“…surveys show that business leaders around the world are deeply concerned about the intensifying competition for talent, (yet) few companies make it an integral part of a long-term business strategy, and many even try to raise their short-term earnings by cutting talent-development expenditures. Other factors compound the difficulties of recruiting enough appropriate talent: minimal collaboration and talent sharing among business units, ineffective line management, and confusion about the role of HR…
…another problem: the declining influence of the human-resources function. Yet only HR can translate a company’s business strategy into a detailed talent strategy. HR professionals should assert their influence and provide credible and proactive business counsel and support for individual business units.”
The McKinsey Quarterly (August 2008)
McKinsey’s recent survey revealed something interesting: yet again, we don’t seem to know what the human-resources department is there to do.
We’ve been here before: before ‘HR’, we had ‘Personnel’. That was the department that managed your payroll and counted your holidays, and gave you the little slip when your services were terminated. We then began thinking a little more strategically about the people in the organisation and started paying lip service to the “people are our greatest asset” mantra. Employees were now referred to as a “resource” (akin to money and machinery), and the HR department began seeing itself as a resource manager: looking at motivation as well as productivity, and getting involved in training and performance appraisal.
Next came the ‘human capital’ wave, when people managers began respraying themselves as builders of capital. The term “resource” became a no-no for a while, as it was deemed to imply exploitation rather than uplift, and suggested that shareholders were still controlling staff like they did IT systems and vehicle fleets.
Amidst all the reinvention and rebranding, one thing is getting lost: what exactly IS the function of the HR function in today’s rapid-moving business world? McKinsey suggests that all the mundane stuff should be relegated to being managed by efficient systems. The HR manager as ‘talent officer’ is what is needed: a strategic role that involves pro-active coaching and counselling. This involves looking at the talent needs of the organisation in coming years; ensures that the best talent walks in through the door; and delivers a stand-out employee experience that keeps people inspired and motivated.
In this regard, McKinsey found that we have some way to go. The survey showed that HR professionals think they do far more of the ‘talent’ thing than line managers give them credit for. For example, just 25 per cent of HR people felt that they lacked the capacity to play a talent management role, whereas 58 per cent of line managers felt the lack. 60 per cent of line managers felt that HR was playing a merely administrative role, not acting as a ’strategic business partner’.
I led a strategy programme for a wide range of senior Kenyan executives last week, where we concluded that whether a company fails miserably or succeeds wildly is usually explained in one sentence: “It’s the people, stupid!” It’s time to understand who’s really being stupid about talent in organisations.
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2 Responses:
September 10th, 2008 at 9:00 am
Sam:
I completely agree: in many Kenyan companies, we have not even graduated from regarding staff as a necessary evil, let alone a ‘resource’ or a form of ‘capital’ to build.
September 10th, 2008 at 12:48 am
Most exceutives agree that HR is the competitive edge in executing strategy and winning in the market place but much needs to be done from the HR front. One issue with HR function is that most of it’s leaders dont have credibility within the organisation- first they dont understand their businesses and the key value drivers -they operate with an HR mentality, working in isolation from the business and hence minimal HR value proposition.
The other issue is that many executives will talk about importance of talent management- but when you pin them down to how many hours in a week/month/year they commit in coaching and developing their reportees, you will be surprised. Very few indeed! Talent management is everyone’s business in the company. One famous phrase which I agree with is that- HR is too important to be left to HR people!
In companies with good HR strategies and practices, they have been able to outperform their competition by far. Leaders like Jack Welch and Louis Gerstner Jr of the famous IBM turnaround have credited a significant part of their achievements to their HR leaders.
Sunny with all due respect, the Mckinsey’s research was most likely focused on the multinationals in the Western countries. If you were to look at our local HR practices you will be very surprised. Most of the companies are still struggling with rudimentary issues - as in even those operational excellence stuff like apyroll, leave management, records management are still an issue. Employees are also not valued and the companies behaves in a manner to suggest that that the employee owes them gratitude for being employed there in the first place! As such the company can do with the employess anything they wish. Definitely there are few pockets of good practice but in very unlikely quarters!