Transform HR to Compete for Talent

Human capital is the CEO’s No. 1 concern, but only 9% of HR leaders are ready to address their people challenges.
The Conference Board’s 2014-15 Global Leadership Forecast

So, what to do?

The best HR departments are focusing on the entire employee lifecycle – hiring to retiring – or talent management. They are also providing better support to managers, and gaining points for pulling up from administrative minutiae to work on the long-term wellbeing of the business.

But there is still a long way to go. There’s continued frustration from business and HR leaders alike that the value of the “strategic” approach remains at best unquantified, and at worst ill-defined and poorly understood. Too many HR organizations still fail to make a hard and convincing connection between talent decisions and value.

Businesses need to concentrate on four things:

  • Rethinking the role of HR to enable a better understanding of the vital link with strategy,
  • Using employee engagement to identify the talent actions that will drive the value,
  • Fixing HR operations so they are not a distraction from HR’s higher mission, and
  • Focusing HR resources in more agile ways so as to support these fresh priorities

Rethink the role of HR

Short of rewriting job descriptions and changing roles right away, companies should identify their best HR people and prepare them for a new role with training and a understanding of expectations. HR professionals should help business leaders connect talent decisions to value-creating outcomes, while being held fully accountable for the performance of the talent.

Employee engagement

HR should utilize employee engagement surveys to collect data by asking the right questions, analyzing results and acting with a clear plan. Business/work units that score in the top half of employee engagement have nearly double the odds of success when compared with those in the bottom half. HR should use data collected to improve engagement and, in turn, drive business value.

Fix HR operations

The current reality of HR is that the function is routinely pulled into operational issues and distracted from its core strategic mission. HR must, therefore, raise awareness and concentrate on three critical operational priorities: continuous process improvement, automation technology, and user-experience-focused service improvement.

Be agile

HR functions need to be able to create a solid backbone of core processes that either eliminate the clutter or camouflage the complexity to the business, all while delivering the basics. For small to mid-size organizations this might mean moving some of these services to a PEO or examining a shared service approach. With process improvement and automation the end result will be a much smaller, more agile group focused on talent management.

If HR leaders are to finally achieve the promise of being ‘strategic’, they will need to transform their own function to provide the foundation for accomplishing that. By changing the way HR interacts with the business on strategic questions, notably through the creation of new HR leaders, HR can gain responsibility and accountability for driving talent-linked value.

Adapted from: The CEO’s guide to competing through HR, McKinsey Quarterly, Frank Bafaro, Diana Ellsworth, and Neel Gandhi

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Jackie Messersmith is President and CEO of Talent Management LLC. Talent Management provides consulting services to small to mid-size businesses to put a top performing culture and talent strategy in place, and is the developer of Talent Snapshot®, an integrated, competency based, online talent management solutions. Jackie can be reached at 513-528-9700 or