Balancing Efficiency and Experience: Designing the HR Operating Model of Tomorrow

In the quest to modernize HR, one tension keeps emerging: how do we streamline operations for efficiency without sacrificing a great employee experience?

Senior HR leaders know this challenge all too well. Traditional models gave us consistency and cost-savings through standardization, but often at the price of rigidity and a “one-size-fits-all” feel. 

Today’s employees expect more – personalization, responsiveness, and a voice in shaping their workplace. Meanwhile, executives still demand leaner HR functions.

The good news is that efficiency and experience don’t have to be a trade-off. In fact, the HR operating model of tomorrow is all about balancing both, leveraging new ways of working (like agile squads and design thinking) and new technologies (like AI-driven case management) to deliver better service at lower cost.

This article dives into how HR can merge the best of traditional shared services with agile teams, smart AI tools, and employee co-creation to achieve that balance.

We’ll explore a practical roadmap for evolving your HR operating model, discuss how key HR roles will transform (think HR ops specialists becoming AI supervisors, policy experts turning into journey designers), and provide evidence-backed insights to guide your journey.

Let’s challenge some old assumptions, take on what needs to change, and map out a future-ready HR model that puts employees and business value first.

Chapters

• The limits of traditional HR models: Why we need a change
• Beyond one-size-fits-all: A hybrid model balancing efficiency and experience
• From legacy to future: A roadmap for HR operating model transformation
• New roles, new skills: How HR roles evolve in the modern operating model
• Agile ways of working: Embedding squads, sprints and co-creation in HR
• Designing tomorrow's HR: Cost-effective and people-centric

The Limits of Traditional HR Models: Why We Need a Change

For over two decades, many companies organized HR around the classic three-pillar model introduced by Dave Ulrich: HR Business Partners (BPs) embedded in the business, Centers of Excellence (CoEs) for expertise, and shared services for transactions.

This structure (sometimes paired with global service centers or GBS units) undoubtedly drove efficiency – standardizing processes, centralizing routine work, and trimming costs. However, cracks in the model have been showing. Many HR leaders now admit that the Ulrich model, in its pure form, is not keeping up with today’s challenges.

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When the Pillars Become Islands

Why? Silos and rigidity.

The three pillars sometimes became three isolated islands: BPs overwhelmed and struggling to be strategic generalists, CoEs churning out policies removed from daily reality, and shared services treating employees as “tickets” in a queue.

As one study noted, this siloed setup clashes with the growing need for connected, holistic HR solutions and a unified employee experience.

What Employees Really Care About

Employees facing a personal HR issue (say a parental leave question) don’t care which “pillar” owns the process – they just want a quick, humane answer. Yet the traditional model often led to hand-offs and confusion, which frustrates employees and HR alike.

Efficiency’s Hidden Price Tag

Moreover, over-standardization under GBS has had side effects. Sure, globally unified processes and platforms cut down variance and cost.

But overly rigid standards can make HR feel impersonal and inflexible – as if employees are cogs in a machine. For example, a global policy might maximize efficiency but ignore local cultural nuances or individual circumstances, leading to poor employee sentiment.

In the pursuit of “efficient HR,” some organizations ended up with cookie-cutter experiences that eroded trust and engagement. It’s telling that only 51% of employees feel their organization actually delivers the experience it promises.

The old operating models weren’t designed for an era where employee experience (EX) is paramount and where agility is a survival skill. In short, traditional structures have hit a wall: they’re great at control and cost, but often slow to change and tone-deaf to experience.

It’s time to evolve. That doesn’t mean we throw out everything. The efficiency gains from shared services and GBS are real and remain important.

However, to meet today’s expectations, HR must layer new capabilities on top of this solid foundation.

We need to preserve the best of what worked (scalability, consistency, compliance) while shedding what doesn’t (silos, bureaucracy, “HR says no” mindsets). The rest of this article looks at how to do exactly that: creating a new hybrid HR operating model that’s both cost-effective and human-centric.

Beyond One-Size-Fits-All: A Hybrid Model Balancing Efficiency and Experience

Imagine your future HR organization as a two-engine model: one engine is a high-efficiency backbone handling routine tasks at scale, and the other is a high-experience design engine continuously improving and customizing services.

In practical terms, this means merging the strengths of shared services with the flexibility of agile teams and smart use of AI. The goal is to break the old trade-off between efficiency and experience.

Instead of choosing one, leading HR functions are designing models that deliver personalized, seamless service without blowing up the budget.

One way to visualize this (see above) is a layered HR operating model. At the base, a digital HR service backbone runs lean and standardized processes – think of this as an evolution of your HR shared services, now supercharged with automation and AI.

For example, many organizations are deploying AI-driven case management and chatbots to handle Tier-1 inquiries.

Engine 1: Digitally Driven, Dollar-Smart

These tools can resolve common questions instantly (improving response times for employees) while reducing workload for HR staff.

By 2027, an estimated 90% of organizations will have augmented their operational HR roles with automation, boosting efficiency by ~30% on those tasks. This is the efficiency engine: it’s about self-service, machine speed, and scale.

It includes your core HRIS platforms, a robust knowledge base, AI assistants, and a streamlined set of global processes. When well-implemented, it yields huge savings – recent research in a 30,000-employee company found 29% efficiency gains (worth €5.2M annually) are possible through AI and automation in HR. That freed capacity can be reinvested into higher-value work.

Squads that Spark Joy

On top of that foundation sits the experience engine: agile, cross-functional “squads” or product teams focused on different employee journeys and strategic priorities.

These squads are small, empowered teams (often a mix of HR specialists, IT folks, data analysts, and even employees or managers from the business) that work iteratively to design and improve HR services.

For instance, you might have an “Onboarding Experience Squad” or a “Career Development Squad” that continuously refines those journeys.

They operate less like a traditional department and more like a product development team, with a mission to deliver a great “product” (e.g. the onboarding experience) for their end-users (employees and managers).

They use agile methodologies – setting a backlog of improvements, using sprints to test changes, gathering feedback, and so on. One global financial institution that adopted an agile HR model reorganized HR around the employee life cycle (e.g. join, learn, perform, grow, leave) and set up workstream-based product teams with end-to-end responsibility.

In this model, run (daily operations) and change (improvements) were integrated, so the same team that handles, say, recruiting operations is also continuously improving the recruiting process. The result? Far fewer hand-offs, faster changes, and an HR function that adapts as quickly as the business needs it to.

Build WITH, Not FOR, Your People

Crucially, these agile teams co-create solutions with employees. Rather than HR designing programs in a vacuum and then “rolling them out” to a surprised workforce, employees are invited into the design process.

This can be done via employee focus groups, design thinking workshops, or by including employee representatives in squads when developing new policies or tools.

Employee co-creation not only leads to better ideas (because it’s based on real user input), it also boosts buy-in. In fact, involving employees early can drive 30% higher adoption of new HR technologies and a greater sense of fairness in the outcomes.

The message is clear: when you build WITH your employees, not just for them, you get solutions that stick. So, our hybrid model blends centralized efficiency (through a digital backbone and shared services) with decentralized creativity and empathy (through agile, journey-focused teams working closely with employees).

HR as the Platform, Not the Policy Police

We still have “central HR” in this picture – but its role shifts to enabling and orchestrating these networks, not micromanaging every decision.

Think of HR as a platform: providing standards, data, and technology that everyone uses, while allowing flexible, team-based innovation on top. It’s a bit like how modern tech companies operate: a stable platform and API layer, with squads developing new apps on top of it.

For HR, the “platform” might include an integrated HR portal, an AI knowledge assistant, and core systems that handle transactions globally. The agile teams then customize experiences or tackle complex issues that the platform alone can’t solve.

This approach directly addresses the shortcomings of the old model. Instead of siloed CoEs handing off to operations, we get end-to-end accountability: the same team designs and delivers a solution, so no more “not my department” shrugging.

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Global Standard, Local Freedom

Instead of assuming one process fits all, we get variation where it matters – perhaps 80% standard globally, 20% locally adaptable – guided by employee feedback.

And instead of HRBPs as lone rangers, business leaders and managers are brought in as partners or even embedded in agile teams, so solutions are business-driven and human-centered.

Importantly, this hybrid model isn’t theoretical; it’s emerging in practice (read Evolving HR Operating Models: From Ulrich to AI-Driven HR for more on changing operating models). 

Powered by Data & Empathy

All these variations share two common enablers: a strong data/technology backbone and a user-centric mindset.

In other words, whether a company leans more into agile teams or remains closer to the Ulrich structure, the winners invest in great HR tech and refocus HR’s mission on the employee experience.

Design for People First (Vendors Finally Get It)

Even vendors are responding to this need. Modern HR service delivery platforms (for example, Applaud) have flipped the traditional case-management approach on its head.

Rather than designing for HR efficiency first, they design for the employee’s convenience first – providing a seamless one-stop HR portal and tier-zero self-service that make it easy for people to get what they need without filing a ticket.

This employee-first design not only improves satisfaction, it also reduces case volume and burden on HR teams by deflecting routine queries. It’s a great illustration of balancing efficiency and experience: by making things intuitive for employees, you naturally drive efficiency behind the scenes.

In sum, the HR operating model of tomorrow is not an either/or choice between centralized efficiency versus decentralized experience.

It’s a both/and: a cohesive model where smart tech and shared services provide a scalable foundation, and agile, empowered teams (with employees in the mix) ensure continuous adaptation and personalization.

Now, how do we get there from here? Let’s lay out a practical roadmap.

From Legacy to Future: A Roadmap for HR Operating Model Transformation

Transitioning from a legacy HR model (be it a strict Ulrich three-pillar setup or a big GBS-led operation) to a new hybrid model is a journey.

It won’t happen overnight or with a single re-org memo. It requires thoughtful planning, experimentation, and change management. Here’s a step-by-step roadmap to guide senior HR leaders.

1. Start with a Vision (and a Reality Check)

Begin by defining what “great HR” looks like for your organization in the future.

Is your goal to be more agile (faster responses to business changes)?

More employee-centric (higher engagement and satisfaction scores)?

More data-driven?

Likely all of the above. Paint a vision of an HR function that is both a cost-efficient machine and a trusted employee champion. At the same time, do a frank assessment of your current state.

Where are the pain points? Perhaps HR business partners are swamped with administrative work, or employees are bypassing HR because the self-service tools are confusing.

Use surveys, focus groups, and data to pinpoint where the current model is failing (e.g., low first-contact resolution rates, slow policy updates, poor scores on HR service satisfaction). This creates urgency and targets for change. For example, if only 40% of employees feel HR supports their career development, that’s a gap to address.

2. Secure Leadership Buy-In and Cross-Functional Alignment

A new operating model will affect not just HR, but managers and employees – and possibly external partners (like an outsourced HR service center).

Make the case to the C-suite with hard facts and ROI. You might highlight that improving employee experience can double your company’s financial performance metrics or that a better EX could increase profits per employee by 45%.

CEOs and CFOs respond to numbers, and indeed there’s growing evidence that happier, engaged employees drive better business outcomes.

Also emphasize how an updated model will enable business agility: e.g., “With agile HR teams, we can implement strategic workforce changes in weeks instead of months.” Bring examples from respected sources (say, a McKinsey case or a peer company’s story) to show this is a credible, necessary evolution, not a fad.

Secure not just passive approval, but active sponsorship – you’ll need leaders to champion this change, allocate budget for new tools or training, and model the new ways of working (like involving their teams in co-creation sessions). Importantly, involve IT and Finance early; HR’s new model will rely on tech investment and may change cost structures, so partnership with these functions is key.

3. Design the Target Operating Model (and New Structure)

With vision and buy-in, assemble a design team to sketch out your future HR operating model in detail.

This is where you decide the balance of centralization vs. decentralization and how to structure the agile teams. Many companies find it useful to map HR services along the employee journey (attract, join, develop, perform, depart, etc.) and identify a few broad “product areas” or workstreams.

For each, you might define a product owner or a squad that will own that domain end-to-end.

For example, you could end up with a structure like: a “Join Us” squad (covering recruiting and onboarding), a “Grow” squad (covering learning and career paths), a “Core HR & Pay” squad (covering HR operations, payroll, benefits), etc.

In parallel, decide what stays centralized – typically, the HR operations hub (shared services) remains as a core delivering Tier-0/1 support across all areas, and perhaps Centers of Expertise remain for truly enterprise-wide programs (like executive compensation or company-wide compliance policies).

However, these CoEs might shrink in size and act more as consultants or chapters that lend expertise to squads rather than owning policy execution.  Indeed, one emerging model is “HR product teams + expert chapters”: cross-functional product teams do the work, while expert groups ensure standards and skill development across teams (similar to the “Spotify model” of agile organizations). 

Also sketch out governance: how will priorities be set and resources allocated across squads? Some companies install a portfolio management meeting or use OKRs to align squads to top-level goals.

Don’t neglect the technology architecture in your design – it should support the model (e.g., a single employee portal for Tier-0, integrated case management, collaboration tools for squads, analytics dashboards).

The output of this step might be a new org chart or a diagram of the new model, but also clear role definitions (more on roles soon) and interaction models.

Be sure to stress test the design with scenarios (“How would a new policy roll-out happen in this model versus today?”).

4. Pilot Agile Squads and New Processes

Rather than big-bang implementation, identify a couple of pilot areas to start working in the new way.

For example, pick one employee journey (perhaps onboarding, since it involves multiple HR areas and is critical to get right) and set up an agile HR squad to own it. Empower them to operate with the new model’s principles: give them clear outcomes (e.g., “Improve new hire 90-day retention by 15% while reducing administrative effort by 20%”), let them break the work into sprints, and allow them to bypass some of the old bureaucracy. This team can serve as a proof of concept.

Similarly, pilot any AI-driven tools in a smaller scope first – for instance, launch a chatbot for answering benefits questions in one country before scaling globally. Early pilots will yield quick wins and also highlight wrinkles to iron out (maybe the squad finds they need better data access, or the chatbot needs more training on the knowledge base).

Celebrate the successes (e.g., if the onboarding squad cut down new hire wait time for equipment from 10 days to 3, or if the pilot chatbot resolved 1,000 queries with 90% accuracy). Use those to build momentum. At the same time, be transparent about lessons learned and iterate on the model design as needed.

Agile methodology itself teaches us to iterate – treat your operating model transformation as an agile project too, with feedback loops.

5. Reskill and Redefine Roles

A new model on paper means little if your people don’t have the skills and understanding to execute it. Communicate the new roles and career paths available in the target model.

For instance, you may be introducing roles like Product Manager (HR), Employee Experience Designer, AI Solutions Lead, or Scrum Master for HR teams – titles that didn’t exist in legacy HR.

Explain how existing roles will evolve: perhaps “HR Operations Specialist” is now a “HR Service Delivery Specialist” focusing on overseeing AI and handling complex cases, or a compensation analyst in a CoE might become a member of a “Rewards Squad” as the comp expert.

Expect that not everyone will immediately fit these new roles; plan for training and reskilling. Industry research indicates nearly half (47%) of organizations see skill gaps as a primary barrier, especially around AI and digital capabilities.

You’ll likely need to upskill HR staff in areas like agile ways of working, data analytics, AI literacy, and human-centered design. A balanced approach is usually best – one study suggests aiming to reskill ~60% of your HR team and hire ~40% fresh talent to bring in new capabilities.

This blend honors your internal expertise while infusing new blood where needed. Practical steps may include formal training (e.g., sending folks to “Agile for HR” workshops, or certifications in HR analytics), rotational assignments (to spread knowledge), and bringing in a few external experts (like hiring a seasoned product manager from the tech world into HR).

As roles redefine, update performance metrics too: if someone moves from a process KPIs-driven role to a product team, they should be measured on team outcomes and user satisfaction, not just transactions processed.

6. Reinforce with Technology and Data

If your vision is to have AI-driven case management, agile knowledge bases, or personalized employee portals, you’ll need to invest in the right HR technology stack. Evaluate whether your current HRIS and case system can support the hybrid model. 

Many organizations layer an HR service delivery platform (like Applaud or similar) on top of their core systems to enable a better employee interface, knowledge management, and workflow automation. The tech is the enabler for both efficiency (automation, self-service) and experience (user-friendly portals, mobile access).

Also, develop your data backbone – ensure HR data is clean, unified, and accessible for decision-making. In an agile model, teams will need real-time insights (e.g., “What’s our time-to-hire this sprint and where are bottlenecks?” or “Which knowledge articles have the lowest helpfulness ratings this month?”).

Consider deploying people analytics tools and dashboards that product teams and leaders can use to track both operational metrics and experience metrics (like eNPS or service satisfaction scores).

Automation opportunities should be aggressively pursued: if your pilot shows certain repetitive tasks (like verifying employment letters or answering policy FAQs) can be handled by bots or RPA, scale that up.

A word of advice: implement tech in tandem with process changes. If you roll out a fancy new chatbot but haven’t updated the underlying knowledge articles to fix errors, it won’t magically fix experience. Or if you introduce a new agile project management tool for HR teams but don’t train people in Scrum, it’ll fall flat. Tech and process must align.

7. Manage Change with Empathy (for HR and Employees)

Transforming the operating model is a large change management exercise.

HR professionals themselves may be anxious – this transformation can feel like “replacing the airplane engine mid-flight.” You must engage your HR team in the change: communicate the why (the vision and the benefits), involve them in design workshops (taking a page from employee co-creation, do internal co-creation with your HR staff on how best to implement changes), and set up forums for questions and feedback.

Be honest that not everything is figured out upfront; that’s why you’re using pilots and iteration. It’s also key to manage the change for your employees and managers (the customers of HR).

They will notice new things – a new portal, different contacts, maybe that their go-to HRBP is now part of a team and introduces them to other squad members for certain queries. Roll out changes with clear communication: e.g., “We’ve improved our HR support model.

Now when you have a question, you can use our new HR chat assistant for instant answers, and we have a dedicated team focusing on continuously improving the onboarding experience – here’s how to give them feedback…”

If agile HR is meant to be customer-centric, demonstrate that by making the transition smooth for customers. Provide training or orientation to managers on how to engage with the new model (for example, if we re-empower managers with more HR decision rights, ensure they are comfortable taking them on).

Also prepare for some resistance – some people will prefer the old ways out of habit or fear of the unknown. This is natural. Address it by highlighting early wins and testimonials (like “Managers in the pilot group loved having direct input to the HR squad and saw faster turnaround on their requests”). Patience and persistence are needed; culture shifts take time, but with steady reinforcement, people will see the benefits.

8. Measure, Refine, and Scale

Finally, build a feedback loop into your roadmap. Establish metrics for both efficiency and experience to track the impact of the new model. For efficiency, you might monitor HR cost-to-employee ratio, service center volume vs. AI deflection rate, time to deliver a policy change, etc.

For experience, track employee satisfaction with HR services, eNPS (employee Net Promoter Score), retention rates, or even business outcomes like speed of hiring and quality of hire. As you implement piece by piece, measure these and report them.

Celebrate improvements: for instance, if your new self-service platform and knowledge base doubled the self-service resolution rate, that’s a huge win. Or if the agile “career development squad” pilot helped increase internal promotions by 20% (indicating people are finding growth paths internally), shout about it.

Conversely, be ready to tweak what’s not working. Maybe one of your squads isn’t gelling – perhaps its mission is too broad, or they lack a skill – adjust by narrowing focus or rotating someone in. Perhaps the data shows one region’s employees still aren’t using self-service – maybe you need to better localize the content or do more change comms there.

The transformation is CONTINUOUS. As you gain confidence from pilots and early adopters, scale up the new model across more HR areas and geographies in phases.

Over 1-2 years, you might fully replace the old structure with the new one. And keep looking ahead: technologies like generative AI are evolving fast (one CEO described Gen AI as “the most significant opportunity to reshape HR in decades”, enabling us to deliver more value with less cost – essentially square the circle of efficiency vs. experience).

So, your model might need further evolution to be “machine-powered” as new possibilities emerge. The key is you are building an HR function that’s adaptive by design. Future changes (and there will be many) will be easier to absorb in an agile, employee-focused HR organization than in a rigid one.

By following a roadmap like this – vision, buy-in, design, pilot, reskill, tech, change management, measure & refine – you systematically move from the legacy state to the future state. It’s a lot of work, yes.

But the payoff is tangible: organizations that have redefined HR around user needs (rather than internal structures) have seen significantly higher returns on their HR technology investments (up to 40% higher ROI) and stronger business alignment. 

In the next sections, we’ll zoom in on two critical aspects of this transformation: how HR roles are changing, and how to embed agile ways of working in HR’s DNA.

New Roles, New Skills: How HR Roles Evolve in the Modern Operating Model

One of the most exciting (and challenging) parts of designing the HR operating model of tomorrow is reimagining the roles of the people who make it run.

With automation taking over repetitive tasks and agile teams blurring traditional boundaries, the skills and focus of HR professionals will shift. Let’s examine a few roles in particular – HR operations specialists, policy/knowledge base managers, and employee experience designers – and how they’ll evolve in this new setup.

HR Operations Specialists → HR Service Experts & AI Supervisors

In the traditional model, HR ops specialists (in shared services or HR call centers) spent their days processing transactions, answering routine queries (“How do I update my benefits?”), and managing cases.

As AI and self-service handle more of this workload, the volume of simple questions hitting HR will drop. (Imagine an AI assistant resolving, say, 50% of Tier-1 questions instantly – that’s not far-fetched.) Does that make the HR ops role obsolete? Far from it – it elevates it. HR operations specialists will become orchestrators of the AI-human collaboration.

Think of them as “HR service advisors” who supervise the digital tools and step in when human judgment is required. They’ll train and fine-tune chatbots (feeding them new Q&As, correcting answers), monitor service quality dashboards, and handle the complex cases that AI flags for human review.

When an employee has a nuanced issue that the algorithm can’t parse, the case swiftly escalates to an HR service expert who has the empathy and experience to resolve it.

These specialists will also focus on continuous improvement: analyzing trends in inquiries to spot where a process is broken or a policy unclear (if 200 employees asked the same question about a policy, maybe the policy document or communication needs fixing).

In essence, HR ops folks move from being “transaction processors” to “problem solvers and relationship managers”. They’ll need new skills: digital literacy, data interpretation, and a comfort with managing digital “agents.”

The efficiency impact on this role will be significant – research suggests up to 50% of current HR operations work could be automated – which means these team members can be reallocated to more value-add activities.

In an agile HR team context, an ops specialist might sit within a product squad, bringing their practical know-how and ensuring that solutions are implementable and scalable.

They become the voice of feasibility and operational excellence on a multi-disciplinary team, while also ensuring the AI does its job correctly. We sometimes call this “bot supervision” or AI governance – a crucial new responsibility.

Policy & Knowledge Designers → Employee Journey Designers and Content Curators

Every HR function has people who craft policies, write knowledge-base articles, and design the guidance that employees and managers rely on. Traditionally, these might be specialists in a CoE (like a policy manager for benefits) or a knowledge management lead in HR operations.

In the new model, policies don’t live in a binder on a shelf – they are part of dynamic workflows and consumer-grade knowledge portals. The role of the policy/knowledge designer shifts from writing static documents to designing end-to-end experiences and content that truly helps employees.

We might call this role an “Employee Journey Designer” or “HR Content Strategist.” They will use design thinking to simplify and humanize HR policies. For example, instead of a 30-page policy pdf on parental leave, they might create an interactive decision tool or a step-by-step digital guide that answers common questions in plain language.

They’ll also pay attention to tone and user experience, ensuring that HR communications feel empathetic and clear (no more confusing HR jargon that leaves employees guessing). A big part of their job will be maintaining the knowledge base that AI assistants and employees rely on – continuously updating FAQs, knowledge articles, and wiki pages based on what real users ask and the gaps identified. Modern HR tech can even assist them here: AI can score content on readability and flag common search queries with no results.

The policy/knowledge experts of tomorrow will work closely with AI by feeding it high-quality knowledge and curating its outputs. Additionally, they often serve as the bridge between legal/Compliance and the user – translating necessary rules into employee-friendly guidance. In agile teams, these individuals might be embedded in each squad as the go-to person for content and policy integrity (ensuring changes don’t break compliance, but also that we’re not over-engineering rules). You could say they transition from “policy police” to “experience architects.”

Their success will be measured not by the number of policies written, but by metrics like content usefulness, employee understanding, and whether employees can navigate HR information with ease. After all, what good is a beautifully written policy if no one understands it or follows it? By focusing on the journey (e.g., what does an employee actually feel and need when they go through parental leave, and how can our policies support that?), they make HR services more humane.

Employee Experience (EX) Designers → Agile Team Experience Leads and Co-Creation Facilitators

Some HR departments already have employee experience or employee engagement roles – people tasked with surveying employees, improving engagement, and maybe mapping journeys. In the new model, EX design becomes central to how HR operates.

Employee experience designers will take on even more prominent roles as the voice of the employee in every project.

They’ll use tools like journey mapping, personas, and empathy interviews as standard practice whenever HR is developing something new. In fact, every agile HR squad should ideally include someone with these design skills.

These individuals will lead co-creation workshops with employees – effectively acting as facilitators who bring employees and HR together to design solutions. For instance, if HR is redesigning the performance review process, the EX designer might run sessions where employees and managers literally help sketch out what a better process looks like. This role is about continuous research and iterative design: prototyping an idea, getting feedback, iterating.

They also champion personalization – recognizing that different segments of employees might need different approaches (what works for a frontline retail worker might differ from a remote software engineer in terms of communication or support). Personalization is increasingly feasible with technology, and 87% of HR professionals believe that tailoring experiences (personalization) boosts employee satisfaction.

The experience designer will push the team to use data and creativity to tailor solutions. In the agile context, the EX designer often pairs with the product owner to ensure that whatever the squad delivers meets a real user need and is tested from the end-user perspective.

They will also likely be measuring the outcomes: e.g., running quick pulse surveys post-implementation to see if an intervention actually improved experience. In the past, such roles might have been seen as “nice to have” (or relegated to a sub-team that did annual engagement surveys).

In the future, experience design is a core skill across HR. Even those without the formal title will need to adopt its principles. We might see titles like “HR UX Designer” or “People Experience Lead” become common. And they won’t work alone – they collaborate in multidisciplinary teams (much like a UX designer on a software team collaborates with engineers, product managers, etc.).

More Evolving Roles

Beyond these, many other HR roles are evolving too. HR Business Partners in some organizations are becoming more strategic advisors and data translators – focusing on high-level consulting to business leaders, while delegating routine employee support to the service backbone or agile teams. Some companies are even reducing the number of HRBPs and instead embedding HR generalists into squads or creating “consulting pods” that can be pulled in for business projects as needed (see McKinsey).

Center of Excellence experts (like comp & ben specialists, learning experts) might form communities of practice that support the agile teams rather than operating as separate towers. And new roles like “HR Product Manager” are emerging, responsible for the end-to-end success of a particular HR service (e.g., the “talent acquisition product manager” who oversees all processes and tools related to hiring, continuously tuning them based on feedback and metrics).

According to recent research, many companies are validating a shift toward these product-oriented HR roles, where product managers own key employee “products,” and teams of problem-solvers cut across traditional specialties to tackle complex challenges.

A useful way to think about all this is the T-Shape skill model for HR professionals.

In the past, many HR roles were I-shaped (deep in one vertical, like comp specialist or recruiter or trainer). The future HR professional – whether an ops person, a policy expert, or a designer – will have a broad understanding (the horizontal bar of the T) across data, technology, and design, plus one or two deep expertise areas (the vertical bar).

For example, an HR ops person might also be quite savvy in data analysis and conversational design for chatbots, beyond just knowing HR admin. Or a policy expert might also be skilled in journey mapping and agile project management.

The five most critical skills cited for future HR professionals include things like AI/ML literacy, human-centered design, digital product management, data analytics, and ethical AI governance – a far cry from the classic HR skill set of just employee relations and compliance.

It’s a time of reinvention for HR roles. This can be unsettling, but also empowering. As routine tasks diminish, HR roles at all levels have the opportunity to become more strategic, creative, and impactful.

Rather than being “the policy police” or “paper pushers,” HR team members are poised to be product owners, designers, analysts, and coaches who directly contribute to business success and a thriving workforce.

It’s up to HR leaders to facilitate this evolution – through training, role modeling, and giving teams the freedom to step out of their old silos. When people see their roles evolving rather than disappearing, they’re more likely to embrace new ways of working.

Agile Ways of Working: Embedding Squads, Sprints, and Co-Creation in HR

One of the pillars of the new HR operating model is adopting agile ways of working. But “agile” is not just a buzzword or a Silicon Valley thing – it’s a mindset and a set of practices that can profoundly change how HR delivers value.

Let’s unpack how agile methods like squads, story points, and iterative sprints can be applied in HR, and how they complement the model we’ve been discussing.

What does Agile HR look like?

At its core, agile in HR means moving away from long, rigid plans (like year-long project cycles or annual process updates) to a mode of continuous improvement and adaptability. It involves cross-functional teams (squads) working in time-boxed intervals (sprints) to deliver small increments of value, then getting feedback and adjusting.

Instead of a massive once-a-year engagement program rollout, an agile HR team might deliver a new recognition feature this month, test it, gather input, and next month tweak it or add another feature.

This iterative cycle keeps HR closely aligned with what employees and the business need right now – not what they needed a year ago when the plan was made.

Agile Squads in HR

We touched on this earlier – squads are small teams (often 5-9 people) with all the skills needed to deliver a certain outcome. In HR, a squad could include an HRBP or subject matter expert, a data analyst, a content designer, maybe a software developer or HRIT person, a HR ops specialist and even an end-user representative. They are empowered to make decisions and are accountable for a certain employee journey or HR product.

For example, consider a “Performance & Feedback Squad.” It might have an HR performance management expert, an HRIT specialist (to configure the performance management system), a data person (to analyze performance scores or sentiment), a communications rep (to help with messaging and training), and perhaps a couple of managers or employees (as advisors or rotating members to give real-world perspective).

This squad’s mission could be “make our performance review process more continuous and impactful.” They would then break that into deliverables (maybe “introduce quarterly check-ins” as one, “roll out a new feedback app” as another, etc.), prioritize them, and work on them in sprints.

Story Pointing and Backlogs

A practice from Scrum (one agile framework) is to use “story points” to estimate effort on tasks (stories) relative to each other.

While HR might not need to get overly technical with point systems, the concept of maintaining a prioritized backlog of work is extremely useful. Instead of a static project plan, agile HR squads maintain a living list of user stories – e.g., “As a new employee, I want a single checklist for my first week so that I feel confident I did everything,” or “As a manager, I want guidance on delivering difficult feedback so I can handle those conversations better.”

Each story is sized for effort (maybe using a simple point scale or T-shirt sizing like S, M, L). During sprint planning (say every 2 weeks or monthly), the squad pulls a feasible number of top-priority stories into the sprint and commits to delivering them. This could mean developing a solution or even a small experiment.

For instance, in one sprint, the onboarding squad might take the story “new employee needs one-stop info” and create a prototype onboarding portal page.

Story points help the team gauge how much they can do in a sprint and improve their predictability. Over time, HR teams might find, for example, that their velocity is 20 points per sprint, so they plan accordingly. It’s a different way of working for HR, but it keeps everyone focused and not overcommitting to too many projects at once (a common issue in HR – trying to do 50 things and finishing none).

Iterative Delivery and Feedback

Perhaps the biggest shift in agile HR is the mindset that “we’re never truly done – and that’s okay.”

You deliver in small increments, gather feedback, and iteratively refine. This is contrary to the traditional HR approach of striving for a perfect, comprehensive solution then implementing it big-bang (often to discover too late that it doesn’t work as intended).

Agile HR encourages piloting, testing, and learning.

For example, instead of revamping the entire performance management system across the whole company at once, an agile approach might pilot a new feedback approach in one division for a quarter, see the results (maybe 30% more feedback exchanges happened – good, but quality was an issue?), learn from it, and then adjust before scaling up.

This way, mistakes are smaller and caught earlier, and successes can be amplified.

It’s a very user-centric approach because you’re always incorporating input. Many organizations that adopted agile HR report outcomes like faster response to business needs and increased employee engagement because HR is seen as more responsive and interactive.

The iterative mindset also fosters a culture of continuous improvement in HR – teams are always looking for what to refine next, rather than resting on the laurels of last year’s project.

Agile Ceremonies and Tools in HR

To embed agile, HR teams often adopt some of the standard practices: daily stand-up meetings (a quick 15-minute check-in each day for the squad to synchronize and surface blockers), sprint reviews (demonstrating what was accomplished to stakeholders or even a sample of employees to gather feedback), and retrospectives (reflecting on what went well and what to improve in the team’s process).

These ceremonies help maintain transparency and collaboration. It might feel a bit foreign in HR at first (“Why are we meeting daily?!”), but it actually often reduces the need for other meetings and long email chains because everyone stays in sync.

As for tools, HR squads use project tracking tools like Trello, Jira, or Asana – configured in a simple way – to manage their backlogs and sprints. They also might use design tools (Miro boards for journey mapping, etc.) to collaborate visually, especially if team members are remote.

A subtle but powerful outcome is that agile practices break down hierarchy. In a squad stand-up, it doesn’t matter who’s the HR VP and who’s the junior analyst – everyone just reports on their tasks and issues, equally. This can be very energizing and “leveling” for HR teams, reinforcing a culture of trust and openness.

Introducing Agile HR into the Organization

To embed these ways of working, some companies create an Agile HR Academy or coach program. It helps to train HR staff on agile principles and maybe certify a few Scrum Masters within HR who can facilitate teams.

Starting with a few squads (as in the pilot approach above) and having them act as ambassadors to the rest of HR is a good strategy.

Also, don’t force every part of HR to go agile if it doesn’t fit – for example, payroll might need more reliability and less experimentation (you don’t “sprint” running payroll). So a concept called “ambidexterity” might apply: parts of HR that are more operational remain in a steady, continuous improvement mode (using lean principles to tweak efficiency), whereas parts that are more transformational or experience-focused run in agile mode.

Over time, though, the mindset of quick iteration and user feedback can permeate even the operational areas (e.g., a payroll team could still do mini-experiments like testing a simpler payslip design in one location).

Agile Beyond HR, in HR

It’s worth noting that as HR adopts agile, it often parallels what the rest of the company might be doing (especially if the company is undergoing a digital transformation).

HR can actually lead by example here. If HR becomes more agile, it’s better positioned to support business agility – because HR processes (like hiring, performance, learning) won’t be the bottleneck when the company needs to shift direction quickly.

A recent conversation among CHROs highlighted that HR needs to accelerate to keep up with the business and avoid hindering rapid transformation. Agile working is a means to that acceleration.

Real-world evidence

Does agile HR really pay off? According to case reports, yes – when implemented thoughtfully. One European bank’s HR team, after going agile, was able to deliver HR initiatives in roughly half the time it used to take and significantly improved internal client satisfaction.

Another company found that agile HR teams improved the quality of solutions because of constant stakeholder input, leading to higher adoption of HR programs.

There is also the cultural benefit: HR folks often find their work more meaningful and engaging when they see quick progress and can experiment (no more spending 8 months crafting a program only to get lukewarm reception – instead, you get continuous feedback).

That said, agile is not a panacea; it comes with challenges. HR Executive magazine points out that agile HR must be accompanied by good change management and won’t work everywhere (source: HR Executive magazine).

Highly regulated environments or very traditional cultures might resist agile methods. It’s important to tailor the approach – sometimes a hybrid works, taking core agile principles (flexibility, collaboration, frequent feedback) without all the jargon or rituals if those would clash with your culture.

Employee Co-Creation as Part of Agile

A distinctive piece we highlighted is involving employees in design – this is very much aligned with agile’s customer-centric ethos (where employees are the customers of HR).

Co-creation sessions can be integrated into agile workflows, for example, having an employee sounding board that the squad demos to during sprint reviews, or even including a few employees in time-bound squad roles. This ensures agile HR doesn’t become insular. The employees in turn feel heard and become champions of the changes.

It’s a virtuous cycle: employees help make HR better, and because HR services get better, employees are happier and more engaged, often translating into better customer service and business performance.

In fact, there’s a known linkage – happy employees tend to create happy customers. Over 90% of employees say that their experience at work directly impacts how they serve customers. So, agile HR isn’t just internally beneficial; it’s ultimately a business competitiveness issue too.

To summarize, embedding agile in HR means fostering a culture of speed, collaboration, and user focus. It entails new team structures (squads), new planning methods (backlogs over rigid plans), and a comfort with iterative change.

For senior HR leaders, it might mean letting go of some control – empowering junior team members to make calls in their squads, or tolerating some “small failures” as teams experiment (knowing these lead to learning). But the payoff is an HR function that can continually adapt and improve, which in today’s environment is priceless.

When HR itself becomes agile, it’s better equipped to support an agile organization. And agility plus alignment on employee experience is a formidable combination – it means HR can deliver changes that actually resonate with people, quickly and reliably.

Conclusion: Designing Tomorrow’s HR – Cost-Effective and People-Centric

The HR operating model of tomorrow isn’t a rigid framework or a one-size template – it’s a mindset shift backed by a clever blend of structures. We’ve seen that by balancing efficiency and experience, HR can escape the old trade-offs.

No longer do we have to choose between a cost-effective HR and a loved HR; with the right model, we get to have our cake and eat it too. How?

Through a hybrid approach that brings together the best of multiple worlds: the scalability of shared services, the agility and creativity of cross-functional squads, the power of AI and automation to handle the drudge work, and the wisdom of employees themselves to co-create solutions.

We critically examined why the status quo – Ulrich’s pillars, GBS mega-centers, over-standardized processes – is creaking under modern pressures. The answer is not to bash those models (they had their time and benefits), but to evolve beyond them.

The future HR model is more networked and fluid, yet underpinned by strong digital backbone and data discipline.

It’s an HR organization where an “employee experience” ethos is at the center of every policy, every service, every interaction – without losing sight of efficiency metrics. In fact, we’ve seen evidence that focusing on experience can boost financial results and efficiency in tandem (e.g., consistent EX leading to twice the financial performance, or AI enabling more personalization at scale with significant cost savings).

Turn Vision into Action

It really is about squaring the circle by using technology and new ways of working to achieve what used to be impossible: better service at lower cost.

Practically, we laid out a roadmap. It’s clear that transforming the HR operating model is a strategic journey requiring top-level commitment and grassroots involvement.

From setting the vision, redesigning the org structure, piloting new concepts, to retraining staff – each step is crucial. A key takeaway for any leader is not to neglect the change management and cultural aspects.

Because moving to agile, or trusting AI, or inviting employees into HR’s inner workings – these are big cultural shifts as much as operational ones. But with the right tone (human, intuitive, energetic leadership – very much in line with Applaud’s own ethos of being human-centered), HR can lead by example in how to drive change collaboratively.

We also got a glimpse of how HR roles are reinventing themselves. This can be inspiring: operations folks becoming tech-savvy AI supervisors, policy experts turning into design thinkers, experience gurus anchoring agile teams – it paints a picture of an HR career that is far more dynamic and impactful.

No doubt, there will be growing pains. Some HR professionals will need to unlearn habits and pick up new tricks. But HR has always been about people and adaptability – and now it’s time to apply that inward on ourselves as a function.

The roles and skills discussion should reassure leaders that investing in their HR talent (through reskilling) is absolutely worth it. An empowered HR team that embraces data, design, and agility will elevate the whole organization.

Finally, we explored agile ways of working in HR not as a theoretical idea but as something concrete: stand-ups, sprints, MVPs, and continuous feedback becoming part of the HR rhythm. This is perhaps one of the biggest shifts in the operating model – moving from a bureaucratic cadence to an innovative one. It’s a shift from “plan → execute → forget” cycles to “ideate → try → learn → adapt → repeat” loops.

And importantly, it’s doing so with the employees, not locked away in an HR ivory tower. The image to hold onto is HR folks and employees sitting on the same side of the table, solving problems together, supported by intelligent systems that handle the grunt work.

Designing the HR operating model of tomorrow is not about chasing shiny objects or doing change for change’s sake. It’s about fundamentally aligning HR to what the business and the workforce need in a fast-changing world – efficiency, flexibility, and a great experience.

Organizations that crack this code will gain a competitive edge in talent attraction, retention, and productivity. Those that don’t may find their rigid HR structures becoming a liability. As one CHRO put it, there’s no silver bullet and no one blueprint – but there is a set of principles and innovations we can draw on, and an imperative to act.

Now’s the Moment

The time for HR transformation is now. By proactively redesigning your operating model with both efficiency and experience in mind, you position HR not as a cost center to be optimized, but as a value-driving function that delights employees and accelerates the business.

It’s a balancing act, yes – but with the ideas in this chapter, you have a balancing pole in hand.

As you take the next step on your transformation journey, remember to keep one foot on solid proven practices and the other stepping into new territory like agile and AI.

That’s how you’ll keep your balance on this high wire and make it safely – and successfully – to the other side: the future of HR.

How Applaud Helps You Make It Happen

At Applaud, we believe employees are a company’s most important customers. That’s why our technology is built entirely from the employee’s point of view—delivering more human, intuitive, and rewarding HR experiences that empower HR teams to do more for their people.

If you’re ready to turn employee-first HR from vision to reality, we’re here to help. Get in touch to see how Applaud can transform your HR Service Delivery and create a workplace where employees truly thrive.

About the Author

Duncan Casemore is Co-Founder and CTO of Applaud, an award-winning HR platform built entirely around employees. Formerly at Oracle and a global HR consultant, Duncan is known for championing more human, intuitive HR tech. Regularly featured in top publications, he collaborates with thought leaders like Josh Bersin, speaks at major events, and continues to help organizations create truly people-first workplaces.