Agile HR: Guide to Leaner, More Flexible Workforce Planning

The ability to adapt quickly to change is becoming a competitive advantage in today's business landscape. For HR departments, Agile HR offers a powerful way to stay ahead by fostering a more flexible and efficient approach to managing people. This guide will introduce the key concepts of agile HR and explains how adopting these practices can help your business remain agile, innovative, and strategically aligned. 

What is Agile HR?

‘Agile’ is a project planning and execution methodology born in the software development world but whose success has seen it blossom and spread into all kinds of functional areas, including Human Resources.

Unlike traditional project management approaches that emphasize rigid planning and sequential phases, Agile methods aim to enhance flexibility, efficiency, and responsiveness to change. The formal Agile Manifesto, created in 2001, outlines values and principles like customer collaboration over contract negotiation, responding to change over following a plan, and individuals and interactions over processes and tools.

In the world of software, Agile has produced stellar results for its adherents. Nearly all (91%) software teams have adopted or intended to adopt the methodology, according to consultancy firm KPMG. No wonder: organizations with a ‘strong agile culture’ see benefits like 277% (nearly triple!) improved commercial performance.

That kind of outperformance has naturally attracted attention from other groups, like HR. In fact, surveys suggest that around one in six (16%) HR departments have adopted some form of Agile practice, and even more are clearly interested. A Gartner survey found that nearly two-thirds (63%) of HR leaders are taking steps “to be more agile.”

That begs the question: is it worth your HR function’s time?

Dealing with Inefficiency in HR

Instead of leaning on more traditional lengthy, rigid HR processes and policies, Agile HR tries to minimize waste and center HR management around employee relations. Operationally, Agile HR usually sees HR teams working in short cycles, known as sprints, to address specific tasks or projects. This method allows for regular feedback, quick adjustments, and a more dynamic response to changing business needs and employee demands. Key components of Agile HR include cross-functional teams, regular feedback loops, and a focus on delivering value incrementally rather than through one-off, large-scale projects.

Agile HR appeals to many HR leaders because there are typically numerous areas of inefficiency within the HR function that stand ready to benefit from Agile practices. These include:

Too much emphasis on transactional HR over strategic HR:

Traditional HR often gets bogged down in routine administrative tasks like payroll processing, benefits administration, and compliance management. This focus on important but transactional tasks can detract from strategic HR initiatives such as talent development, organizational culture enhancement, and workforce planning. “[Only] two out of every five HR leaders believe their function separates transactional and strategic tasks appropriately,” reports So, many HR groups hope to use Agile methodologies to give personnel more space and resources to focus more on high impact strategic issues.

Poor resource allocation to HR tasks:

Resources in HR departments are frequently misallocated, with too much time and effort spent on low-value activities and insufficient focus on value-generating efforts. This imbalance can lead to inefficiencies and reduced overall impact. Worse, as many as two-thirds of HR departments continue to invest time and resources in projects or initiatives that no longer align with organizational goals or that have outlived their usefulness. This persistence can waste valuable resources and hinder more relevant, high-impact projects.

Too much rigidity in HR policies and procedures:

Inflexibility can stifle innovation and adaptability. In a rapidly changing business environment, the inability to quickly adjust HR practices can be a significant disadvantage. Some researchers have even found a link between flexibility (agility) in the HR function and overall organizational outcomes: “Human resource (HR) flexibility has also shown promising impact on firm performance.” By emphasizing flexibility via Agile practices, HR can help improve business outcomes.

Does Agile HR really work?

In general, Agile methodologies seem to work well even outside of software development. One research review of Agile HR published last year argues that Agile HR is “unleashing organizational effectiveness.” It found that Agile practices increase both operational efficiency and employee engagement by 30%. They ease change management and decision-making by simplifying processes, while fostering a culture of innovation and boosting productivity.

That said, Agile HR is not going to be the right fit for every business. It can potentially represent a huge cultural shift that may face resistance or outright rejection from leaders or specific functional units. In fact, Agile practices aren’t necessarily as simple to implement in practice as they sound in theory. As a result, HR team members may need training and development in how to implement the new practices, which can consume time and resources that may not be available.

Finally, Agile methodologies involve tradeoffs (just like any planning or project management system). For example, under Agile HR, organizations may risk becoming too focused on short-term iterations (sprints) at the expense of long-term strategic planning.

How HR Can Become More Agile

Fortunately, adopting Agile isn’t an all-or-nothing prospect, and some HR teams may choose to adopt certain Agile practices and not others. The only question is how. “While there is a growing consensus among HR leaders that HR should become more agile, there is an overall uncertainty about how to effectively apply the principles to HR,” says Caroline Walsh, vice president in the Gartner HR practice. “Recent Gartner research found that 78% of HR leaders have neither a defined strategy nor outcomes in place to guide their application of agile in the function.”

So, that’s the place where most organizations should begin exploring Agile HR: by defining the outcomes they want to achieve and plotting a strategy to achieve those results. Some potential benefits to shoot for might include:

1. Enhanced Strategic Focus: By automating or streamlining transactional tasks through Agile practices, HR departments can redirect their efforts towards strategic initiatives.

2. Improved Resource Allocation: Agile HR promotes continuous prioritization and re-prioritization of tasks based on value and impact, so HR resources are always focused on high-priority, high-value activities.

3. Timely Project Termination: Agile HR encourages regular review and assessment of ongoing projects, so HR can quickly identify and discontinue projects that no longer provide value.

4. Increased Collaboration and Communication: Agile HR fosters cross-functional collaboration and regular communication, breaking down silos and encouraging more effective problem-solving.

Altogether, by adopting Agile practices, HR departments can become more efficient, responsive, and strategically aligned with organizational goals. While Agile HR practices won’t fit every situation, the potential benefits make it a compelling option to consider for any HR leader looking to enhance their department’s impact and effectiveness.

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