Quick answer: An HR operating model is how the people function is organised to deliver its services: which roles exist, what work sits where, and how HR, line managers and technology share the load. The most common model is the three-legged stool of shared services, centres of excellence and strategic business partners. CIPD research shows many organisations are now adapting it, so the right model depends on your size, complexity and what the business needs from HR.
Many HR restructures change the organisation chart and little else. New titles appear, business partners are appointed, and a year later the same people are still processing letters and chasing payroll inputs. The operating model was copied, not designed.
This guide explains what an HR operating model is, how the classic three-legged model works, where it struggles, what emerging models look like, and how to choose one. It draws on CIPD research and is written for CHROs, CFOs and HR Directors in the UAE, Saudi Arabia and the wider GCC. It follows our guide to the strategic HR framework.
Table of Contents
What is an HR operating model?
The CIPD frames the question as “how the HR function should be organised to serve organisations and their people – both now and in the future.” In practice, an HR operating model answers five design questions:
- Services: what the people function delivers, and to whom.
- Structure: which teams and roles deliver each service.
- Channels: what is self-service, what goes to a central team, and what needs a specialist.
- Technology and data: which systems hold people data and run processes.
- Governance: who decides, who approves, and how performance is measured.
The three-legged HR operating model
The CIPD describes the “three-legged stool” as the most common model that has been implemented, and notes that “The original business partnering model was conceived by Dave Ulrich in the late-1990s.”
| Component | What it is (CIPD) | Typical work |
|---|---|---|
| Shared services | “usually a centralised service group that handles routine ‘transactional’ services” | First-line support and administration: recruitment admin, payroll, absence monitoring |
| Centres of excellence | “usually small teams of HR specialists delivering solutions, projects, and programmes” | Reward, learning and development, recruitment, talent management |
| Strategic business partners | “experienced people professionals who work closely with business leaders or line managers” | Advising leaders on people solutions and connecting them to the right HR services |
The CIPD’s shared services factsheet adds that shared services “are seen as supporting strategic business partners and centres of expertise”, which is the logic of the model: route routine work to one place so specialists and partners can focus on higher-value work.
Where the three-legged model struggles
In a 2024 CIPD article, Rebecca Peters set out common criticisms of how the model is applied, including:
- “one-size-fits-all, rigid and inflexible structures” that ignore the business context
- business partners leaning towards delivering more operational HR, leaving little capacity for strategic work
- “detached and fragmented specialist functions and skillsets, leading to siloed working”
- services that lack personalisation and an employee-centred focus
The CIPD business partnering factsheet adds practical risks: low stakeholder commitment, gaps in responsibility between teams, the fact that not everyone is suited to the partner role, and partners becoming trapped in routine casework. It also advises organisations to “consult with the business to define the right way of working” rather than imposing a model.
Emerging HR operating models
The same CIPD article summarises how others describe where HR operating models are heading:
| Source (as cited by CIPD) | Model or finding |
|---|---|
| McKinsey | Five archetypes: Ulrich+, agile, employee experience-driven, leader-led and machine-powered. 48% of people leaders said their current model aligns with Ulrich+, and 47% with employee experience-driven |
| Gartner | 84% of HR functions have restructured in the last two years, are restructuring, or plan to; business partners become strategic talent leaders supported by an agile pool of problem-solvers |
| Josh Bersin Company | A “systemic” model of integrated teams using real-time data; only 11% of businesses were found to have systemic HR functions (2023) |
| Perry Timms | “HR 3.0”, based on product management thinking and multidisciplinary teams |
The common thread, in the CIPD’s summary, is a need for greater impact, multidisciplinary talent pools in place of function-based teams, employees treated as key stakeholders, and more agile, flexible models.
How to choose the right HR operating model
In our view, the model should follow the size and complexity of the organisation, not the latest label. A practical starting point:
| Organisation profile | Typical starting model | Watch out for |
|---|---|---|
| Under about 150 employees, single entity | Small generalist team; payroll and specialist work bought in | One person holding all people data and decisions |
| About 150 to 1,000 employees | Generalists plus one or two specialists (often reward and talent); central administration | Specialists pulled back into daily casework |
| Larger or multi-entity groups | Three-legged model or an Ulrich+ variant, with a shared service hub | Duplication across entities and unclear ownership |
| Groups operating across several GCC countries | Common policies and job architecture, country-level compliance delivery | One-country rules applied to another country’s payroll |
Whichever model you choose, design it around the services the business needs first, then the roles. The CIPD’s advice to co-create the model with the business, use data to design and measure it, and build a roadmap with milestones applies to every option.
HR operating models in the GCC
In our experience across UAE and Saudi organisations, three features shape the operating model more than in many other markets:
- Compliance-heavy transactions. Payroll, the UAE Wage Protection System and Saudi GOSI contributions carry hard deadlines and penalties, so shared services or outsourced payroll need strong controls, not just low cost.
- National workforce targets. Nationalisation requirements make workforce planning and reporting a core capability, not an add-on.
- Multi-entity groups. Many groups run several legal entities, so the model must separate group-wide design, such as job architecture and reward policy, from entity-level delivery.
For organisations formalising their HR system, ISO 30201 (Human resources management systems — Requirements) is relevant. ISO states that it “specifies requirements for a human resource (HR) management system” and applies to organisations of all sizes and sectors, but that it does not define an organisation’s strategies or objectives.
Common mistakes when redesigning an HR operating model
- Copying a model without the business case. The CIPD warns against rigid, one-size-fits-all structures.
- Renaming roles without moving work. Business partners stay operational if transactional work has nowhere else to go.
- Ignoring line managers. Self-service and manager capability decide how much work reaches HR.
- Treating technology as the model. A new HR system automates the current model, good or bad.
- No measures. Without service and impact measures, nobody can tell whether the redesign worked.
Frequently asked questions about HR operating models
What is the HR Operating Model?
An HR operating model is how the people function is organised to deliver its services: which roles and teams exist, what work sits where, which tasks are self-service, how technology and data are used, and who makes decisions. The most common version is the three-legged model of shared services, centres of excellence and strategic business partners.
What are some important HR management models?
For organising the HR function, the best-known model is the three-legged stool associated with Dave Ulrich. Variants described in CIPD research include Ulrich+, agile, employee experience-driven, leader-led and machine-powered models, as well as systemic and product-based approaches. No single model fits every organisation.
What is the difference between HR and HR operations?
HR covers the whole people function, from strategy and workforce planning to reward, development and employee relations. HR operations is the part that runs day-to-day processes accurately, such as onboarding, contracts, payroll inputs, records and HR administration. In a three-legged model, much of it sits in shared services.
Go deeper: The Human Resources Discipline
This guide covers how to organise the people function. My book The Human Resources Discipline: A Modern Framework for Organizational Excellence treats HR as one connected management system, linking work design, capability, reward, performance, governance and data into decisions that execute business strategy. For the transactional backbone of any model, see Payroll Process and Compliance. Both are in the RewardEdge Publications library.
Redesigning how HR, reward and payroll work together? RewardEdge designs reward structures and runs governed payroll for organisations in the UAE and Saudi Arabia. See our managed payroll service or describe your challenge.
Sources
- CIPD (September 2025). Business partnering factsheet. Accessed October 2026.
- CIPD (December 2025). Shared services factsheet. Accessed October 2026.
- Peters, R. (June 2024). Do current HR operating models serve future needs? CIPD. Accessed October 2026.
- CIPD (June 2024). HR operating models. Accessed October 2026.
- International Organization for Standardization. ISO 30201: Human resources management systems — Requirements. Accessed October 2026.
This article is general information for HR and business leaders, not legal advice. Third-party figures are as reported by the CIPD; see the original sources for methodology.
About the author: Muhammad Ahsan Mehboob is the founder of RewardEdge Consulting, a CIPD-certified reward practitioner with an MBA in Banking and Finance and more than ten years of compensation and benefits experience across the UAE, Saudi Arabia and the wider GCC. More about the author · Books by the author
