A study by Accenture shows that the war for talent can no longer be dismissed as just another management cliche.
Identifying, retaining and replacing those people who breathe life into an organisation is now a “burning obsession among chief executives”, says Peter Cheese, global managing partner at the company’s human performance practice, and affects business leaders in India just as much as those in the UK.
“More than 60% of the respondents to our annual survey of chief executives said that the inability to attract and retain the best talent is now a key threat to their business, outstripping the issue of low employee morale,” says Cheese.
“While the relationship between HR and senior management is improving – particularly in IT, telecoms and financial services – we believe that chief executives and financial officers need to empower and champion HR more effectively, so that people issues rise to the top of the business agenda.”
We asked four UK-based chief executives to name the people issues that triggered their worst bouts of insomnia, and to rate HR’s performance in helping to solve them.
Chief executive Carolyn McCall says: “Sleeping well is very important to all chief executives.” But the issue of attracting and retaining talent – particularly in the digital age – “is a very real one at GMG”.
“We haven’t lost any key people to digital yet because we have two brilliant digital brands of our own – Guardian Unlimited and www.autotrader.co.uk.
We are able to attract talent from Yahoo and other places to work on these respected brands and give our existing people the kind of stimulation and professional challenge that makes them want to stay.
“We have a fantastic group HR director, Carolyn Gray, who looks after the individual HR strategy of each of our four divisions and sits on our main board, and she performs a strategic role with all our vital people issues.
“I believe Carolyn and I have developed our succession management procedures well. We document, review and monitor succession in each of the four divisions in a highly detailed way. And that’s a policy that is fairly new for this company.
“Aside from our transparent succession management scheme, we also have a regular leadership conference and various emerging leaders programmes, both of which help keep us firmly focused on the issue of talent.
“In terms of the value of HR generally, it depends on who you get to do it. There’s a danger that HR is seen as a functional department concerned primarily with procedures and processes that don’t touch the business in any meaningful way.
“Saying your HR people are your business partners doesn’t make them that unless you have HR people who are business-aware and immersed in your organisation’s overall business strategy. When HR people are concerned predominantly with pay or maternity leave, their skills aren’t being fully used. But when they are genuinely immersed in the business as a whole, HR can work well and be highly effective.
“However, there needs to be mutual understanding and trust between HR and the rest of the business for this to happen.”
The computing giant founded by US entrepreneur Michael Dell has expanded from nothing to become one of the world’s largest companies – worth about $60bn [£30bn] – in just 20 years. Part of the reason for its success, says UK chief executive Josh Claman, is its refusal to play it safe when it comes to hiring.
“The IT sector is risk-averse, and this innate caution does an organisation no favours when it comes to spotting new talent. My policy is to look for the 20% of people with real brilliance and fire, but perhaps with less than ideal CVs, and to give them a chance alongside the more established talent we have in the organisation.
“Periodically I’m let down by people I’ve taken a chance on and this can bring on bouts of insomnia. But I believe that it is by taking chances on people who have the capacity to be innovative and by moving people around – to give them experience and to test them outside their comfort zones – that an organisation can really expand.
“Although I tend to sleep fairly well, Dell’s increasingly broad portfolio of products can also cause me sleepless nights. As we move into newer areas like storage, servers and printers, the intricacies of allocating different people to different streams of investment is becoming more of a concern, as is balancing our short- and long-term needs.
“I’ve worked in companies where HR has seen itself as a support function and has not done itself justice, but that is not the case at Dell. We have some HR professionals here who have been around for a long time and know where some of our key people have performed best – that is a great help to me as chief executive.
“Human beings are complex animals, but if you can capture and nurture the spirit that a small proportion of people seem to have, then you have a valuable asset indeed.”
A successful London ad agency with clients such as Ikea, Clarks Shoes and Strongbow to its name, St Luke’s employs 85 staff – all of whom are shareholders – including an HR director who is involved in all areas of hiring, retention and remuneration. Everyday issues are raised with the management via four nominated staff members, who are rotated every year.
Neil Henderson, one of the founders of the business and its joint managing partner, says: “People are fundamental to us and I feel passionate about the importance of the HR function.
“I don’t have a factory or a complex distribution system to worry about at night, so a lot of my attention is focused on my people and their wellbeing.
“When they’re up and things are going well, they do great work and have great relationships with clients, but when they’re down or uncertain about things, they tend to think the worst about the agency and their own performance, and sorting them out can take up too much of my time.
“This is an industry with a high staff turnover – four years in an agency is the norm – and if it’s time for someone to move on, then it’s up to me and HR to support them.
“We like people to leave with their dignity intact and without their confidence being shattered. Although advertising is traditionally a sink-or-swim game, we would rather people went on to do something creative elsewhere than be fed to the lions. We want to show people respect and treat them properly – whether they are joining us or leaving us.
“There is undoubtedly a ‘cocaine culture’ in some ad agencies, but not in ours. We have a moderate culture here, and I’m glad to say that people who enjoy the excesses of the ad business don’t tend to come through my door.”
As the chief executive of an authority that has made dramatic improvements across its range of services, Darra Singh says he sleeps much better than he used to. However, he is not complacent.
“While we have a challenging agenda to tackle, we have capable staff, so I am confident we will make a significant difference to Ealing as a place over the next few years.
“People issues are partly to blame for my rare outbreaks of insomnia, because we are recruiting for an HR director. We have upgraded the role in recognition of the crucial importance that HR has to an organisation such as a council. In terms of helping me with people issues, I look for significant support and creativity from HR.
“An example is the Leadership Incentive Plan for our corporate leadership team. Not only does this require the director concerned to have achieved their business plan within budget, but also it is only available if Ealing’s residents consider that the service they receive from the council has improved over the past year.
“Our staff are important to me, both behind the scenes and at the point of customer contact, as without them the council would not be able to provide its services efficiently and on budget and in a way that meets the needs of the community.
“As the largest employer in the area it is important that our workforce reflects the diversity of the borough. Overall, we achieve that, but there are gaps in particular areas that we are tackling.
“I have high expectations of our HR function and we are adopting a new explicit model of HR. Our business planning process ensures that line managers are primarily responsible for areas such as managing performance and sickness absence, with HR enabling and supporting this work.
“There are huge opportunities and challenges for local authorities to make their areas better places to live and work in. Our staff are key in the delivery of this, and HR is the key enabler.”