Recruitment and talent 2010: the end of the Ulrich era?

After a tough year Personnel Today brought together some respected recruitment and HR professionals to discuss the beginnings of recovery in recruitment, upskilling HR, why the Ulrich model isn’t working, and what talent really means. Plus, three roundtable participants discuss what they think HR’s priorities should be for the year ahead – see videos below. Helen Williams reports.


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HR steps to recovery

Helen Williams: As we near the end of 2009, which areas of recruitment are beginning to recover?

Anthony Pierce: Q1 2009 was so bad it could only pick up from there, and Q2 did make up for some of that. In Q3 and Q4 we’ve definitely seen signs of an increase in HR recruitment. In terms of sector, the banking function went into this recession first, and Hudson’s banking team is now busier than it was in 2007. Judging by that, banking is already out of it, and the HR banking team is getting a little busier as a result.

We will end the year with a higher consultant headcount, and make more profit than in 2008. So things are getting better towards the end of the year. There were headcount freezes over the summer, which have now been lifted. It’s not necessarily new roles being created and suddenly everything’s fine and dandy, but many organisations have now gone long enough without certain roles, and have decided to hire.

Gareth Jones: We specialise in marketing and HR. Marketers continue to be hired, albeit in substantially lower numbers, but at a high enough volume to keep our business in shape. HR business has picked up a little bit.

Most areas of our business have shrunk in revenue terms by around 50%. In briefs in, in other words jobs, it’s down in the region of 75% year-on-year, or certainly 18-months-on-18-months. But our market research business has gone up year-on-year, both in terms of briefs and revenue. I assume a lot of organisations are doing research to understand where they should – or shouldn’t – be spending their money.

Roundtable participants


The HR professionals:

Linda Kennedy,
vice-president, people, at telecoms business Orange

Alex Rickard, head
of HR at financial services firm Towry Law

Kate O’Hagan, HR assistant at publishing group Reed Business Information

The recruiters:

Anthony Pierce,
HR practice leader, Hudson

Gareth Jones, leader, Courtenay HR

Nicola Grimshaw, director, Digby Morgan

Paul Duffield, partner, Frazer Jones

Overall it was a bit like being punched in the first half of the year, and you have to get back on your feet again. Maybe in certain niches you might see a steep upward curve, but I cannot see the recruitment industry growing like that for a number of years. There is a lot of hope, but much of it is fantasy.

Nicola Grimshaw: I think ‘weak recovery’ sums it up. Generally commerce is increasing. June also saw the first recruitment roles coming back. Encouragingly, through the course of the downturn we have had a number of talent management and employee engagement roles coming through, compared to the previous recession when training and development budgets were the first to go. I think this time the people agenda is higher up business leaders’ list of priorities.

Linda Kennedy: I’d support that. Orange has spent more this year than ever before on learning and development and training around talent, attraction and retention. Our focus is on employee brand. The old McKinsey ‘war for talent’ stuff about looking after your top performers has shifted to an emphasis on segregating and focusing on the different elements of the employee population. We’re trying to do some new stuff with our graduates, joining forces with the National Enterprise Academy [NEA, which offers the UK’s first full-time accredited course in enterprise and entrepreneurship]. We’re also looking at managing our contractor spend better. The recruitment process outsourcing area is a huge discretionary spend that has not been managed by HR before.

Helen Williams: What could the HR implications be of Orange’s prospective merger with T-Mobile?

Linda Kennedy: We don’t even know if it will happen yet, but it will certainly be a very interesting time for us, and the key is for HR to be involved right the way through. My aim is to be there up front when the organisational design is done, and ensure HR is represented. The problem is HR is often brought in at the back end in such situations and told to fill the slots, rather than playing an active role in the design.

Helen Williams: In our end-of-term report for HR, our experts are positive about HR’s performance in 2009, and say the most successful HR professionals are those closely involved in the business.

Gareth Jones: Although HR recruitment fell off a cliff this year, we didn’t see a clean-out. The function has grown phenomenally in the past 10 years, and while hiring stopped, and there has been some trimming, we haven’t seen a huge cutback of those roles which were added in over the past decade.

Alex Rickard: That makes a lot of sense. If the economy is on a downward trajectory, who else is going to deal with all the changes around people other than HR. The flip side of that is a lot of HR people out there must feel really battered and bruised, and probably not particularly positive.

We use acquisitions as a major part our recruiting strategy, and while we haven’t made any major acquisitions in the past 12 months, there’s a lot going on at the moment in terms of merger and acquisition discussions.

Helen Williams: How have your HR departments evolved recently?

Alex Rickard: In terms of HR, we looked at how we could be smarter. If you have a good HR team, that team can be good anywhere in the business. Members of my team have been seconded to sales management, or to a change programme. That increases the skillset within the HR department, and gets them under the skin of the operations side of it.

It’s about how to best use the skills we’ve got. It’s short-sighted to say: ‘we don’t need you any more’. Our head of reward is one example of that cross-skilling, having gone into sales management for six months to provide a fresh pair of eyes. This approach makes the HR professional look more robust, and more credible. It can only enhance the business overall.

Linda Kennedy: The recent McKinsey Quarterly pointed out that there are still very few HR people who have been line managers and really understand the commercial side of the business. The biggest skillset the HR function delivers is about understanding return on investment, developing commercial awareness, and being strategic rather than reactive.

It’s a shame this is not moving forward at the pace we would all like. We were having this conversation five and even 10 years ago, and we still seem to be having it. But it’s becoming more and more critical. We are also looking at the reverse – how to bring people from the line into HR. Everything we do involves asking: ‘is this working for you, what are you getting, what do you need?’. We’re looking at cross-skilling, up-skilling and realigning the model to make it work for us, because it’s not working for us at the moment.

Gareth Jones: One thing I mourn is the fact that 20 years ago there were more HR generalists, and it seemed much grittier. You had the rough edges knocked off you in HR, particularly in the manufacturing environment, and got a broader exposure to the business. Now people are graduating and going straight into a specialist role – such as development or reward – as opposed to being a generalist and then maybe specialising later. I miss that broad commercial frontline exposure in the HR function in the people I see coming through today.

Linda Kennedy: I think the Ulrich model has caused a lot of that change. We’re changing the view of our whole model, because we feel that it’s lost a bit of that nitty-gritty, of earning our stripes.

Helen Williams: Is the Ulrich model finally losing favour?

Linda Kennedy: I’ve worked with it in four organisations now, and it’s never actually worked in its purest sense in any of them. The model of specialists in centres of excellence, with business partners in between, and a shared service centre where your high volume transactional HR stuff happens – that hasn’t worked for various reasons. You can’t simply pull everyone together in one room and say this is shared services. People go straight into business partnering without having done the lower level roles, but are expected to have all the answers straight away. And while specialists are great, they can only do so much.

What you lose is that generalist application with someone who’s done a bit of training, a bit of recruitment, a bit of reward. At Orange we need a mixture – specialists, but also all-rounders who understand how the business operates, who can sort out an issue in a call centre, then go into a shop and offer support there too.

Paul Duffield: We’re finding that good mid-to-senior-level candidates want the nitty-gritty of that generalist role: dealing with unions, earning their stripes, rather than being pushed into a shared service centre or into a specialism.

Linda Kennedy: Some people in transactional shared service centres feel their role has been dumbed down, which has affected career development. Once you’re there it’s very hard to move into a business partner role; and once you’ve specialised it’s very hard to move back. So although it has allegedly delivered – not that I have witnessed it yet – economies of scale and more focus on key areas, you lose that end-to-end career for someone coming into HR today.

Anthony Pierce: There’s a danger of making the wrong decision and being stuck with it. If you choose a reward career and are in it for the first five years, that’s it, you are in it forever.

Kate O’Hagan: I don’t think graduates have much of a choice. You need experience to get an HR job, so you’re willing to take on anything to get started, and then you get stuck in that route.

Anthony Pierce: That goes back neatly to the point we were making earlier about HR bringing in people from the line. How often have you looked at a £45,000 HR role and decided to look at a non-HR person for it? You often have a square hole and you need a square peg for it. It’s nice to challenge the boundaries, but you haven’t got time to babysit somebody who has no HR experience. While many organisations would like to do it, often it doesn’t happen.

Linda Kennedy: You have to plan it. We have 220 HR roles, and we fill a certain amount from the line. If you think that way, partner with the right people, you can do it. You can’t just drop them into a role, you have to have a framework and development plan around them, and enough people who do know, otherwise you’re setting up both the individual and the team to fail.

Alex Rickard: I have two people in my team from non-HR backgrounds, who bring a lot of knowledge of the business. I don’t know if they’re going to stay in HR long-term, and I don’t mind, because they are adding so much value now, and they can only add more value if and when they go to whatever else they might choose.

Anthony Pierce: They’ve also created a path that other people may follow. Others will say: ‘those people did it, why can’t we’. We need people to show that it works.

Helen Williams: Until recently people haven’t had other job options, so have tended to stay put. Is that still the case?

Paul Duffield: Good candidates are starting to put their heads above the parapet. There is the wholesurvivor syndrome piece to retention – have businesses been fair with the people who are left? If people perceive that it has been dealt with fairly and sensitively, that will pay off, and those organisations which have invested in this will probably reap the benefits

Gareth Jones: It’s a much more sensitive market now. Your employer brand is wafer thin, because the internet means people can share candidate and employee experiences with the rest of the world within a fraction of a section, just like consumers do with brands. That’s something that organisations have taken a long time to get used to. The recession has exposed that as a huge issue. Employees don’t believe the bullshit any more. You can’t masquerade as something and then not be that.

Linda Kennedy: There is a tool which telecoms businesses use to measure customer satisfaction. We’re trying to build a similar score for HR, in other words to see how our employer brand is perceived. Some of what we’re doing with the National Enterprise Academy (NEA) demonstrates that you cannot have anything like the same proposition for Generation Y that you would offer to a returning mother, or to your senior executives. The NEA teaches people to be entrepreneurs. We’ve given a placement to one young man who made £8,000 running a disco when he was 12. He had the choice of doing a formal graduate scheme, or this. We want to target that group who are young and bright capable, who don’t want to go down that formal route but who would be great for us because they’ve got that spark, that initiative, that drive. They are phenomenal kids.

Helen Williams: So what lies ahead for HR?

Gareth Jones: Organisations tend to be myopic about what talent is. To regard talent as 1% or 2% of the working population is wrong. HR has a role in defining where we should be looking for talented individuals.

In the early 1990s recession was driven by overdue modernisation of industries. This time it has been driven by individuals, and a lot of people who are now disgraced were previously defined as the best you could get, developed and nurtured as top talent. There is a lesson in that, and a real opportunity for HR to start challenging the notion of what a talented person looks like. It could someone who at 12 made £8,000 from a disco. We are too obsessed with qualifications, with certain qualities and individuals. I can’t see anyone else in the corporate mix changing that or having the licence to do that, apart from HR.

Linda Kennedy: And HR has got to get better at metrics, at being able to demonstrate our value-add, because that’s the language the business understands. It has also become too depersonalised – HR could do with putting the human back into HR.

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