Human Resources Decentralization

Human Resources Decentralization – agility, retention, and growth

João Simões de Abreu, August 13, 2021

The digital transformation brought a different perspective on how to grow businesses and foster internal communication, automate processes and develop workflows that are clear to everyone. Although digitizing organizations is an instrumental part of scaling, structures can become too big to be tamed by central human resources departments that want to keep following their people’s day-to-day needs. Moreover, in the remote-first reality leveraged by the pandemic, keeping up with everyone is an additional challenge.

Say, for instance, collecting information and evaluating an employee’s performance and respective career development while also dealing with tasks such as subsistence allowance, remote attendance, and approving the proposed holidays. Such responsibilities are possible for human resources professionals when they are part of a small-sized organization. The operational tasks do not take much of their time, and they can do it reasonably easily.

However, once the structure grows, these activities become a burden that will deviate the human resources department from its strategic tasks. In the long-term, aligning the human capital with the business activities might fall in the list of priorities since more pressing matters are constantly arising.

Hence, growing pains and remote working are why human resources decentralization is a rising trend among the most competitive organizations.

What is human resources decentralization?

Human resources decentralization implies the transfer of administrative power and responsibility from the central unit. That is, instead of having one main office, you delegate the human resources tasks to – depending on the organizational nature – leaders from individual departments, business units, or branches.

The operational tasks that leaders from units outside the human resources department embrace heavily depend on the company’s structure.

Foster personal relationships

As a company grows, it is harder to establish personal relationships among leaders and employees. One could argue relationships outside the workplace are not meaningful for business outcomes. Still, leaders must understand what drives their people to do their best work and keep them motivated.

Transferring some human capital management power to leaders, who often spend the most time either working (whether in-person or remotely) or outside the workplace with their people, will drastically increase the knowledge on how a company can help each individual grow, how to retain the best talent and what changes must occur to make their employees brand ambassadors.

Quicker answers

Decentralizing the power will also translate into a faster response.

This not only applies to subordinates’ operational needs, such as holidays approval, but also a swifter action to both local or departmental needs.

For instance, if leaders need to recruit new people to their local team, they may start the process of locating and interviewing new talent without waiting on authorization from a central hiring authority. This way, agility fuels the decision-making process, which is now more dependent on the people who spend the most time with the employee rather than from higher functions in the corporate structure.

Self-service for employees

It is also important to note that, in this decentralized reality, managers do not take every single operational task. Employees also have an essential role in helping their leaders with some of the errands. That is the case with updating their personal information on the intranet, submit the time worked and leaves, and enter claims.

This way, everyone’s responsible for their own needs, and the possible misinformation problems are remote.

Local empowerment – either geographical or structural-wise – enables organizations to promote a better environment, stimulates better relationships among employees and leaders, lets human resources specialists focus on where they add the most value, and ultimately leads to more sustainable and swifter growth.

However, decentralization also poses its challenges. Effort duplication, efficiency, and department leaders using different workflows are just three of the many hurdles a company might face when embracing a decentralized strategy.

To make human resources decentralization a hassle-free reality, your organization must adopt a future-ready software that can adapt to your structure. Quidgest enables this through a seamless solution that is quick to change and learn – just like today’s exciting times’ demand.

Contact us for more information regarding our Human Resource Management system and implement technology that benefits your most important asset: your People.

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