Market trends for 2005

Any illusion that the war for talent is over should quickly be dismissed. Recruitment experts are saying that although the economy is far from booming, demand is outstripping supply in the jobs market.

“Good quality HR people are hard to get and increasingly harder to keep,” says Susanna Mitterer, managing director of people and organisational development company TMI UK. John Baker, director of search and selection at recruitment agency Hodes, which includes

MacMillan Davies Hodes, agrees. “HR people are becoming more discerning about career and job choices at all levels,” he says.
In part, this stems from increased levels of job security. The latest Global Career Confidence Index, from Right Management Consultants, reveals this has continued to grow over the past six months. But there is a downside, as Jo Bond, managing director of consultancy RightCoutts, explains. “Confident workers are more likely to look outside their current employer for career development opportunities, leading to costly increases in staff turnover,” she says.

While the HR market remains buoyant, the emphasis is on adding value. “Although the transformation of HR functions may mean there will be fewer jobs in total, the ability to contribute within these roles will continue to increase,” says John Ingham, principal consultant at Penna Consulting.

So what are the hot HR skills for 2005? Business know-how, leadership, emotional intelligence, change management expertise, organisational development, resourcing and talent management skills are all highlighted as must-haves.

In too many organisations, HR operates as a silo, says Helen Rosethorn, chief executive at Hodes. “The more innovative HR leaders are striving to join up HR practices, led by an unashamed focus on meeting business objectives and proving the bottom line contribution of HR,” she says.
With continual pressure on HR to re-invent itself as a strategic force within the organisation, its role may well become more one of consultant and, as a result, project management skills will be required, as will the ability to network, says Bond.

The importance of specialisation will increase, giving HR professionals scope to develop expertise in areas such as compensation and benefits, HR policy and employment relations. Other areas of interest include meeting specific business needs, such as HR support in mergers and acquisitions or outsourcing business processes and HR. But outside the larger firms, these tend to be one-off activities.

“There is a definite shortage of talented, experienced specialist HR personnel,” says Zoe Lewis, managing director of executive search and selection firm Odgers Ray Berndtson’s advertised selection division. Shortages are reported in a number of areas, including talent management, communications and learning and development.

Several recruitment consultants are stressing the need for HR personnel who are also expert coaches, mentors and leaders. “Increasingly, companies are recruiting or promoting people more on their ability to motivate, inspire and lead people,” says Mitterer.

Those with communication skills can also carve out a niche for themselves. Lucy McGee, head of marketing for global HR consultancy DDI Europe, says: “There is a growing recognition that so much of the success of an HR initiative is to do with how it is communicated and positioned.”

The challenge for HR is to become more commercial, with the ability to cross over and work with other departments, such as finance, marketing and IT. Two major developments, the Information and Consultation Directive and the requirement to report on human capital management in the Operating and Financial Review (both to be implemented in April 2005), mean that HR will have to integrate more closely with all areas of the organisation.

Some predict this will lead to HR hybrids. “HR/marketing roles will use marketing’s experience with customers to tap into and make sense of employee insights,” says Ingham. “HR/IT roles will help deliver the technology supporting HR, such as intranets, knowledge-sharing solutions and business-to-employee applications.”

Not everyone thinks aligning HR with IT is a good idea, though. Mitterer says that IT has always been an entirely difficult and left-brain activity. “HR needs to take charge of the organisational and human capital development,” she adds.

The hybrid is yet to emerge at the lower salary levels, says Lewis, who places more emphasis on the need for commercial skills. “Clients want candidates with proven experience of managing profit and loss or who have managed a division/function as if it was their own business,” she says. But, she adds, HR has yet to make a convincing transformation into a more business-oriented animal.

“The term ‘business partners’ is becoming over-used,” she says. “While a lot of people describe themselves as this, they lack the exposure at senior level to actually influence or advise.”

A recent Croner Reward/Chartered Institute of Personnel and Development survey identified reward managers as the highest paid HR specialism, earning 32 per cent above the average salary for a senior manager. Employee relations and recruitment managers are also paid more on average. “Hybrid roles requiring skills from finance and IT will attract salaries higher than others in HR,” says Ingham.

But, irrespective of position, increased remuneration is down to HR demonstrating its worth. “The hybrid is more about skills and experience,” says John Baker, director of search and selection at Hodes. “Salaries for good people are moving upwards, but the definition of ‘good’ is increasingly demanding.”

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