HR Operating Model Report 2023 | The Talent Strategy Group

HR Effectiveness

This new report provides insights into how companies structure and operationalize their HR functions. Based on feedback collected between early and mid-2023 from over 200 companies of all sizes, a few findings include: 1) Reporting Relationships: a) CHRO Reporting: 86% of CHROs report directly to the CEO. The remaining CHROs report to the COO or other C-suite officers. b) HR COE Reporting: Among the various COEs, Total Rewards and Talent Management most frequently report to the CHRO, with 89% and 80% reporting directly to the CHRO, respectively. In cases where a COE doesn’t report to the Chief HR Officer, the most common destination for these COEs (e.g., L&D, Talent Acquisition) to report to is Talent Management. c) People Analytics Reporting: The People Analytics COE reports more frequently to Shared Services and other HR Functions than the CHRO. This finding suggests that this COE may be providing more reporting and less true analytics in many organizations. 2) Layers between CHRO and the First Level in HR: Companies with fewer than 25k employees have an average of 4.5 layers, while companies with more than 25k employees have an average of 5.6 layers. The report notes that having five layers is a good “rule of thumb” to ensure fast information flow and still allow for large promotional steps. 3) HR employees ratio to overall employees. The actual and estimated HR: total employee ratios were estimated and were quite close to the classic ratio of 1:100, at 1:99 and 1:95, respectively. The report provides several other insights. It is important to note that the information serves as directional insights, and practitioners should not draw definitive conclusions about what is correct or incorrect based solely on these findings. As a bonus, check out another article from Marc Effron of The Talent Strategy Group, “The CHRO’s 5 Questions to Optimize Your HR Operating Model.”