FINDING talent is no longer enough. It is equally important that companies retain skilled employees in order to reach their growth and performance potential. Senior management and HR teams are struggling to hang onto their assets by hiring HR consultants to tell them how to do it.
The Slovak Spectator spoke to Marc Timmerman, European Practice Leader for Talent Management at Hudson, who is in direct contact with managers, advising them how to find and nurture human capital.
The Slovak Spectator (TSS): Many companies decide to outsource their HR processes. What is the advantage of outsourcing? Wouldn't it be better to rely on internal HR departments that know the company best?
Marc Timmerman (MT): A couple of years ago, there was a whole movement of outsourcing HR in the sense that we no longer need HR people, we will just outsource it to another company. So, for example, recruitment was only done by others and the company no longer retained any HR officers. Companies fully relied on HR agencies 100 percent. The external HR agent would have an immediate and direct link to the management of the organization. Some companies changed their minds and brought HR back in house. Other organizations implement what they call HR business partners. Today, it is very normal for companies to cooperate with HR partners for things such as compensation and benefits, management develop-ment, recruitment, selection and search. Meanwhile, in-house you have somebody screening people for company needs, doing assessments and so on. What this means is that you have an internal HR team as well as external advice.
TSS: In your view, what is the reason to maintain an internal HR department?
MT: It is important for management to have an internal communication channel that allows different units and departments to communicate effectively. This means that management is given more responsibility. Some companies merge management, saying that a line manager is also the HR manager. I can see the attraction in that but there is a danger to that approach. When all these individual line managers are implementing their own HR strategy and failing to coordinate their actions, then what you see are policies, systems and processes out of balance. The result can be complete anarchy.
What I do believe is that it is a good thing for a company to have a small and lean HR department as an intermediary between the HR business partner and the line manager. So at the end, line managers are effectively responsible for managing their people but systems, processes, rules and policies remain guarded by the firm's HR teams.
TSS: So does this mean that the HR teams are effectively guardians of the corporate culture?
MT: Yes. It is up to the HR manager to safeguard the company's culture and values as well as to act as a link between the HR business partner and the line manager.
TSS: A survey published by global consulting company McKinsey in 1990 predicted a "War on Talent", identifying skilled employees as a firm's most important resource. Are these predictions accurate? Do companies compete for "smart, sophisticated business people who are technologically literate, globally astute and operationally agile"?
MT: The report predicted accurately what was going on in 1990 and several of the survey's conclusions remain the same, which is why I travel around Europe telling everybody that we are at the start of the second "war on talent". However, there is a big difference between the two. The first war was caused by developments in information technology, telecommunications and the dot-com boom. The second war is on the fight for talent. Currently, we are experiencing a skills shortage: fewer people to do work that requires a greater amount of specific skills. Moreover, the new generation reacts differently to given positions. "Old school" managers are used to hiring people with the requisite capabilities in place. But those already qualified for the work are looking for new challenges; they are not necessarily willing to perform tasks that they already know how to do. And that is a big difference. So now we already have a smaller volume of willing and able workers compared to the past.
TSS: What should top management concentrate on while looking for Executive talent? How can they ensure that their new hires will fit into the corporate culture?
MT: It is important for companies to realize that executives change their career. Managers can no longer rely on the fact that people will stay with one firm. Interpersonal and relationship skills become as important as experience. Sometimes, very intelligent people with top-level management experience are not as qualified to be team leaders as someone able to motivate others. If executives look at their talent, they have to make distinctions between those with potential, those in the middle of their careers and those already at the height of their powers.
On the other hand, I also advise managers to look at their available talent pool in a much more diversified and individual manner. If they find out that somebody has leadership potential, they should find out how far he/she wants to go.
TSS: What should managers do to retain their employees?
MT: The main reason good people leave is because the career path before them is unclear. Secondly, talent leaves because the company stops giving them challenges and learning experiences that supporting their personal development. And thirdly, good people leave because they are not compensated well enough.
TSS: Would you agree that communication is what managers should do to retain their talents and top performers?
MT: Having systems and policies and models is no longer sufficient. Professional companies with professional HR people still lose people because they forget to communicate on an individual level.
10. Oct 2005 at 0:00 | Magdalena MacLeod