Article: Companies must restructure talent strategy for growth

#Innovation

Companies must restructure talent strategy for growth

Kim Seals, Partner; Anupam Prakash, Partner and Regional Leader - Cross Border Consulting, and Anurag Aman, Principal, Mercer, in conversation with People Matters
Companies must restructure talent strategy for growth
 

The urgent need lies in a shift from mere numbers, to hiring for quality talent that will drive innovation

 

A relevant question that most client organisations pose is how HR can make the right business case to initiate a HR intervention process

 

Kim Seals, Partner; Anupam Prakash, Partner and Regional Leader - Cross Border Consulting, and Anurag Aman, Principal, Mercer, in conversation with People Matters, share how organizations must embrace a new talent strategy that will provide them the right gear to take the plunge for quantum growth in the fast-paced market.

It is a case of water, water, everywhere and not a drop to drink, especially when you consider talent in India, where we continue to struggle for quality talent even as India Census 2011 disclosed India’s population mark of 1 billion. So even as businesses increase their dependence on their talent pools, the struggle to find the right talent continues to add to every organization’s dilemma.
We have talked about talent management for more than a decade now, but the present dynamism in the world economy makes it important to take a step back and relook at the talent strategy that organization follow, especially in companies that aim to compete in the global market and enter markets they have never been in before. The key concern is not to just hire the right talent anymore, but to also create the platform for people to optimize their effectiveness in contributing to the business goal.
Organizations that resorted to restructure their pay structure during the slowdown find it difficult to cope with present pay increases. When such organizations scout for new talent, they are suddenly faced with the need to pay a lot more to the new talent than what they are paying to people internally, thus creating an internal equity issue for the organization. Concurrently, available talent has also become more sophisticated as employees are no more only concerned about the money (as was the case some 10 years ago) but they also want to know whether or not the new role will take him/her on the right career path, and motivate and excite him/her as well. This makes the new talent strategy more complex as it must not only cater to acquiring the right talent, but also emphasize the developmental and growth aspects of employees in their present roles, as well as future prospects in career advancements.
Emphasis on the right talent strategy has gained importance even in manufacturing firms, where HR was earlier just about payroll and administrative activities, as they realize that even blue-collared worker make a strategic difference, taking talent management deep down into the shop floor. The global trend (and India being an important part of the global business arena) is to actively hire talent for innovation, which is a common practise, followed in many progressive organizations.

Performance, innovation and ability to scale are key imperatives for Indian businesses
The most important and immediate need for Indian business is to link individual performance to business performance. While business leaders adequately project the ‘3 year goals and budget’, they can only achieve this when they link individual performance to overall business performance, and HR plays a critical role in making this link possible through a seamless talent strategy that connects the two.
The volatility of Indian business has made innovation a precursor to business excellence, and innovation being primarily driven by the people, business leaders need to focus more on hiring talent for innovation. This is true across industries where manufacturing, IT, services sectors alike are striving to lay their hand on the right talent who will drive innovation. Therefore the need is to take a relook at the talent strategy so that the organization is able to hire right to leverage the collective pool of ideas that people bring, and use it to their advantage. The urgent need lies in a shift from mere numbers, to hiring for quality talent that will drive innovation. And the scarcity of such talent in turn forces organizations to build and nurture internal talent internally, while keeping an eye for the scarce but vital talent.
In this backdrop, the new talent strategy must address pertinent questions like how do you hire right for innovation? how does one screen for innovation? and how do you build an environment where people can innovate? These new considerations make the new talent management game even more compound.
Further, scalability of processes and practices that foster the new talent agenda pose a separate challenge for organizations that seek to capitalize on their people. The new talent strategy also ventures into creating adequate processes that allow exploitation of ideas from across the board of the talent pool.

Indian Business: The way forward
To make performance, innovation, and the ability to scale the HR agenda possible, businesses in India must take an integrative approach to tie the HR agenda with the business agenda. Recent activity in this space has seen large number of businesses, including manufacturing companies and SMEs, taking proactive measures to initiate an HR environment in their company. Organizations are increasingly realizing the need to integrate HR with business systems to drive the requisite behaviors that will have a positive impact on sales outcome. More organizations are also emphasizing the role of HR metrics to measure the exact impact of HR initiatives on business outcome. There are large organizations that have the bandwidth to initiate a whole dashboard of HR initiatives, and there is also an increasing number of SMEs that are very eager to initiate HR in their organization as they see a direct correlation between talent contribution and the bottom line. The problem however arises when organizations blindly follow suit and introduce HR initiatives in their organizations, without the right metrics in place to actually assess the value of these HR activities and its impact on the business agenda.
A growing trend seen is in sales-driven organizations that are integrating their HR systems to help measure and track sales performance improvements, identify sales drivers that impact retention, and identify key competencies that help the sales force to perform. Further, such information contributes to devising appropriate training programs that aim to build on such competencies that enhance sales productivity.

But, are companies willing to pay the price?
While the new way forward promises advantages galore, it does only come at a price. The truth remains that many companies do not see a direct and immediate value, and so do not like shelling out large amounts; but the good news is that you can cut the cake in many different ways, so one can start small. While an established and HR-ready organization will have an array of HR activities (as many as 30 different initiatives), if a newcomer is able to start with even 3 initiatives, it is a great start which is easily possible. Therefore organizations have the option to spend less in the beginning and keep growing that investment as they see more results from such investments. In India, many smaller companies do not want to invest in HR. Some want to pick a modular ready-to-use HR alternative product for basic HR functions, while there are others that prefer to outsource the same to individual freelancers. So the market has varied organizations interested in varying needs and price points. Fortunately, the work is such that it is possible to address these varying needs and price points, therefore HR advisory and consulting takes a customized approach in India.
More importantly it is the experts’ responsibility to advice client organizations on whether or not they are ready for a HR intervention and to what degree are they ready? While organizations may want to deploy every possible initiative with the hope to transform the organization into a people-centric organization, they need to realize that an organization must be ready to absorb all those things. For example, an organization cannot benefit overnight by suddenly including a Balanced Scorecard system or a performance-linked incentive program. The organization itself must be operating at a certain stage of maturity for it to benefit from such systems.

The HR Case
Another hurdle for organizations is the HR case that it needs to make to the CEO to justify the need for such an investment. A relevant question that most client organizations pose is how HR can make the right business argument to initiate a HR intervention process. And the question raised often centres around the money to be spent, hence the need to look at ROI on such initiatives.

Popular tools and practices in the new talent scenario
The practice of linking HR to business is most popular in India (and equally elsewhere) as this gets both HR and business people equally excited. The Balanced Scorecard system, a tool which the business side has been using for long, is well accepted as a tool that factors in HR’s contribution. This in itself makes HR an equal business partner.
Technology is a great enabler that has made scalability of HR initiatives possible. State-of-the-art ERP systems ensure coordination of efforts towards the business agenda. While some parts of Europe took longer to adopt technology solutions, this is fast changing now. Technology in business processes is critical in successfully rolling out business imperatives. Technology has become a crucial tool in deploying innovative training techniques to create learning culture within the organization.

 

Topics: #Innovation, Strategic HR

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