Ulrich’s Three-Legged Model

The Ulrich’s three-legged model of HR was given in the ‘Human Resource Champions’ book
by Dave Ulrich in 1997. The three-legged model is also called ‘three-legged stool’ and ‘three
box model’. This contemporary HR model structure resembles a ‘3-legged stool’ as it focuses on
three pillars of HR, which are as follows [ CITATION Iai14 \l 1033 ]:
1. Business Partners: The HR business partners are considered generalists as they are
expected to be able to advise on the entire spectrum, from payroll queries to
organizational design [ CITATION NIg15 \l 1033 ]. Their functions include:
a. Establish relationships between customers and line / business units
b. Contribute to business unit plans and participate in developing the line business
strategy for an assigned sector and share responsibility for its overall performance
c. Act as a line business advisor on issues regarding HR to line
managers[ CITATION Sal16 \l 1033 ]
d. Ensure that HR solutions add customer-focused value in line with business
strategies

2. Centers of Excellence: The centers of excellence consist of deep-skilled and experienced

HR practitioners who are the thought leaders for appropriate people
practices[ CITATION Rob \l 1033 ]. The most common expertise areas are training and
development, recruitment, reward and employee relations [ CITATION The19 \l 1033 ].
Their functions include:
a. Create framework and conduct employee performance reviews[ CITATION Sal16
\l 1033 ]
b. Develop and maintain human resource policies and strategic HR initiatives
c. Offer further value on other often complex issues such as internal mobility,
accommodation and relocation, allowances and policies in global
organizations[ CITATION NIg15 \l 1033 ].

3. HR Shared Services: Much of what HR shared services centers do is administrative in

nature and may be outsourced[CITATION Rob \l 1033 ]. Their functions include:
a. Perform the payroll function and manage all related systems
b. Manage routine processes, transactional services and employee
records[ CITATION Sal16 \l 1033 ]
c. Often use a single HRIS (Human Resource Information System), intranets, to
provide basic information and call centers for specific queries
A simplified summary of the three branches of HR in Ulrich’s model can be as follows:
Shared service activities should be concentrated in a call-center with supporting intranet to
provide administrative and basic support functions to the remainder of the business. Business
partners, in contrast, are individuals or small teams who work closely with the managers of
business units on key initiatives and change management. Finally, centers of excellence exist as
repositories of key technical knowledge on resourcing, reward, employment relations, etc. and
can develop policy while providing support to business units and to shared services[ CITATION
Oxf19 \l 1033 ].

Research Findings on the Model

The Orion Partners study:
In 2015, alternative investment and asset management firm ‘Orion Partners’ conducted a survey
on 40 global organizations with a combined responsibility for 2.5 million employees to analyze
the impact of Ulrich’s three-legged model on their HR services. 50% of these companies
invested heavily to implement the Ulrich’s three-legged model for HR. Though the
implementation of the model resulted in visible success and benefits to many organizations, the
model was still in the ‘work in progress stage’[ CITATION Ori05 \l 1033 ]
It has been difficult to implement the model in organizations which have a large number of
employees (more than 10000) and have operations in multiple countries (with a few exceptions,
one of which is discussed in “practical implementations” section). For example, Capgemini, a
multinational IT and business consulting corporation, faced difficulties in making the centers of
excellence relevant to 41 countries[ CITATION Jen16 \l 1033 ].
Some organizations have also willingly avoided using the Ulrich model. One of those companies
operated an extensively franchised model in which the majority of staff were not employees of
the company but rather freelancers[ CITATION Ori05 \l 1033 ].
The Ulrich model, over the years, has been subject to some hostile reactions. Although a
majority (77%) of large organizations had a positive impact on their HR services[ CITATION
Ori05 \l 1033 ] using this model, 63% of HR businesses partners say they still retain “too much”
transactional activity[ CITATION Mam14 \l 1033 ]
This may not be a flaw in the three-legged model but simply a matter of negligence or
misunderstanding of the organizations that try to implement the model. For instance, business
partners were introduced in various organizations without even starting or outsourcing the shared
services. As a result, Business partners were required to perform a large portion of the
transactional activity[CITATION NGA \l 1033 ].
A research conducted into HR delivery systems by Centre for Performance-led HR (CPHR)
further strengthens the above argument by showing that 64% of the organizations have HR
Business partners, whereas, 46% have service centers[ CITATION Hir09 \l 1033 ].Along with
that, research shows that very few HR professionals and consultants read the original work and
even fewer actually keep themselves updated with the changes brought to the model, the latest
being in 2012[ CITATION NGA \l 1033 ].
Challenges with the model:
There are some challenges with the three-legged model that needs to be addressed before
deeming the model effective or ineffective:
a. The HR functions/departments specified by the Ulrich’s model is separate and specific in
theory, but in practice they overlap, causing businesses to consider a separate HR service
strategy as futile or an unnecessary expense.
b. Inability of HR Business partners, in convincing senior managers that they have the
necessary business acumen to contribute, to the strategic debate (Deloitte Report, 2009)
c. A long period of time to show its cost-effectiveness and overall impact. Initial cost of
purchasing HR technology or setting up different departments and out-sourcing of routine
HR tasks like Shared service, seems high and therefore makes it more difficult to
convince a company to consider the effectiveness of this model based on a long-term
perspective[ CITATION Rev19 \l 1033 ]

Practical Implementations of the Model

GlaxoSmithKline plc:
British pharmaceutical company GlaxoSmithKline plc has been implementing all the three
aspects of Ulrich’s three-legged model. GSK claims to be enjoying the following benefits after
extensively applying the three-legged model [ CITATION Phi19 \l 1033 ]
1. The company has seen remarkable economies of scale through the centralization of HR
service delivery and has achieved cost efficiency through shared service practices.
2. The senior HR partners at GSK work as strategic business partners which enables greater
global traction in
a. talent and succession planning
b. leadership development
c. performance management
T-System:
German global IT services and consulting company T-System has been benefiting from the
model because they could effectively use the centers of excellence and shared services
[ CITATION Jen16 \l 1033 ]. Furthermore, due to the small number of staffs at T-System, it was
deemed more effective to outsource the shared services. The following functions have been
outsourced
a. payroll and benefits
b. training and development
c. recruitment
by outsourcing these functions, the amount of resources invested in HR decreased while the
efficiency and effectiveness of the shared services increased, leading to overall increase in
productivity of the organization.
Vodafone:
Vodafone is one of the world’s leading telecommunications company and this company is highly
dependent on people. They have spent large amounts of resources to understand their employees
on a deeper level. Vodafone is operating in 9 countries and has moved towards the Ulrich’s
three-legged model in all of these companies. There is a HR Director in each of these companies
along with [ CITATION Hir09 \l 1033 ]
 Generalist HR practitioners (also called HR business partners or HR BP): The HR BP
works with a leadership team and also to manage the business lines
 The centers of excellence team never interacts with a business line without the full
knowledge of the BP
 HR shared service centers that delivers the HR services to the business lines
Part of the role of the European HR Director is to create an annual agenda; every year, each
HR Director will work with the CEO to develop their budget and planning locally.

Conclusion
When Ulrich’s three-legged model has been properly implemented, it has shown to give the
organization massive benefits over time. Those benefits include
 increased productivity
 increased enforcement of HR policies
 better crafting of HR policies
 more accurate HR shared services
 reduced costs in the long run.
Many organizations have implemented the three-legged model but failed to see any benefits,
rather they have seen an increase in costs and inefficiencies. The increase in costs and
inefficiencies can be attributed to the failure of the organization to
1. Define a proper HR framework with the three-legged model such that responsibilities are
clear and efforts are not duplicated
2. Implement all 3 parts of the model. Most organizations that failed only implemented one
or two parts of the model
3. Use the model as a guide which needs to be tailored to the organization. Most cases of
failure were because the model was implemented directly without any modifications
4. Wait for gains in the long run.
Although it is true that Ulrich’s three-legged is complicated and expensive to implement, the
gains that come from using this model in the long run far outweigh the costs. Furthermore, from
the practical implementations section of this paper we can see that the model can be used on
organizations in
 different industries
 different sizes
 operating in different countries.
It should be noted that the model needs to be specifically modified for each of the different
scenarios mentioned above.
After all dimensions are considered, Ulrich’s Three-Legged Model is indeed effective when used
in the proper way.
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