Learning curve: Hire power [from the September MM&D print edition]

by Tracy Clayson

When thinking about leadership, we often focus on the skills and abilities that make leaders strong: their vision, their ability to think strategically, their strength as communicators and negotiators.

When thinking about a successful company, we often focus on how it managed to create and grow its business: by gaining market dominance, by exceeding clients’ expectations, by designing and creating products and services, and by tapping the strength and talent pool of the company’s leaders.

This last item is the most crucial. Companies are built by their leadership teams, so it is paramount that organizations select and retain top industry performers. This is where HR comes in. CEOs and other senior executives need to rely on human resources departments to find and keep strong leaders and top players, and this is especially true now in this tough economic market.

A recent study conducted by the Human Resource Professional Association (HRPA) and Knightsbridge Human Capital Solutions examined the CEO’s perspective of the human resources department and the work it does.
According to Chris Larsen, the HRPA’s vice-president of marketing and membership, CEOs view senior HR executives as confidants who help businesses navigate through difficult personnel situations, including those involving senior executives. To some degree, this level of confidence is forced upon both parties. Who else can the CEO confide in or share key personnel performance reports with?

While the HRPA/Knightsbridge report shows that CEOs recognize the contributions HR brings to talent management, succession planning, engagement and retention, the study also finds that HR needs to do more.
Business leaders need to engage their HR executives and encourage them to develop a more inclusive, strategic, and collaborative process that involves both human resources and the C-suite. As part of that collaboration, both sides need to pay attention to the domain of the other. Management needs to get more involved in human resources issues, and HR, in particular, needs to have a better understanding of the business. The partnership between HR and the CEO requires HR leaders to be up to speed on business objectives and tactics and what the business case is behind the recruiting and development plan. HR is not simply an administrative support function in the company’s operating plans. It needs to broaden its skill base and value offering to contribute to and respond to the development of strategic business plans.

The HRPA report finds that CEOs are looking for HR leaders who can assert their ideas and provide solutions that are savvy, perceptive and focused on core values and goals of the organization. As one CEO in the report said, HR shouldn’t be “mired in the tactical application of policy and programs while disconnected from the real needs of the business.”

A cautionary note must be delivered to HR leaders who lean heavily on the comforts of performing administrative aspects of the personnel department over a CEO’s expectations of attracting, recruiting, developing and retaining top talent. Sticking to core competencies of HR administration is a limiting tendency that will prevent HR from being recognized as an executive level participant. To fully engage in strategic planning initiatives, HR also needs to understand the value of outsourcing administrative tasks to better focus on attracting, developing and retaining top talent within the organization.

Some industries report a higher level of engagement with HR, especially knowledge management firms like pharmaceuticals and finance, while resource and manufacturing industries tend to view the HR role as hirers and firers who recruit  and discipline.

Communicating the CEO’s messages in times of restructuring and change is a something many executives rely on HR leaders to do. A checklist from the report asks today’s HR leaders if they have the skills and resources needed to help their organizations change, grow and prosper. Ultimately, HR leaders must be business people first and HR experts second. They need to be able to link the hard realities of profit and loss statements with business goals and ensure the HR strategy aligns with them.

Dave Ulrich, founder of RHL Group, a leadership consulting firm, says good HR executives have vision, can create strategy, pay attention to the execution of tasks, and understand the need for accountability.

Today’s HR executives must understand that there are new tools available to help with recruiting and retention, and the leading ones use those tools—including social media and employee feedback—to do their jobs. The best also are able to create compelling employer brands that entice new top performers and engage current employees.

Good HR leaders build professional development programs that grow and enhance the skills of their companies’ current talent. They work to shape the management culture and create a workplace that encourages the sharing of ideas and feedback, all while promoting a more collaborative environment. Hierarchical models of management are not what the new generation of talent is interested in. Instead they expect to be challenged to rise to greater heights of responsibility, and to contribute to corporate planning and development.

HR leaders should have clear quantitative processes in place to measure what it costs to hire somebody, how much is invested in employee development, and how big a hit the company takes by not having the right person in the right role.

Tracy Clayson is managing partner, business development of Mississauga, Ontario-based In-Transit Personnel.