A perfect storm is brewing in the talent management arena due to the cumulative impact of demographics and global mobility challenges.
The problem is that, despite record levels of unemployment and ongoing economic difficulties, there is still a shortage of leaders, and specifically, people with the skills required to help large companies meet the demands and opportunities presented by emerging markets.
Although this scenario will come as no surprise to HR directors who are all too familiar with the issues, chief executives are only just waking up to the fact that not having the right kind of executives in place will put them at a serious disadvantage in delivering on their strategies.
As a result, some are starting to go down the route of appointing ‘heads of talent’ in order to identify future leaders who can demonstrate the right skills and behaviours to take the organisation forward.
To understand more about this emerging role, however, we asked talent executives from 24 FTSE 100 companies to take part in research, which comprised a combination of questionnaires and one-to-one interviews.
We found that the post was subject to a lot of ambiguity and contradictions and there was a propensity for tension to exist between it and HR. This was not least because talent professionals tried to ‘speak the language of the business’ in order to be viewed as different and more strategic.
Where the role appeared to work best, however, was in scenarios where talent managers recognised the challenges facing them and developed strategies to deal with them. Such strategies included building networks of influence and developing the requisite political skills to compensate for their lack of power.
Diplomat and influencer
But the single most important criterion for success was having the chief executive’s ongoing support.
Although the head of talent role started to appear about five years ago, most of the people that we spoke to had been appointed only recently, while some posts had only just been created for the first time.
Nonetheless, despite all of the talk of the need for talent chiefs to be close to the business in order to understand strategy, they all too often found themselves with little actual power. Although they were tasked with introducing consistency into talent-related practices within line of business operations, the reality was that few had any authority there.
Moreover, while they should have been focused on the impact and likely outcomes of business strategy, most heads of talent were HR-driven and focused instead on inputs and outputs.
Given this backdrop, it became apparent that the most effective talent managers operated by using the power of suggestion and their own personal influence rather than by exercising power in a more traditional sense. In fact, the key challenge for many was finding that a key element of the role involved acting as both a diplomat and an influencer.
Unsurprisingly, therefore, interpersonal skills were deemed to be a critical requirement of the post as was the ability to build trust. Other essential character traits included resilience, tenacity, energy and being able to deal with setbacks.
But even though many chief executives today recognise the challenges involved in aligning business and talent strategies (according to a recent PricewaterhouseCoopers survey, 57% fear that a lack of talent will hinder future growth), there is no blueprint as yet for choosing the right candidate to fill a head of talent post.
By the same token, there are few templates or models available for talent managers to adopt, which means that they effectively create their own roles in most instances. It is worth noting in this context that the 24 executives we questioned had 23 different job titles so for reporting purposes we settled on ‘head of talent’ as a consistent term.
The seven ‘P’s
Nonetheless, in order to align business and talent imperatives and drive behavioural and cultural change from within, these executives considered their role to be a long-term one – despite the challenges that came with it.
While there was a lot of ambiguity around the positioning of talent management as an activity, a lot of respondents suggested that it was not helpful to sit within the HR function as it had a negative impact on credibility and on how much the role was accepted by the business.
While talent heads are in practice appointed by chief executives in order to serve their agenda, few actually reported into them (17%) or were even on the executive team. The vast majority reported into the HR director, while contact with the chief executive and other senior executives was generally ad hoc and relatively infrequent.
Those that did have direct reporting status or a strong professional relationship with the chief executive, however, felt that the exposure gave them an edge in dealing with some of the more difficult senior talent issues that they faced.
In reality though, the majority of senior talent executives that we interviewed did not try to align talent measures with business metrics such as the company’s financial output or its share price performance.
Instead they focused on operational matters such as the number of completed assessments or talent reviews undertaken by line managers; whether candidates had participated in leadership development programmes or the ratio of internal to external hires taking part in any schemes.
In order to help you map out and structure the type of talent function and talent head required, however, here is a checklist of seven ‘Ps’ that may prove useful:
- Pressures – How immediate are the company’s talent issues? Where are any talent problems interfering with corporate performance? How are you addressing key strategic matters such as the impact of emerging markets and/or critical skills gaps?
- Purpose – Why does the company need a head of talent? Would current line managers be willing and able to act as talent managers instead? Are you confident that your talent practices are aligned with your strategic goals?
- Person – Do you have the right skills and capabilities in place to manage the talent challenges that you face? What skills and experience should a head of talent possess?
- Profile – How credible is your ‘brand promise’ around dealing effectively with talent in terms of both current and future generations? What internal and external profiles should be maintained by a talent manager?
- Power – What decision-making powers does the company want to invest in its head of talent? Will they have a veto over senior hiring decisions, for example?
- Process – Will your talent chief take part in top executive processes and forums? Are key business processes such as strategy planning and budgeting underpinned by a solid understanding of the talent implications?
- Pools – Do you know where the talent within your organisation, industry and/or market is located? Which particular talent pools would a head of talent manage?
Is there an irreversible trend towards the appointment of heads of talent in larger companies? The evidence would suggest yes, but it appears that simply hiring someone and hoping for the best isn’t enough.
Instead it is crucial for chief executives to devise a talent-led strategy, with the help of HR, in order to align business and talent imperatives effectively and, ultimately, boost company performance.
Annabel Parsons, head of the UK leadership consulting practice at executive search firm, Heidrick & Struggles.
