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How Come Our HR Decentralization Was a Miserable Failure?

About a year ago, our human resources department decided to decentralize. This decision was based upon negative feedback from business units regarding the performance of the HR team. One year later, things have gotten much worse. Many of the HR professionals have left the company because they were unhappy and unsupported. Is it common to see decentralization work so poorly? —Cure Worse Than Disease, vice president of corporate services, real estate, Menomonee Falls, Wisconsin
October 27, 2011
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Related Topics: HR Services and Administration, Dear Workforce, Workplace Culture
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Dear Cure Worse Than Disease:

Many companies, especially those who have experienced high growth, find that bringing human resources closer to the employees who receive services is a wise business decision. As you have discovered, this is no easy task.

Companies often see the satisfaction of employees decrease significantly following decentralization—(which of course defeats the purpose. But there is hope for companies considering this strategy. For example:

One entertainment company several years ago decided to decentralize its HR team. The company had grown from about 500 to 3,000 employees in five years. The corporate HR team was serving employees at about 15 locations in the U.S. This resulted in a huge bottleneck of paperwork as the HR group dealt with employees from multiple times zones, most of whom had never been seen face to face.

Nonetheless, the company managed to overcome those hurdles. The decentralization went smoothly, and the end result was superb. The company:

• Employed highly talented individuals for the field HR positions. This increased the overall expenditure for HR salaries across the organization, but resulted in a group of HR employees in the field who were knowledgeable and able to provide the service levels that were required.

• Held an extensive orientation for the field HR employees at its corporate office. After attending, those at the outlying sites had a clear understanding of all HR procedures and felt well-equipped to run the show at their location. This orientation was ongoing as we hired field HR employees long after the decentralization.

• Held monthly conference calls and hosted retreats at a designated location on a consistent basis for the field HR employees. This removed the "I'm on an island" feeling and created a strong cohesive HR team although they were spread across multiple locations. The travel costs for the retreats were high but well worth the expenditure.

• Designated a corporate HR employee to act as a mentor, sounding board, cheerleader and overall supporter for each HR field employee.

Finally, it is extremely important to acknowledge that decentralizing your HR department represents a significant organizational change, especially for employees affected by the change. Any company planning to decentralize HR should explore organizational-change strategies. It may be worthwhile to at least consider hiring an organizational development expert to assist with the process. Although each company is of course unique, employing the strategies outlined above and helping the HR team embrace the change is likely to result in a solution that is enduring.

SOURCE: Clark Souers, Executive HR Consulting Group, Burbank, California

LEARN MORE: Establishing realistic goals for HR metrics marks a big step toward becoming a high-performing organization.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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