The Ulrich model is the idea that HR should be organised around the value it delivers to the business rather than around its activities. Dave Ulrich of the University of Michigan set it out in Human Resource Champions (1997) and described four roles HR must play: strategic partner, administrative expert, employee champion and change agent. Companies turned those roles into a structure, usually called the three-pillar model or "three-legged stool": HR business partners who work with leaders, centres of expertise that design policy, and shared services that run transactions. Many large employers, including most Japanese subsidiaries of global companies, are organised this way today.
The four roles
Ulrich drew the roles on two axes: whether HR's focus is strategic or operational, and whether it works on processes or on people.
| Processes | People | |
|---|---|---|
| Strategic, future-focused | Strategic partner: aligning HR with business strategy | Change agent: helping the organisation change |
| Operational, day-to-day | Administrative expert: running HR processes efficiently | Employee champion: listening and responding to employees |
The argument was that HR had concentrated on the bottom row and needed to deliver all four. In a Harvard Business Review article the following year, "A New Mandate for Human Resources" (1998), Ulrich put it more bluntly: HR should be defined by what it delivers, not by what it does.
From roles to the three-pillar structure
The four roles are not an organisation chart. The structure most companies adopted grew out of putting the roles into practice in the late 1990s and 2000s. It is popularly called the Ulrich model, though Ulrich did not present it as a model of his own:
| Pillar | What it does | Typical roles |
|---|---|---|
| HR business partners (HRBPs) | Work alongside business leaders on organisation, talent and change | HRBP, senior HRBP, HR director for a division |
| Centres of expertise (CoEs) | Design policy and programmes in specialist areas | Reward, talent, learning, people analytics, employee relations |
| Shared services | Handle transactions and enquiries at scale | HR operations, payroll, HR service centre, often offshore or outsourced |
Ulrich and Wayne Brockbank developed the thinking in The HR Value Proposition (2005). Ulrich did not set out the three pillars as such: as the CIPD has noted, Human Resource Champions proposed a differentiation of HR activity, and companies built the three-pillar structure from it. In his own later writing Ulrich describes the parts as service centres, centres of expertise and embedded HR generalists.
The HR business partner
The HRBP is the most visible result of the model. An HRBP is assigned to a business unit and is expected to understand its strategy, advise its leaders on people decisions and draw on the centres of expertise and shared services to deliver. The role sits between HR and the business, which is both its value and its difficulty: good HRBPs are among the hardest HR hires to make, because they need business judgment as well as HR knowledge.
In Japan, the title HRBP has spread with foreign companies and with Japanese groups moving to global HR structures. In a traditional Japanese company, the closest equivalent was the personnel department's close control of transfers and promotions across the company, which is a different kind of influence.
Criticisms
- Business partners pulled back into administration. When shared services are weak, HRBPs end up answering policy questions and fixing payroll problems, and the strategic role never arrives.
- Gaps between the pillars. Employees and managers do not know whom to ask; work falls between the HRBP, the CoE and the service centre.
- Too much distance from employees. Shared services and portals made HR efficient but impersonal. The "employee champion" role is the one most often neglected.
- Structure taken for strategy. Reorganising into three pillars does not by itself make HR strategic.
Later versions of Ulrich's work added roles such as HR's responsibility for culture, technology and analytics, and the focus shifted to outcomes: talent, leadership, organisation and HR's own effectiveness. Newer operating models, such as those built around skills or product-style HR teams, are usually described as changes to the three pillars rather than replacements.
The model in Japan
Large Japanese companies traditionally ran a powerful central personnel department (人事部) that hired graduates, rotated them across functions and decided promotions. That model concentrated what Ulrich would call strategic and administrative work in one place. The three-pillar structure arrived with foreign companies and with Japanese groups standardising HR globally, often alongside a move to job-based employment (ジョブ型雇用). Many Japanese companies now have HRBPs in name, while promotion and transfer decisions still sit with the central department.
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Questions
What is the Ulrich model?
An approach to organising HR around the value it delivers. Dave Ulrich's Human Resource Champions (1997) described four roles HR must play: strategic partner, administrative expert, employee champion and change agent. Companies turned these into the three-pillar structure of HR business partners, centres of expertise and shared services.
What are the three pillars of HR?
HR business partners, who work with business leaders; centres of expertise, which design policy in areas such as reward and talent; and shared services, which handle transactions and enquiries.
What does an HR business partner do?
An HRBP works alongside the leaders of a business unit on organisation, talent, performance and change, and draws on specialist teams and shared services to deliver. The role is meant to be advisory and strategic rather than administrative.
Is the Ulrich model still relevant?
Most large organisations are still structured around it. The criticisms are mostly about implementation: weak shared services that drag business partners back into administration, and gaps between the pillars. Newer operating models usually adapt the three pillars rather than replace them.
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By Yan Sen Lu, Managing Director of Makana Partners and Editor of The Hardest Market.
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