Is Centralisation the New Frontier for People Functions?

In the ever-evolving landscape of talent management and human resources, people functions are continually seeking innovative ways to attract, support, and develop their talent to unlock their full potential.

In pursuit of this, we have noticed a growing number of organisations with evolved talent functions have initiated or successfully implemented efforts to centralise their approaches to people development, attraction, or management. The siloed and autonomous functions of the past – functions that operate and make decisions independently – are giving way to globally consistent powerhouses that oversee programs and strategies across the entire organisation.

Why the shift? Research shows the percentage of organisations with centralised HR structures decreases as the number of people they employ increases. This is often because new HR departments need to be rapidly deployed to service new regions as they are established, during global expansion. With centralisation being more common in smaller organisations, it could be seen as a “return to form” for mature organisations looking to re-unify their global approaches under one umbrella after fragmenting during expansion.

What are centralised people functions?

Centralisation refers to the consolidation of HR functions and strategies on a global scale. Instead of having siloed processes and initiatives across different regions, geographies or departments, your organisation could opt to create a unified approach under a single strategy for your entire organisation. This could apply to any area of people management, from attraction and recruitment all the way through to development and retention.

We explore how centralisation is transforming talent functions at some of the world’s biggest employers, whether this approach is right for every organisation, and key factors to consider if you’re implementing a centralised approach in your own organisation.

Why centralise your people function?

Scale and Reach:

Centralising your recruitment initiatives enables you to tap into a broader talent pool, ultimately reducing the time-to-fill vacant positions at your organisation while simultaneously expanding your access to diverse talent. It can also increase retention through more opportunities for internal mobility.

One Global Head of Talent Acquisition for Early Careers at a global consumer goods firm told TST that reaching diverse talent was a major consideration for their centralised campus attraction campaign launch: “Inclusivity was a huge driving factor for us when it came time to redesign our attraction approach and scale it across our 35 markets.”

“By consolidating our attraction campaign into 10 global events across all time zones, we were able to reach over 375 campuses around the world, significantly increasing our ability to find talent we otherwise might not have had access to. Even better – we are now able to say that every student we reach is going to receive the same consistent experience regardless of their geographical location.”

Efficiency and Decision Making:

By eliminating redundant processes across global teams, your centralised people function could more easily develop, coordinate and communicate essential knowledge both within your people function and company-wide.

Critical for this to work is a coherent and focused approach to metrics and measurement on a global scale. Streamlined data collection and analysis capabilities open the door to a huge range of strategic advantages grounded in better informed decision-making. In fact, organisations that use data analytics to inform decision making are 2.6 times more likely to be top performers in their industry.

Data consolidation is a common pain point felt at organisations right now: “Program harmonisation across geographies” was the answer from one Director of Global Relations when we asked what their biggest challenge was in the talent space right now. “Power BI is a skill necessity these days in Early Careers, and the data ecosystem gets even more complex when you add in Global.”

Consistency and Unified Brand:

One of the key advantages of centralising your people function is the ability to ensure consistency not only in practices and strategy, but also in your brand image – particularly important in the recruitment and attraction space. Consider how much control you have over your global brand teams – are they telling the same stories, consistently reinforcing your organisation’s identity, or imparting the same values?

For one Global Head of Talent Acquisition that we talked to, consistent brand identity was a vital driver for centralising their approach to recruitment: “We are ultimately a sales function… The 90%+ of candidates we don’t hire go on to become future clients and future hires. Recruitment is emotive, if they have a poor experience, there goes our brand. Consolidated approaches help us avoid poor experiences.”

Centralisation in Practice

Whether your organisation could benefit from centralisation is ultimately up to your unique needs, strategic goals, and audience.

Critics of centralisation argue that centralised functions can be inflexible to regional needs, and can lead to communications challenges and misunderstandings (for example, when dealing with multiple languages). With decentralised departments, your varied people teams can remain autonomous over their decisions and recognise local priorities so that they can respond quickly your people needs.

However, there are ways to account for regional needs while also benefitting from streamlined centralised structures. If your organisation is looking to centralise your people systems, here are a few specific areas that can have an outsized impact on your people:

Centralised Development Programs:

A global framework for employee development with carefully designed allowances for regional variation can allow you to cater to the varied needs of international  audiences while also maintaining a consistent core curriculum.

Johnson & Johnson’s multi-award-winning EMEA-wide Early Talent Proposition (ETP) is an excellent example of the advantages that a unified approach to development can bring. Their modular approach to early talent development that not only enabled their EMEA Early Talent to own their development from the start, but is scalable and responsive to continuous intake of talent across geographies.

Centralised Attraction:

A centralised attraction initiative is an excellent way to help your organisation reach a broader and more diverse talent pool, while also increasing the footprint of your brand on a global scale.

As part of their trailblazing innovations in graduate attraction, bp’s first-of-its-kind Skills Refinery comprised a dynamic digital learning platform—accessible anywhere in the world, on any device, to anyone, for free. The award-winning initiative was an online, on-demand, self-driven, accessible, bite-sized learning ecosystem that felt powerful and personal to all users, regardless of their geographical location.

Centralised Line Management:

It’s no secret that line managers have a disproportionate impact on people engagement and retention: research has shown that 75% of people who voluntarily left their role did so for reasons their line manager could directly influence.

A centralised approach to line management is a sure-fire way to ensure that your line managers across the globe are aligned with your organisation’s values and goals. This may involve training and development programs for managers to better embody and pass on company values, consistently set up their line reports for success, or even to enable them for senior leadership.

Not sure where to start with your approach to line manager development? Our Line Manager Toolkit can help.