR function is when all executives feel like they own it. Ideally, you do need someone who is focused on it 100 percent every day, but they need to build robust cross-functional relationships and avoid the scenario where the default is ‘it is HR’s issue.’”

Maryana Iskander, CEO of Harambee, echoed, “Is your ‘people function’ — some call it HR — a side function where managers dump performance problems? If so, then it becomes about compliance. You need to ensure that your people function is also embedded in the priorities of your leadership team so that senior managers feel as accountable for people as they do for strategy and execution.”

“At Harambee, we believe that everyone is an HR person. We do have a functioning HR system and team, but I think it’s actually in the implementation that HR truly gets done, so all of us are deeply involved in performance and in retaining and motivating staff.” — Sharmi Surianarain, Harambee

Senior Leadership Time on Talent

Maryana Iskander of Harambee, stated that senior leadership should be spending approximately 80 percent of its time on defining culture and growing people because she believes this ultimately drives every other performance metric in the organization — from strategy and partnerships to operational success and delivery. According to Iskander, “None of this is rocket science — how much time does your leadership team spend on culture and people? Are these topics on the agenda of your management meetings?” In our Scaling Pathways survey, two-thirds of respondents said that they SHOULD be spending between 25 and 75 percent of senior leadership time on talent (as opposed to time spent on general strategy, fundraising, programs, partnerships, etc.). However, nearly 44 percent reported that they are CURRENTLY spending 25 percent or less time.

% reporting the percent of time that senior management currently spends on issues related to talent (e.g. talent pipeline, recruitment, setting culture, managing staff, etc.), and the amount they believe they should spend. From Scaling Pathways talent survey.

2. Identify a right-sized HR team for your stage and model.

The actual structure of HR teams varies across organizations. In the case of Habitat for Humanity International, CEO Jonathan Reckford felt that having a Chief People Officer was critical to the organization’s work. So critical, that during a restructuring wherein Reckford’s number of direct reports shrunk, he kept the Chief People Officer reporting to him directly to illustrate the “mandate that it all starts with talent.” Habitat for Humanity combined its HR and Organizational Learning and Development teams under the Chief People Officer in order to have a holistic approach to how the organization recruits, onboards, and grows talent. The HR part of the team manages recruiting, total rewards (pay and benefits), and employee engagement and relations; the learning part of the team supports individual and team development planning, training and learning opportunities, and succession planning for direct staff. Reckford believes that those two sides of talent management are critical for scaling social enterprises but require different skill-sets.

VisionSpring prioritized investing in an HR department in its fastest-growing market, India, in lieu of creating a dedicated (and comparatively expensive) function in New York. To meet global (non-India) expansion needs, VisionSpring uses a recruiter, on contract, and also integrates human resource responsibilities into other roles across the organization. CEO Ella Gudwin envisions the organization continuing this arrangement until it meets an internal threshold triggering the hiring of a global head of people and administration. However, VisionSpring is currently working to broaden its HR focus beyond recruitment and compliance, creating a new position for a specialist in performance and talent development.

Organizational Capacity for Talent-Related Functions.

When asked whether their organizations have dedicated capacity for three talent-related functions, Scaling Pathways survey respondents provided the following information: HR Compliance and Process: Compliance was most likely to be housed internally (82 percent). One respondent noted, “We have 3.8 dedicated HR FTEs total and probably 3.3 of those FTEs end up being around compliance and process.” Employee Experience: 17 percent reported not having any capacity (internal or outsourced) around employee experience. One respondent that has staff capacity noted, “We have recently appointed an interim role [focused on] strategic initiatives in part because this was not getting enough attention and we were having employee retention problems and lots of grumbling. She is probably spending 40–50 percent of her time on this right now.” Other respondents acknowledged the need to dedicate more time to this work. Recruitment: Of the three areas, recruitment was most likely to be outsourced (21 percent) with one respondent noting, “We fully outsource strategic searches and outsource screening only for director and below searches. We use talent firms to do this work. Waldron and Perrier Laver are two that we would recommend.”

% reporting they have such talent- related capacity on staff, on contract (i.e., outsourced), or not at all. From Scaling Pathways talent survey.

Do’s and Don’ts of Right-Sizing your HR Infrastructure