The Next Frontier in Employee Relations Organization Design: HR Effectiveness Consulting Point-of-View Series

Employee Relations: The Next Frontier

In today’s complex workplace and active social media environment, many organizations are facing new employee relations (ER) risks. While traditional legal challenges persist (e.g., discrimination, harassment, wrongful terminations), new challenges brought on by global growth and social bottom line.

In light of this, many organizations are examining their ER support models not only to reduce reputational and litigation risk, but also to proactively manage outcomes and address trends before they culminate in broader workforce engagement issues.

The following challenges are contributing to this dynamic environment, resulting in increased risk:

  • Inconsistent ER services and processes. HR commonly provides ER support in a decentralized model, with HR field personnel supporting local managers. This results in issues being addressed in a highly inconsistent variability in approaches.
  • Uneven manager capability. Managerial capability at many organizations varies greatly. Managers are often ill-prepared to proactively address issues before they turn into problems, and they are not well trained in how to appropriately document and manage poor performance or behavioral issues, which can result in corrective actions.
  • HR alignment and employee advocacy. Unintended consequences have resulted from HR functions transitioning from a traditional HR model supporting managers/employees toward a business partner model aligned to business leaders. In an attempt to secure a seat at the table, HR has moved away from its role as employee advocate, leaving a vacuum.
  • Centralization of HR resources. Many HR functions have continued to centralize resources, dramatically reducing their local/field HR personnel. In the absence of a face-to-face presence, HR struggles to keep the pulse of the workforce. 
  • Mobile devices and social media. The emergence of new technologies such as smartphone and social media platforms has created a conundrum for many organizations seeking to find a balance between corporate culture and the need to protect their business interests. Many struggle to design and implement sensible, consistent, and enforceable policies for the use of technology and social media.
  • Lack of monitoring and targeted interventions. Most organizations do not actively track ER issues or monitor trends, missing the opportunity to systemically address issues. Inconsistent practices and ER cases. In-house legal departments are more often placing higher value on knowledge and documentation than on focusing on exposure. They want to know:
    • What types of issues are on the rise? 
    • Do we have trends within a particular business unit or region? 
    • Are certain managers struggling more than others?
    • Is there an opportunity to deliver targeted ER training to managers? 
    • To address these issues and reduce risk, organizations are increasingly exploring centralized ER models.

Managers struggle to keep up with the employment law experts. HR is taking an active role to provide just-in-time guidance as the need arises.

Providing support requires being familiar with legislation that details the federally protected categories, rights, and activities recognized by federal labor and employment law, including:

  • Title VII of the Civil Rights Act of 1964. Prohibits discrimination due to race, color, religion, sex, and national origin. 
  • The Americans with Disabilities Act. (ADA) and ADA Amendments Act (ADAAA). Prohibits discrimination against qualified employees or job applicants due to a disability, association with someone disabled, or because the employer sees an employee as disabled, even if he or she actually is not.
  • The Age Discrimination in Employment Act (ADEA). Prohibits discrimination against employees age 40 and older.
  • The Equal Pay Act (EPA). Prohibits gender-based pay discrimination between men and women performing similar roles. 
  • The Family and Medical Leave Act (FMLA). Prohibits discrimination against pregnant women and parents, as well as employees with serious health conditions.

Employee Relations Center of Expertise

Centralized ER is not a new idea; historically, many organizations have had centralized support for policy oversight and escalated ER different in several ways.

  • Breadth of services. ER COEs are moving beyond a singular focus on policy enforcement to proactively supporting employees and managers by:
    • Coaching managers on more complex behavioral issues before they have an impact on performance
    • Monitoring case types and performing analytics to identify trends and root causes
    • Providing targeted interventions to reduce and improve manager capability and reduce risk to the organization (e.g., making managers more independent in administering performance improvement plans)
  • Depth and breadth of experience. ER remains a foundational capability for well-rounded HR professionals; however, with increased complexity and risk, it is no longer merely a quick rotational stop for future HR leaders. 
    • Many of the skills and capabilities required to be successful in ER today are not found in a textbook. They are built over time and, as such, must become part of a thoughtful career path and development plan for the HR professional. Rather than positioning ER as a brief rotational stop for future HR leaders, the most effective ER COEs have an intentional mix of experience levels and skill sets. 
    • Effectively dealing with ER matters has always required a balance of relevant labor and employment knowledge and employee advocacy skills. While these capabilities remain important, new skills in data and analytics and a bias for action are now critical to success
  • Innovations in service delivery. As a delivery-oriented COE, ER is able to significantly benefit from shared service concepts and tools. 
    • No longer is ER limited to a physically colocated function. The new collaboration and knowledge-haring tools available today have led many organizations to implement hybrid models that take advantage of local resources in larger locations, while also leveraging the benefits of a centralized pool of resources. 
    • Utilizing case management tools, ER COEs have been able to track current cases, monitor employee/manager history, and conduct trend analysis to identify areas of growing concern. Moreover, effective use of case management tools can help ensure consistency in practices and provide important data in legal defenses.
    • The expanded breadth of services provided today has required ER COEs to rethink how work gets done. In particular, new tiered service models that differentiate support based on the complexity and/or sensitivity of the issue are being utilized to more efficiently and effectively manage the function. Common tiers of service delivery include: 
      • Tier 1 Providing answers to routine policy questions 
      • Tier 2 Manager policy exceptions, coaching managers, managing workplace accommodations
      • Tier 3 Conducting investigations, developing policies, and coordinating with legal counsel
    • The tiered service model requires the ER COE to employ staff with varying levels of knowledge and skills to align them to the most appropriate level they can support. 

The following are case studies highlighting how three companies navigated the transition to an ER COE.

Healthcare Services Company

Size: 30,000 employees globally

Rationale for Change: As part of a broader HR transformation effort to shift to more consolidated services, a centralized ER COE was created to drive consistency and leverage the scale of the organization.

Background: Issues were initially assigned to the ER team based on capacity, but after several months of feedback, it could be seen that a lack of business unit knowledge was undermining service effectiveness. 

The function was centrally located, with nine team members possessing deep expertise in ER; as its scope was expanded, two virtual team members were added. Intake was performed primarily over the phone with an email alternative. When the ER COE members were unavailable, the HR service center performed intake and relayed the intake to the ER COE by email.

COE Scope of Services and Objectives

Serves as a day-to-day ER support for managers in order to reduce the amount of time spent by HR business partners on ER matters including:

  • Corrective actions
  • Higher-level policy interpretation
  • Performance improvement plan counseling
  • ADA accommodations process

Lessons Learned and Keys to Success

  • Division of responsibility – performing a RACI (responsibility assignment matrix) analysis was critical to ensuring effective interactions and handoffs between the ER COE and the HR business partners.
  • Trend monitoring – trend reports communicated to the business and HR business partners early in the process uncovered manager training needs that were proactively addressed.
  • Ongoing coordination and information sharing weekly status calls were instituted to keep the HR service center, HR business partners, and safety function abreast of both individual and business unit issues.

Results and Revisions

Eventually each business unit, the ER leads were assigned to each line of business. Capacity and overflow were managed as needed on the back end.

Financial Services Company 

Size: 60,000 employees globally

Rationale for Change: The ER model was redesigned as part of a global HR transformation project intended to improve the HR services customer experience and drive greater consistency in HR roles and processes.

Background: The ER COE was set up as a global organization divided into regions and functions. A hub-and-spoke model was used with resources deployed in larger countries to ensure local knowledge:

  • Employees’ Tier 0 issues (information on HR policies and processes) was presumed to have been self-serviced by an HR portal and its associated knowledge base. 
  • At Tier 1, ER issue intake was performed by and handled by a global HR shared services group.
  • Any Tier 2 issues received by the shared services group were automatically escalated to any one of 77 ER COE specialists. 
  • In cases where ER issues affected senior business leaders, the ER COE engaged line HR members who were concerned about losing touch. Additionally, the COE gave line HR the ability to refer cases directly to the COE.

COE Scope of Services and Objectives

  • Provide ER/Labor Relations (LR) COE support in markets not currently supported by onsite HR personnel
  • Develop and drive global ER/LR strategy, practices, and policies across all markets
  • Define global policies, processes, and service delivery model for global severance processing and employment checks and verifications

Lessons Learned and Keys to Success

  • Implementation – it was a significant effort to define, train, and drive consistent global practices and processes, and it took more time than was anticipated.
  • Skepticism – it was imperative to address concerns from line HR (especially in Europe) regarding the
  • Staffing – adjustments in staffing levels needed to be made to coincide with the changing volume and service levels of issue intakes.

Results and Revisions

A post go-live review was performed after six months of stabilization. In addition, several additional dedicated resources were deployed in countries with significant works council or organized labor activities.

Professional Services Firm

Size: 32,000 employees in North America

Rationale for Change: An ER COE was adopted to improve the consistency and quality of service delivery.

Background: The ER COE is made of up of 32 resources, all virtual, who are a centrally organized group reporting up to the Vice President of HR. All intakes are completed through an online form. Each request is reviewed and assigned to ER advisors based on capacity or, at times, on specialty. A case management tool is used to track each case and its resolution:

  • The service level agreement for cases is 48 hours to respond to a manager or an employee.
  • 68 percent of issues are Tier 1 “one-call resolutions” (consuming 25 percent of COE time).
  • The remaining 32 percent are Tier 2 and 3 issues (consuming 75% of COE time).

COE Scope of Services and Objectives

  • Support separations, including counseling managers
  • Offer performance management counseling, including corrective actions/discipline
  • Provide support for escalated leave of absence (LOA) issues
  • Consult on base pay and pay cycles
  • Assist in position elimination administration
  • Conduct exit interviews
  • Manage unemployment claims
  • Respond to ADA accommodation requests

Lessons Learned and Keys to Success

  • Scope creep – making it challenging to secure enough resources to ensure sustainable service levels.
  • Access – customers had difficulty understanding whom to contact for what services, which resulted in a significant number of inquiries about benefits and payroll issues.
  • Limited-access channel – having only an online form and no phone access to resources initially got negative reactions.
  • Credibility and quality – resources were recruited from those members of the existing HR generalist the perceived reliability of the COE model and enabled the ER COE to perform quality services immediately.

Results and Revisions

Over time, managers became familiar with the process and experienced the responsiveness of the ER advisors. The resulting COE design allowed for a more scalable model to adapt to the business’s growth strategy and improve cost savings.

Moving Forward

Implementing or reinventing a successful ER center of expertise requires thoughtful planning and excellent execution. By following these steps, you will be on the road to success: 

Begin by Understanding the Business Case

Make sure you understand what you’re solving for. Are you trying to improve compliance? Drive consistency? Reduce costs? Clearly articulate the need and then translate this need into language that resonates with the business. Business leaders need to know what value will be delivered. If the impact terms of cost avoidance. The prevention of one lawsuit can add millions to the bottom line.

Based on the business case, summarize key objectives that can serve as design principles throughout the design and implementation process.

Clearly Define Your Scope of Services

When you use the term “employee relations”, what does this mean in your organization? It’s critical to define what will not be provided. Clearly defining scope is essential to all subsequent service delivery model decisions, including staffing. 

Some organizations choose to define scope narrowly (e.g., performance improvement, corrective action counseling, conducting investigations), while others handle broader policy questions, ADA accommodation requests, and leave of absence support. The breadth of services will not only determine who your customers are (employees, managers, HR), but also your staffing levels and the capabilities that will be required.

When developing a new ER COE, it’s always better to define the scope narrowly and then take on new services as the model stabilizes. 

Detail the Service Delivery Model

  • The service delivery model should include an articulation of how the ER COE will be structured to interact with its customers. This includes:
  • Identifying who the customers are (e.g., managers, employees, HR, executives, third parties)
  • The channels that will be used for each customer group (e.g., phone, email, chat)
  • The organization of the work and how the team will provide services (e.g., colocated, virtual, divided into specialties)
  • Alignment with the business (e.g., general pool, regional alignment, business unit alignment)
  • Technology requirements (e.g., telephony, case management, knowledge management)

Do not underestimate the importance of having adequate technology support. A case management tool is a must. It enables your ER COE to track cases to completion and enables you to examine trends, understand root causes, and formulate appropriate interventions (e.g., manager or HR training).

Perform a Thoughtful Staffing Analysis

There are two aspects to the staffing model – the capabilities required and the number of resources (referred to as “staffing levels”. Your scope of services will dictate the capabilities required, and the features of your service delivery model (specialties and business alignment) will influence the number and level of these resources. You should gather as much internal data as possible about ER activities in your organization – this will be critical to establishing the right number of resources. External ER staffing benchmarks can also be used to gauge the right level.

Pay Attention to Ongoing Governance

Establish an approach from the beginning that ensures the ER COE has ongoing touch points with field HR (e.g., HR generalists or HR business partners), and with HR operations or shared services. This enables you to address issues as they arise and work through coordination issues that you cannot anticipate. Those who establish this partnership from the beginning tend to have a smoother transition and wider acceptance of the model.

Be Prepared to Adjust

After implementation and following a period of stabilization, expect that you will need to make adjustments. The most common areas of adjustment are:

  • Staffing levels
  • Mix of resources (e.g., senior advisors vs. junior advisors, intake coordinators)
  • Business alignment approach (e.g., moving from a general pool to a business unit-aligned pool of resources, or vice versa)
  • Governance within HR
  • Reporting needs that are targeted to a variety of stakeholders (HR leadership vs. business leaders vs. managers)
  • Scope of services


Many organizations have resisted centralizing ERs for fear of losing touch with their workforce. The reality is that in most industries, both the workforce and the way we work have changed. As a result, centers of expertise provide a better alternative to delivering ER services in a decentralized and often inconsistent manner. Through thoughtful design of a service delivery model, with the right staff levels and capabilities, your HR organization can deliver value in the form of reduced costs, higher-quality service, and risk avoidance.

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