Structure of the HR Function at Enterprise Scale
3
Model Components
Shared services COEs HRBPs
4
Outsourcing Options
RPO BPO PEO ASO
1
Key Question
What should HR own vs outsource
The Three-Pillar HR Operating Model
The modern enterprise HR function rests on three pillars. Shared services handle high-volume transactional work (payroll, benefits, HRIS). Centers of Excellence provide deep expertise (compensation, talent acquisition, L&D, analytics). HRBPs sit embedded in business units, translating strategy into people action. The SCP designs the HR operating model that best serves the business strategy. The ratio and structure of these three components varies by organizational size, complexity, geographic spread, and strategic priorities.
Outsourcing Decisions and HR Effectiveness
RPO (recruitment process outsourcing), BPO (business process outsourcing), PEO (professional employer organization), and ASO (administrative services organization) each serve different needs. The SCP evaluates outsourcing through a strategic lens: what is core to competitive advantage stays internal, what is commoditized can go external. Measuring HR effectiveness requires operational metrics (cost per hire, time to fill), strategic metrics (quality of hire, internal mobility rate), and stakeholder satisfaction scores.
practice HR operating model scenarios
SCP-level SJIs on structure design, outsourcing strategy, and HRBP effectiveness
Practice HR Structure QuestionsExam Traps
context drives structureOne HR model does not fit every organization
The Ulrich model (shared services, COEs, HRBPs) works at enterprise scale but may not suit a 200-person company. The SCP designs the operating model that matches organizational size, complexity, strategy, and maturity. Context determines structure.
HRBPs need business acumen, not just HR skills
An HRBP who cannot read a P&L, interpret financial statements, or speak the language of their business unit is an HR generalist with a different title. The SCP ensures HRBPs are business leaders who happen to specialize in people strategy.
Outsource transactional work, keep strategic functions internal
Payroll processing, benefits administration, and background checks are strong outsourcing candidates. Workforce planning, culture development, and leadership assessment stay internal. The SCP draws this line based on strategic value, not just cost.
Strategic SJI Angle
Company doubled in size but HR structure has not changed. The SCP conducts an operating model assessment: evaluating current HRBP ratios, shared services capacity, COE coverage gaps, and outsourcing opportunities. They design a scalable structure aligned to the new organizational complexity. The trap answer simply adds more HR generalists. The strategic response redesigns the architecture.
Context Determines Structure
Do not copy another company's HR model. Design the operating model that serves YOUR business strategy, size, and complexity.
Strategic Stays Internal
Outsource the transactional. Keep workforce planning, culture, and leadership development where the institutional knowledge lives.
The prep kitchen handles high-volume, standardized work. Chopping vegetables, portioning ingredients, stocking stations. Efficient, consistent, scalable. This is payroll, benefits enrollment, HRIS administration.
The pastry chef, sushi chef, and grill master each bring deep expertise in their domain. COEs in compensation, talent acquisition, L&D, and analytics provide specialized knowledge that generalists cannot match.
Floor managers connect the kitchen to the diners. They understand what the kitchen can produce AND what the customers need. HRBPs translate between HR expertise and business unit reality.
The executive chef designs the kitchen layout, hires the right specialists, decides what to make in-house versus outsource, and ensures every dish serves the restaurant's brand and strategy.
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