UK businesses need to focus on talent management

More than eight in ten human resources lead­ers and employ­ees believe their tal­ent man­age­ment strate­gies should be improved.

A stag­ger­ing 85 per cent of respon­dents to the April 2016 Mer­cer study, Future-proof­ing HR: Bridg­ing the gap between employ­ers and employ­ees, admit their tal­ent man­age­ment pro­grammes and poli­cies need an over­haul.

Fur­ther, although 75 per cent of employ­ers claim to be work­ing on cre­at­ing diverse, inclu­sive lead­er­ship teams, only about half of all employ­ees say their organ­i­sa­tion has effec­tive pro­grammes to devel­op diverse lead­ers, accord­ing to the study, which polled more than 1,730 HR lead­ers and 4,500 employ­ees across 15 coun­tries.

This helps explain why one in three employ­ees is plan­ning to leave their cur­rent organ­i­sa­tion with­in the next 12 months due to lack of career-pro­gres­sion oppor­tu­ni­ties.

Transforming HR

The HR func­tion, which is respon­si­ble for peo­ple man­age­ment, con­se­quent­ly needs an over­haul if the C‑suite is ever going to pri­ori­tise, and take action around, tal­ent man­age­ment.

But there are a num­ber of chal­lenges to over­come as part of this over­haul, not least the view held by many C‑suites that HR is lit­tle more than a cost cen­tre to their busi­ness.

Just 4 per cent of HR pro­fes­sion­als polled by Mer­cer believe that HR is viewed as a strate­gic busi­ness part­ner in their organ­i­sa­tions.

This comes as lit­tle sur­prise to Chris Row­ley, emer­i­tus pro­fes­sor of human resource man­age­ment at City University’s Cass Busi­ness School. He says: “Despite the com­mon rhetoric that tal­ent is inte­gral to organ­i­sa­tions and com­pet­i­tive­ness, HR con­tin­ues to strug­gle to have clout in the C‑suite.

“On the one hand, there is the long-stand­ing antipa­thy, even hos­til­i­ty, by many towards the HR func­tion and the chief human resource officer’s (CHRO) posi­tion in the C‑suite.

“On the oth­er hand, there is the desire of HR to trans­form itself from its tra­di­tion­al reac­tive and admin­is­tra­tive report­ing mod­el image towards being a more strate­gi­cal­ly inte­grat­ed con­trib­u­tor to organ­i­sa­tion­al per­for­mance. One route towards this is for CHROs to be involved in lead­er­ship suc­ces­sion plans and tal­ent man­age­ment. This can involve tal­ent man­age­ment in twin ways.”

The pos­si­bil­i­ty that sup­ply of labour may be lim­it­ed by Brex­it should be a key dri­ver in moti­vat­ing C‑suites to take action on tal­ent man­age­ment

Strate­gic HR lead­ers make mean­ing­ful con­tri­bu­tions to strate­gic debates around impor­tant issues such as tal­ent man­age­ment by becom­ing pro­fi­cient in data ana­lyt­ics, because this enables them to arm their C‑suite with the peo­ple data nec­es­sary to assess the cur­rent and future state of its work­force.

As Tam­sin Srid­hara, direc­tor at Willis Tow­ers Wat­son, says: “If you’re in the finance func­tion, you get that con­tin­u­al auto­mat­ed flow of finance data and if you’re in a retail prod­uct role you get that dai­ly feed of prod­uct data. Why isn’t there the same amount of ana­lyt­i­cal infor­ma­tion and the same amount of data avail­able for peo­ple as there is for oth­er func­tions?”

Pro­fes­sor Row­ley agrees, sug­gest­ing HR could forge a path ahead for itself by build­ing on HR infor­ma­tion sys­tems, and using big data to devel­op and pro­duce pools of tal­ent and pipelines of top-class inter­nal can­di­dates for senior roles in organ­i­sa­tions.

“Of course, glob­al­i­sa­tion, inter­na­tion­al­i­sa­tion and cross-bor­der M&A, and work­force demo­graph­ic trends cre­ate greater diver­si­ty. That makes tal­ent man­age­ment more dif­fi­cult to achieve and requires lead­ers with req­ui­site skills to recog­nise this and man­age such staff,” he says.

Engaging the C‑suite

In addi­tion to data ana­lyt­ics, HR pro­fes­sion­als need to be able to talk the same lan­guage as the C‑suite.

As Peter Cheese, chief exec­u­tive of the Char­tered Insti­tute of Per­son­nel and Devel­op­ment (CIPD), says: “What we’ve been say­ing for a while is that HR can’t speak the lan­guage of busi­ness, which large­ly lies in the lan­guage of num­bers. But equal­ly, the busi­ness doesn’t have the lan­guage of HR.”

He adds that the time has come for HR to step up and ful­fil its poten­tial. “The need for HR to engage with exec­u­tive man­agers on big strate­gic debates has nev­er been clear­er. Look what’s hap­pened this year. Brex­it has trig­gered a lot more dis­cus­sion, as it should, about what is the nature of our work­force today.”

The pos­si­bil­i­ty that organ­i­sa­tions’ ready sup­ply of labour may be lim­it­ed by Brex­it should be a key dri­ver in moti­vat­ing C‑suites to take action on tal­ent man­age­ment. This action should involve a review of their entire peo­ple strate­gies, from the approach to staff recruit­ment and reten­tion to poli­cies on pay and reward.

In his Octo­ber 2016 paper, Shap­ing the world of work – time for a UK jobs strat­e­gy, Kei­th Sis­son, emer­i­tus pro­fes­sor of indus­tri­al rela­tions at the Uni­ver­si­ty of War­wick, says busi­ness­es are pre­oc­cu­pied with low pay-based peo­ple strate­gies at the expense of pro­duc­tiv­i­ty.

“Too many UK busi­ness­es, to put it blunt­ly, oper­ate in the bar­gain base­ment, rely­ing on low pay to sur­vive. Work organ­i­sa­tion is root­ed in ‘lean’ and ‘tra­di­tion­al’ mod­els with exten­sive man­age­r­i­al hier­ar­chies and long hours, but lit­tle high-per­for­mance work­ing,” he says.

This short-ter­mism needs to stop or the con­se­quences for UK plc could be dis­as­trous.

“If busi­ness doesn’t start to man­age peo­ple bet­ter [and apply] more fair­ness and more trans­paren­cy about how they reward, then there will be more leg­is­la­tion, so I think this is a real time for busi­ness to step up,” CIPD’s Mr Cheese con­cludes.

Transforming HR

Engaging the C-suite