The 10 Most Important HR Models to Know in 2025

The field of human resources (HR) is constantly evolving. As the nature of work and the workforce changes over time, so must the policies, practices, and strategies that HR leaders employ. Having a clear understanding of some of the most widely used HR models provides a strong foundation for managing this transformation effectively.

In 2025, the following 10 HR models are essential for HR professionals and human resource leaders to comprehend if they want to optimize their organization’s talent, culture, and business outcomes.

1. The HR Value Chain

The HR Value Chain is a framework that emphasizes the connection between overall business strategy and HR strategy, focusing on how HR functions can create value for the organization. This concept is based on the work of Jaap Paauwe and Richard Richardson (1997), who explored the strategic alignment between HRM and organizational performance. It is made up of five elements that create value for the business when executed well:

• HR Strategy: The high-level plan and mission for managing talent in the organization. It outlines the overall goals and direction for HR programs.
• HR Services: The transactional programs, processes, and systems that HR runs. This includes things like payroll, benefits administration, and HRIS systems.
• HR Resources: The infrastructure, staffing, budgets, and technology that enables HR to operate. Resources are necessary for delivering HR services and strategy.
• HR Management: The talent management practices for recruiting, developing, compensating, and managing people in the organization. This covers key programs like hiring, training, performance reviews.
• HR Results: The metrics and dashboards that demonstrate the impact of HR on business performance. HR results show how HR strategy and programs influence organization success.

This model emphasizes the importance of outcomes over operations. HR leaders must show how investments in people ultimately drive positive business results by boosting productivity, profitability, and other success measures.

2. The Advanced HR Value Chain

Jon Ingham is widely regarded as the principal architect of the Advanced HR Value Chain. In his 2006 book, Strategic Human Capital Management, Ingham introduced this refined framework to build on traditional HR value chain models. His approach emphasizes integrating strategic human capital management with business goals, showcasing how HR practices can drive measurable value and achieve organizational success. There are four main links:

Acquire

The Acquire stage focuses on processes related to bringing new talent into the organization. Key activities in this stage include:

• Employer branding: Building an employer brand that attracts top talent by highlighting the organization's culture, values, and employee experience.

Metric example: Employer Net Promoter Score (eNPS).

• Sourcing: Identifying potential talent pipelines through various channels like employee referrals, job boards, social media platforms etc.

Metric example: Cost per hire.

• Recruiting: Managing the end-to-end recruitment process including screening applicants and scheduling interviews.

Metric example: Time-to-hire.

• Selection: Assessing candidates through interviews, assessments, reference checks to select the best fits.

Metric example: Selection ratio (number of hires/number of applicants).

Develop

The Develop stage aims to build the capabilities of talent within the organization after they have been acquired. Key activities here involve:

• Learning: Providing training programs, e-learning modules, on the job learning opportunities to nurture skills.

Metric example: Training completion rate.

• Training: Conducting specialized trainings as per functional or behavioral needs.

Metric example: Training ROI.

• Coaching: Assigning coaches and mentors to guide employees' professional growth.

Metric example: Coaching impact score (post-coaching performance improvements).

• Mentoring: Matching mentees to senior leaders to gain insights and advice.

Metric example: Mentee satisfaction rate.

Engage

The Engage stage focuses on culture, inclusion and analytics to enhance the employee experience. This includes:

• Culture: Fostering an engaging culture centered around ethics, collaboration and recognition.

Metric example: Employee engagement score.

• Inclusion: Building diverse and inclusive teams across levels through fair policies.

Metric example: Diversity index (representation across demographics).

• Surveys: Conducting periodic surveys to gather employee feedback.

Metric example: Response rate to engagement surveys.

• Analytics: Tracking KPIs around satisfaction, turnover, absenteeism to derive insights.

Metric example: Employee turnover rate.

Retain

The retain stage aims to motivate talent to continue their association with the organization. This requires:

• Compensation: Benchmarking and optimizing salary and benefits.

Metric example: Pay competitiveness ratio (internal pay vs. market pay).

• Rewards: Recognition programs, bonuses and incentive plans.

Metric example: Employee recognition participation rate.

• Career paths: Providing visibility into advancement opportunities.

Metric example: Internal promotion rate.

Strong performance across all links leads to a talented, motivated workforce that fuels the organization’s competitive position. This model guides HR professionals in identifying gaps and opportunities in their people management practices. The Advanced HR Value Chain is particularly relevant as it supports organizations in addressing challenges like managing remote workforces and fostering diversity and inclusion, ensuring HR practices remain agile and aligned with modern business needs.

3. The Harvard Model of HRM

Developed in 1984 by Michael Beer and his colleagues at Harvard University, this model provides a comprehensive framework for HRM by linking HR policies and practices to organizational performance. The Harvard Model of Human Resource Management emphasizes HR’s role in supporting overall business objectives and strategies. There are four components:

Stakeholder interests

The Harvard Model recognizes that there are various stakeholders in an organization that have interests that impact HR policy choices. Key stakeholders include:

• Shareholders: Interested in profits, share price, dividends.
• Management: Interested in business growth, productivity, efficiency.
• Employees: Interested in fair compensation, job security, opportunities.
• Unions: Represent employee interests like better pay and benefits.
• Government: Sets laws and regulations around hiring and employment.
• Community groups: Concerned about corporate social responsibility.

Situational factors

There are various external and internal situational factors that influence HR policies:

• Business conditions: The overall state of the economy which impacts hiring and jobs.
• Labor market: The supply and demand of talent which affects recruiting.
• Laws: Employment, discrimination, health and safety laws.
• Social trends: Cultural shifts around work-life balance, diversity, etc.
• Technology: Changes in automation, digitalization affecting jobs.
• Competition: Competitive pressures which impact talent retention.

HRM policy choices

HR policies need to be designed while considering situational factors and stakeholder interests. Key HR policy areas include:

• Communication: Channels for information sharing with employees.
• Hiring: Recruitment sources and selection processes.
• Training: Employee development programs.
• Compensation: Pay, benefits and rewards.

HR outcomes

When HR policies are aligned to stakeholder needs and external realities, positive outcomes result:

• Commitment: Engaged and dedicated employees.
• Competence: Skilled and capable workforce.
• Cost-effectiveness: Efficient HR operations.
• Congruence: HR strategy fits with organizational goals.

This framework ensures HR decisions consider the full context and impact on stakeholders. It leads to policies aligned with external/internal environments.

4. The Warwick Model of HRM

Developed by Chris Hendry and Andrew Pettigrew, two researchers at Warwick University, the Warwick Model focuses on the theoretical aspects of how HRM drives business performance and competitive advantage. It has four key components:

Business Strategy and Conditions

This component refers to the overall strategic direction and objectives of the business. It is influenced by internal and external conditions such as organizational culture, leadership, market dynamics, technology, laws and regulations etc. The business strategy sets the context for HR strategy.

HRM Strategy and Policies

Based on the business strategy, key HRM strategies and policies are formulated regarding recruitment, selection, training, compensation, performance appraisal etc. The aim is to develop HR systems and practices that are aligned with business priorities and goals. For instance, recruitment and training policies aim to build a skilled, high-performing workforce.

HRM Outcomes

When HR strategies and policies are effectively executed, it leads to tangible HRM outcomes such as:

• High employee productivity.
• Increased skills and competencies.
• Positive organizational culture.
• High levels of employee engagement and commitment.

These desired HRM outcomes are instrumental in shaping employee behaviors and performance.

Performance Outcomes

The right HRM strategies and outcomes ultimately aim to improve performance and competitiveness. Key business performance outcomes include:

• Enhanced operational efficiency
• Improved quality
• Higher productivity
• Increased agility and flexibility
• Sustained competitive edge

This linear model shows how an integrated HRM strategy leads to positive organizational and financial outcomes through investments in areas like selection, appraisal, rewards, and development.

5. The Ulrich Model

Dave Ulrich’s HR model, developed in 1996, aims to redefine the scope and responsibilities of HR professionals to be strategic partners rather than just administrative support. The roles are:

Administrative Expert

The administrative expert role focuses on overseeing and streamlining HR processes and operations. This includes managing essential HR functions like payroll, benefits administration, compliance, and recordkeeping. The administrative expert utilizes metrics and data analysis to identify areas for improvement in HR programs and workflows. They aim to maximize efficiency and minimize costs associated with routine HR transactions.

Employee Champion

As an employee champion, the HR professional seeks to promote and safeguard the interests of the workforce. This encompasses managing programs related to employee engagement, health and safety, diversity and inclusion, and overall job satisfaction. The employee champion gathers feedback from employees, addresses concerns, and serves as an advocate for the workforce. They strive to nurture positive relationships between management and employees.

Change Agent

The change agent drives organizational transformation initiatives that evolve company culture and support business goals. They collaborate with leadership and staff to diagnose needs, formulate solutions, and spearhead the implementation of new policies, processes, or technologies. Change management, training, and communication represent some key focus areas for the HR change agent.

Strategic Partner

In the strategic partner role, HR aligns its priorities and activities with the organization's overarching mission and objectives. This involves actively collaborating with executive leadership to develop talent management strategies, predict workforce trends, and identify opportunities to gain competitive advantages. As a strategic partner, HR provides data-driven recommendations and guidance to optimize human capital investments and productivity.

This framework for the HR function allows it to balance tactical work with big-picture planning and input to the C-suite around talent strategy.

6. The 5P Model of HRM

The 5P’s HRM Model is a comprehensive framework for strategic HRM created by Randall S. Schuler in 1992. Schuler, an internationally renowned scholar, specializes in global HRM, strategic HRM, and the critical role HRM plays within organizations. This model emphasizes the alignment between business strategy and HRM, providing a structured approach to ensuring that HR policies and practices effectively contribute to organizational performance and strategic goals. It outlines five layers for organizing and managing HR:

Philosophy

The philosophy refers to the guiding principles, values and organizational culture that drive HR strategy and practices. This includes the vision, mission, values, ethics and overall beliefs that shape how a company approaches talent management. Defining the philosophy sets the foundation for the policies, processes, practices and performance metrics used in managing human resources.

Policies

Policies refer to the formal rules, standards and governance structures put in place that regulate HR functions. This includes workplace policies, compensation rules, codes of conduct, compliance regulations, and other guidelines that provide a framework for making talent-related decisions. Setting clear and fair policies enables consistency, accountability and strategic alignment of HR activities.

Processes

Processes encompass the workflows, procedures and methods used to execute HR operations. This covers activities like recruitment, training, performance management, and other programs. Well-designed processes improve efficiency, enhance the employee experience and help achieve desired talent outcomes.

Practices

Practices refer to the informal guidelines and customary activities carried out in managing employees on a daily basis. While policies provide the formal rules, practices reflect how those rules are applied. Ensuring alignment between policies and actual practices is key for an effective HR strategy.

Performance/People

This component focuses on the outcomes, results and targets that the HR function aims to accomplish. Key performance indicators relate to workforce productivity, engagement levels, retention rates, hiring metrics and other benchmarks for evaluating the impact of HR policies and practices. The ultimate goal is to positively contribute to overall business performance through people.

With robust alignment across these elements, HR helps promote the achievement of desired organizational and talent results. It’s a systemic approach.

7. The 3G Model

The 3G model divides HR activities into three groupings:

• Growth: Activities driving strategic progress like workforce planning and capability development.
• Guardianship: Maintaining governance, ensuring legal/regulatory compliance.
• Guidance: Helping employees understand policies, practices, expectations.

This simple framework ensures HR balances its different priorities from a big-picture view. Growth activities spur innovation, guardianship defends against risk, and guidance supports understanding.

8. High-Impact HR Operating Model

This model focuses on elevating HR’s capabilities and service quality by structuring the function around four elements:

• HR Customers: Centering experiences for managers, employees, candidates.
• Digital Workplace: Technology, tools, and analytics boosting efficiency.
• Workforce Insights: Data analysis revealing trends and opportunities.
• Fluid Operating Model: Flexibility, agility, connectedness.

With robust design across these areas, HR can have greater strategic influence and impact on the organization.

9. The Employee Value Chain

The Employee Value Chain is an HR framework that examines how various talent management practices connect to boost workforce and organizational performance. This model consists of four core pillars:

• Employee Attraction: This refers to the employer branding, recruiting, and hiring processes used to bring new talent into the organization.
• Employee Development: This pillar focuses on continually developing employees' skills after they have joined the company.
• Employee Retention: Companies retain top talent by fostering an engaging, supportive work culture.
• Performance Enablement: Ultimately, stellar attraction, development and retention strategies enable employees and teams to excel.

When done effectively across these four pillars, the employee value chain creates a talent engine that powers superior individual and organizational performance over the long-term.

10. The 4-C HR Competency Model

This model, developed by Susan R. Meisinger, former President and CEO of the Society for Human Resource Management (SHRM), was introduced in her 2005 Human Resource Management article titled "The Four Cs of the HR Profession: Being Competent, Curious, Courageous, and Caring About People." This framework defines four core competencies enabling HR professionals to perform effectively:

Credible Activist

The credible activist competency focuses on developing business acumen, analytical skills, and influencing capabilities in HR professionals. This involves understanding the organization's competitive context, financial position, operations, and strategy. Credible activists use data and analytics to provide insights and recommendations to business leaders. They build relationships with stakeholders across the organization to influence decision-making related to people and organizational issues.

Capability Builder

As a capability builder, HR focuses on coaching, developing, and empowering leaders across the organization. This means assessing development needs, designing leadership training programs, providing individual coaching, and giving leaders the tools to manage their teams effectively. Capability builders empower leaders with HR knowledge and tools for talent management, enabling them to execute HR-related responsibilities.

Change Champion

The change champion competency focuses on leading organizational change initiatives. This requires HR professionals to be agile, adaptive, and comfortable with ambiguity. As change champions, they assess and anticipate evolving workforce trends and needs. They lead projects related to transforming organizational culture, structure, or work practices. Change champions maintain morale and engagement during transitions and help embed changes.

HR Innovator/Integrator

As an innovator and integrator, HR leverages technology and data to provide insights. This includes expertise in HR information systems, analytics, and digital platforms to deliver efficient and smooth HR operations. Innovators/integrators use technology and data skillfully to enhance programs, capture efficiencies, and measure impact. They also integrate HR initiatives with business goals and strategies to align people outcomes with organizational objectives.

Cultivating these competencies empowers HR staff to facilitate strategic growth and cultural transformation.

Case Studies

The following are some case studies:

Deloitte's Journey to High-Impact HR

As a leading professional services firm, Deloitte recognized the need to transform its HR function to have more strategic impact on the business. Historically, HR was focused on administrative tasks and service delivery, but the leadership team knew that HR needed to play a bigger role in driving workforce and talent strategy.

Embracing the High-Impact HR Operating Model

In 2016, Deloitte formally adopted the High-Impact HR Operating Model to guide the transformation of its HR organization. This blueprint enabled HR to shift from a function of "service delivery" to one that drives strategic workforce, talent, and business outcomes.

The High-Impact Model has four core components:

• HR Customers at the Center: Workforce personas were developed to deeply understand the needs of employees across the employee lifecycle. Moments that matter were identified to improve experiences.
• Digital Workplace: Advanced technologies were implemented to enable productivity, collaboration, and automation virtually anywhere. The focus was on an intuitive, personalized experience.
• Workforce Insights: Meaningful workforce data was linked to business performance to enhance data-driven decision making and provide predictive insights.
• Fluid Interaction Between HR Components: Silos were broken down to enable seamless coordination across HR teams and functions.

Implementing Design Thinking

Deloitte applied a design thinking approach to implement this model in an iterative way. The first step was gaining a deeper understanding of the HR customer through workforce personas. Next, capabilities were elevated around digital readiness, agility, and analytics. The digital workplace was enhanced by prioritizing mobile-first solutions. And workforce data and metrics were strengthened to provide more meaningful insights to the business.

The High-Impact Model was adapted to fit Deloitte's culture and ways of working. Rather than taking a "one-size-fits-all" approach, the components of the model were customized while retaining the core philosophies.

Impact on Business Performance

Within two years of adoption, Deloitte's High-Impact HR transformation led to tangible improvements in business performance, including:

• Increased speed in adapting to market changes.
• Faster introduction of new service offerings.
• Improved talent attraction and retention.
• Higher employee engagement scores.
• Enhanced operational efficiency.
• Greater competitive differentiation.

The workforce insights and personas developed by HR also directly informed strategic decisions around entering new markets and expanding service lines.

By showing up differently and focusing on the moments that matter most in the employee lifecycle, High-Impact HR strengthened Deloitte's business and brand.

Lessons Learned

Deloitte's HR transformation revealed key lessons for organizations aiming to achieve High-Impact HR:

• Adopt a customer-centric mindset focused on workforce experience.
• Develop digital and analytical capabilities within HR.
• Break down functional silos across HR to enable fluidity.
• Customize the model thoughtfully to fit the culture and strategy.
• Anchor the model in meaningful data and insights.

The High-Impact framework provided Deloitte HR with an adaptable blueprint to help elevate its strategic role. While the transformation journey is ongoing, the impact on both workforce experience and business performance continues to grow.

McKinsey's Framework for Modern Operating Models

McKinsey has identified that the classic HR operating model introduced by Dave Ulrich in 1996 of having HR business partners, centers of excellence, and shared service centers is rapidly evolving. Through interviews with over 100 CHROs and senior people leaders at global multinational businesses, McKinsey found that companies are innovating their HR operating models in response to dramatic changes in business and the world.

Specifically, McKinsey identified 8 key innovation shifts that are driving new HR operating models:

• Adopting agile principles to enable faster reallocation of HR resources and more rapid adaptation to business needs.
• Focusing on improving the employee experience (EX) journey to attract and retain talent.
• Empowering frontline leaders to enable more human-centric interactions, reduced complexity, and improved decision-making.
• Offering individualized HR services to meet increasing expectations around personalization.
• Productizing HR services to build offerings tailored to business needs and enable cross-functional accountability.
• Integrating design and delivery for end-to-end accountability on strategic priorities.
• Leveraging AI, big data and machine learning to tap into new sources of decision-making.
• Automating HR solutions for efficiency and leveraging digitalization.

These innovation shifts have given rise to 5 emerging HR operating model archetypes that McKinsey identified:

• Ulrich+: An adaptation of the classic Ulrich model with HR business partners taking over more execution from centers of excellence (CoEs) and CoEs becoming specialized teams of experts. Supported by global business services and digital operations.
• Agile: Fewer HR business partners focused on advising leadership, smaller CoEs focused on analytics and planning, and pooled resources for cross-functional projects. Enables faster reactions and transformation.
• EX-driven: HR laser focused on excellence in “moments that matter” for employees and heavy standardization of other activities. Goal is world-class EX to bridge silos.
• Leader-led: Transition of HR accountabilities like hiring and development budgets to line managers, enabled with tools and back-office support from HR. Gives business leaders more autonomy.
• Machine-powered: Automation of most HR decisions like training needs using AI tools. HR focuses on providing counseling and advice. Leverages power of analytics and algorithms.

McKinsey found that the 5 archetypes are each typically based on one major innovation shift and supported by a few minor ones. For example, the leader-led model is based on empowering frontline business leaders and enabling individualized “cafeteria” HR offerings, built on a digital backbone.

The decision for HR leaders is consciously choosing the 1-3 most relevant innovation shifts to gradually transition toward their desired archetype. This is based on strategic priorities, feasibility, speed of change possible, and system impacts.

The process involves 3 key steps:

• Aligning on the right HR archetype based on business needs, workforce expectations, organizational context and dominant operating model.
• Prioritizing the 3-4 innovation shifts that will enable the transition to the archetype
• Comprehensively planning the transition journey, with milestones for each shift and an integrated, systemic perspective.

In summary, McKinsey has conducted in-depth research on how HR operating models are innovating through 8 key shifts to build new archetypes that enable greater agility, employee centricity, analytics, and empowerment. They provide a methodology for HR leaders to consciously evolve toward an archetype suitable for their business context.

Looking Ahead to 2025 and Beyond

HR models offer critical perspectives, philosophies, and structures for organizing the function’s priorities and activities. They provide blueprints for how professionals in this field can elevate their impact and influence.

As the pace of change accelerates, understanding these frameworks becomes even more important. HR leaders must tap into the wisdom of past models while continuously evolving their strategies and metrics to drive employee and organizational success - both today and in the future.