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Carmel Mallon

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Managing Director

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Where’s your next HRD coming from?

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We’ve all heard how ‘HR needs to change’ – both as a discipline in its own right but also in terms of the type of people it attracts. The consensus seems to be that if HRDs are to truly become boardroom equals, they must be fluent in the language of the CEO or FD – a suggestion that has increasingly seen commentators talk about HR practitioners needing to move into the profession from the worlds of finance and accountancy.

It’s no surprise that this expectation has been growing at the same time as conversations around people and talent have been morphing into ones around ‘human capital’ with much more emphasis on how people impact commercial success.

And yet, we think there is another conversation that needs to happen alongside this.

Rather than looking outwards toward other disciplines, we believe change that is already happening within HR could hold the key to what the attributes of a well-rounded HRD need to be – change impacting and emanating out of the reward function itself.

Reward in the limelight

Just think how about how the media’s narrative and the public’s perception of companies have changed: rightly or wrongly organisations are being judged about executive pay, the salary differences between those at the top and those at the bottom; the gender pay gap; about bonuses being paid for failure; or how remuneration (particularly in sectors like financial services), impacts behaviour; and generally about a stronger regulatory environment governing pay and benefits.

In short, it’s a very different landscape, but one that’s seen the reward function – once very small – thrust more directly into the limelight.

We feel reward is fast becoming so centre stage, it’s no longer just a nice-to-have skill for any aspiring HRD

Reward strategy – from the way it influences the type of talent businesses attract, to its role in retaining talent – has turned into a conversation about how companies are structured and what their longevity is as a result of this.

And this is impacting what is demanded of HRDs.

Compare this to 20 years ago when the chances of anyone from reward becoming an HRD was remote – there were too few reward professionals anyway although it was growing as a discipline.

Today though it couldn’t be more different. In fact, we feel reward is fast becoming so centre stage, it’s no longer just a nice-to-have skill for any aspiring HRD; arguably, it’s vital they have this experience to succeed in their own job aspirations.

A larger part of any HRD’s agenda

This isn’t just our view. We recently interviewed a number of newly appointed HRDs who all hark from reward, but have transitioned to the top HRD job.

We asked them why they thought reward was a new must-have skillset and they all said the same thing – their experience was needed simply because reward is becoming a larger part of any HRD’s agenda.

The best reward professionals are able to understand both people and pounds sterling.

Furthermore, it would appear that another key advantage that many reward professionals share is the fact that they are increasingly perceived as a trusted confidante of the FD.

While FDs may often be removed from the ‘people’ side of things, (with the inevitable focus on numbers and spreadsheets), the best reward professionals are able to understand both people and pounds sterling.

It’s now gladdening that reward professionals themselves – who once may have thought their stock could only reach so high – are grasping this opportunity too and giving their generalist HR colleagues competition for the top job.

Healthy internal competition can only raise the bar for all.

CEOs now talk about culture, sustainability and brand positioning as if it’s as normal as bottom line and growth plans.

A wider spectrum of stakeholders

At a time when HRDs need to roll their sleeves up and be more hands-on (and sometimes operate without subject-matter experts beneath them), we believe having some reward experience is essential for them to do their jobs properly.

We are not belittling HR. If anything, we believe such a trend reflects the growing respect for the well-run HR function.

Today, like never before in HR, the simple fact is, there is a greater need to understand and communicate with wider spectrum of stakeholders.

Most HRDs today have progressed through the ranks from a non-reward background without it being so important to them. But one thing’s for sure; today reward is a subject that constantly comes up in conversation. CEOs now talk about culture, sustainability and brand positioning as if it’s as normal as bottom line and growth plans.

The reward part is now a key pillar of these conversations.

The best CEOs and FDs want their HR function to know how to drive business strategy and deliver organisational change.

So, if you are an aspiring HR professional with your eye on the top job it may well be in your best interests if you look to acquire some key reward skills and experience.

Similarly, today’s reward directors should perhaps take every opportunity to broaden their experience too as they could be next in line for the top HR job.  

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Carmel Mallon

Managing Director

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