When did talent management take over HR?
What do I have to do to get the CHRO job?
We first noticed this trend back in 2016. And a more recent review shows the trend hasn’t gone away.
It is particularly noticeable in the HR structures of newer, more technologically savvy businesses across a range of industry sectors. A subtle but significant change in HR has taken place. Historically, the senior HR person in any organisation was a Group Head or SVP of HR with a broad generalist backround, but we are now seeing that role being filled by Heads of Talent Management instead. What is going on? Is this a permanent change? Is it a superficial alteration of the title? What might it mean for the HR profession?
HR has historically been the catch-all term for any activity concerned with the people issues in an organisation, but in reality, HR departments have frequently been a collection of other activities as well, with the emphasis between them differing from company to company, according to the nature and purpose of the business. HR leaders regularly bemoan the demands from business leaders that just don’t fall into (or aren’t wanted by) any other corporate function unit.
The demand for this broad range of activities within one HR function has diminished over time, as business leaders continue to insist on more for less, and especially as technology progresses to provide a wide range of alternative solutions that require less headcount in HR teams. Many parts of the HR function continue to be under increasing pressure to change the way they operate and often that means outsourcing.
Outsourcing of HR functions?
If you examine each constituent function of the traditional HR department there is a clear case to be made for outsourcing almost if not all of them. Many of the administrative functions such as payroll have already disappeared from larger businesses. Better trained managers, an excellent shared service centre, policies and procedures on-line and access to external specialists when required is increasingly the structure of the contemporary HR function. There has been another wave of companies outsourcing their recruitment/talent acquisition functions over this last year. Consultancy practices for Executive Compensation, and broader Compensation and Benefits expertise are experiencing healthy growth with companies opting to rely more heavily on their specialist impartial advice that also provides a credibility to investors. We know of one large multinational that now has no HR Business Partners onsite anywhere in the world, as their role responsibilities are being successfully run with an array of international experts from one centralised centre in South East Asia.
Logically, if so many functions within HR can be outsourced then that leaves a very small department (if any) for the Head of HR to lead and manage. Many newer businesses have already come to that conclusion and have outsourced everything they can but most have retained one function that seems increasingly important – talent management.
Companies want to keep talent management on the payroll
This doesn’t seem to be just another “rebranding” of the HR function. We are seeing companies around the world, who are structuring their “new” HR function aka Talent Management, as a amalgamation of resourcing, recruitment, talent mapping, leadership development, broader learning & development, workforce planning, and a few other immediately related activities.
Understandably, these elements of HR are usually key to the successful growth of any new businesses and increasingly, to some of the traditional ones as well. The CEO of a social media firm for example, is happy for all the “traditional HR stuff” to be dealt with by others for a fee, but he wants to make sure that the persons responsible for attracting and retaining the people who will make a difference to his business are key members of his management team.
Interestingly many of the activities managed by these “new” talent management teams, particularly resourcing and recruitment, may well be outsourced and will be in the hands of trusted partners who work with the talent management team as part of a joined up approach. These external third parties may operate on or off-site but will present themselves to the market as part of the business that has engaged them.
We have always known that people are a key difference in making successful or failing companies but many HR professionals have arguably forgotten that and become side-tracked into regulation and compliance or focusing on trialing the “next trend” to try to build kudos for the function from sceptical stakeholders. Many an employee review (just check Glassdoor as an example) or an exit interview has referenced HR functional failures to manage recruitment, engagement and retention of people resources. Certainly during periods of restructure and layoffs, it is immediate apparent how many HR teams have not spent enough time on helping leaders really understand which people are in business critical roles and which deliver real innovation and sustainable results, nor can they measure high performers beyond a short term performance rating or real talent value beyond cost per hire.
Many company leaders around the world report a belief that it is their people that make the competitive difference to the success of their businesses, so it makes sense that those leaders are driving the push to putting talent back at the centre of HR. It goes towards explaining why so many organisations now put the Head of Talent Management at the top of the HR tree.
About the Author
Leanne Morris is well known as a both an outspoken advocate and critic of the HR profession. With long standing networks across 94 countries in all specialist areas of the function, and a multi- continent work history, she is a sought after subject matter expert on international HR hiring trends and HR hiring best practice.