What Works Best for Business: Centralized or Decentralized HR?

The debate over whether it is better to have a centralized Human Resources system or a decentralized one is eternal. Centralized has its benefits in scalability, consistency and standardized metrics, whereas decentralized has the edge in customization, speed and adaptability. Brandon Hall Group research has shown a consistent back-and-forth of dominant ideologies, with no sign that one or the other will ever go away permanently.

Which of the following best describes your HR service delivery model?

Without the centralized administration of HR, changes to regulatory or internal business practices could be applied haphazardly and inconsistently across local offices. Yet, having a centralized system also means that local customs, preferences, schedules and culture are often ignored, which hampers the ability of organizations to grow and support employees globally.

Decentralized departments have more localized control and services can be targeted to their specific needs, and policies and procedures can have greater flexibility depending on what is needed within that department. There’s also an efficiency advantage because many department heads oversee their own HR services, which divides the work among several employees.

However, decentralization also produces an inconsistent experience for employees across the organization, which means it is nearly impossible to maintain a homogenous culture.

Centralization can significantly lower costs since a small group supports many employees, but that also means they won’t have the input and reinforced feedback from multiple locations or departments to create solutions needed specifically for those areas.

For an organization to decide whether to adopt a centralized or decentralized approach, it must first consider its specific business needs. Key questions HR organizations should address include:

• What is the overall level of HR maturity at your organization and how will that impact any sweeping changes?

• What does your organization see as the main function of HR and how does HR view your employees (as internal customers, as production units, etc.)?

• Who should be accountable for making the final decision on how HR should be structured?

• What level of resources, in terms of time and money, are available for HR support at your organization and how will that affect HR service and delivery?

• How will you measure the relevant outcomes of your HR model and what red flags should you be on the lookout for?

Centralized, decentralized and hybrid models each have strengths and weaknesses, and there is no way to make that determination by size or industry. It depends upon your organization’s culture and goals.


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Brandon Hall Group Strategy Briefs answer the critical questions learning, talent, HR and business leaders must address to manage their human capital. To tackle these critical questions in more detail, we built tools, frameworks, research summaries and business builders based on up-to-date research and case studies for you to implement best and next Human Capital Management (HCM) practices. To gain access to these valuable resources, contact [email protected].

Leading minds in HCM choose Brandon Hall Group to help them build future-proof employee-development plans for the new era. For more than 27 years, we have empowered, recognized and certified excellence in organizations around the world, influencing the development of over 10,000,000 associates and executives.

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Mike Cooke

Chief Executive Officer of Brandon Hall Group Mike Cooke Prior to joining Brandon Hall Group, Mike Cooke was the Chief Executive Officer and co-founder of AC Growth. Mike held leadership and executive positions for the majority of his career, at which he was responsible for steering sales and marketing teams to drive results and profitability. His background includes more than 15 years of experience in sales, marketing, management, and operations in the research, consulting, software and technology industries. Mike has extensive experience in sales, marketing and management having worked for several early high-growth emerging businesses and has implemented technology systems to support various critical sales, finance, marketing and client service functions. He is especially skilled in organizing the sales and service strategy to fully support a company’s growth strategy. The concept of growth was an absolute to Mike and a motivator in starting AC Growth, in order to help organizations achieve research driven results. Most recently, Mike was the VP and General Manager of Field Operations at Bersin & Associates, a global analyst and consulting services firm focused on all areas of enterprise learning, talent management and talent acquisition. Tasked with leading the company’s global expansion, Mike led all sales operations worldwide. During Mike’s tenure, the company has grown into a multi-national firm, conducting business in over 45 countries with over 4,500 multi-national organizations. Mike started his career at MicroVideo Learning Systems in 1992, eventually holding a senior management position and leading all corporate sales before founding Dynamic Minds. Mike was CEO and Co-Founder of Dynamic Minds, a custom developer of software programs, working with clients like Goldman Sachs, Prentice Hall, McGraw Hill and Merrill Lynch. Also, Mike worked for Oddcast, a leading provider of customer experience and marketing solutions, where he held a senior management position leading the company into new markets across various industries. Mike also serves on the Advisory Board for Carbon Solutions America, an independent sustainability consulting and carbon management firm that specializes in the design and implementation of greenhouse reduction and sustainability plans as well as managing the generation of carbon and renewal energy and energy efficiency credits. Mike attended University of Phoenix, studying Business Administration and Finance. He has also completed executive training at the Chicago Graduate School of Business in Chicago, IL.

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