It’s a question as old as time, do you invest or cut back in the face of turbulent times? An unprecedented storm in the global pandemic and now a bumpy ride with the economy, it’s enough to make business leaders feel weak at the knees. The competitive market for HR talent right now reflects changing times for the profession given the significant shifts in how we all work. The People Agenda is paramount to achieving sustainable business for the modern world and the competitive market for HR talent is clearly indicative of businesses deciding to invest rather than cutting back in this area. So, what do you invest in? There are so many trends and themes that have accelerated since the start of the pandemic, we’ll take you through some of what we’re seeing in our day-to-day in the Healy Hunt HR team.
The Rise and Rise of HR
I have worked in HR recruitment for two decades, during which time the profession’s profile has risen. HR is now recognised as a key strategic discipline and Chief People Officers have rightfully taken their seats at the C-Suite table. HR, and “Personnel” before it, always touched on every part of the business. It now applies a stronger influence at every level, driving executive decision-making at the top while still being nimble enough to apply policy effectively at the individual employee level. Given the shift here, we’re seeing both an increase in hiring for HR/People roles to be integrated within core business teams as opposed to the siloed HR or Personnel department in the days of old. Higher expectations of what a modern HR professional looks like are also prevalent as there is an evolving new set of general and specialised competencies to perform to the highest level.
HR in Financial Services
My consultancy, Healy Hunt, focuses most heavily on Financial Services. I still work with clients from all industries, but my increased involvement in this sector highlights to me how transferable the HR skillset is. Although Financial firms are justifiably cautious in seeking previous regulatory exposure, there is more scope and appetite in the current marketplace to bring in talent from other sectors, particularly Legal and Tech, the former due to the regulatory crossover and the latter in driving innovation.
Big banks are exciting places for HR professionals, the scale means that an HR role in another industry might be scaled up to a full department, and institutions in this sector tend to be at the vanguard of trends like DEI and ESG, which throw up new HR opportunities of their own. Across other verticals that we cover, there are different challenges and opportunities like the international scope of Global Transaction Banking, the steep growth phases in FinTech and the drive for modernisation in Asset Management and Specialist Lending.
The Hybrid Working Revolution
The introduction of hybrid working was a sea change in professional life. It was especially tough for HR, without even touching on the recruitment and training challenges of the lockdowns themselves. The function emerged into a post-pandemic world where remote working had become a key bargaining chip in reward negotiations. The inertia of employers to update remote working policy for existing employees led to the churn that was dubbed the Great Resignation. In turn, this led to increasing salary demands as employers tried to secure top talent.
Another challenge for Talent Management teams was that the lockdowns led individuals to re-evaluate their priorities, while some wanted greater meaning and better work-life balance, others were pushing for more office time and bigger salaries. Not only has this seen the role of Total Reward teams becoming more complex, with a strong trend towards personalised packages, it also means that the required profiles and skills of new hires have changed. In addition to reward expertise, employee engagement disciplines are in demand as companies try to bring together a more diversified workforce.
The acceptance and rise of remote working has also fast-tracked the globalisation of workforces as top talent can work from anywhere as a result of the pandemic-driven investment in tech. HR global mobility teams are pivoting to a focus on delivering engagement models for skilled workers who choose to work wherever they like. Globally geared reward teams are also useful here as there is a perceived opportunity to offset UK salary inflation by using talent in lower-cost countries.
DEI and ESG
The other big HR-related trends to accelerate during the pandemic were DEI: diversity, equality and inclusion, and ESG: environmental, social and corporate governance. Both of these address the need of individual employees to feel valued and included, for their work to have meaning, and for their employer to express their values.
Diverse, inclusive workforces have been shown to outperform homogenous ones and not just by maximising the available talent pool. Decision-making is improved when people with different perspectives are involved and it is easier to design products that target different market segments. There is also the feeling that if an employer welcomes staff from any group or background, then individuals are valued and there on merit.
I work with HR departments that are producing carefully scripted job descriptions which avoid the structure and language that can deter female and minority candidates from applying. There is currently less emphasis on degree qualifications that don’t always guarantee quality candidates but do tend to impose invisible barriers on people from some backgrounds. Efforts are also being made to carry the approach through by keeping assessment, recruitment and onboarding processes as inclusive as possible.
The challenge for HR leaders is to create organisational cultures that deliver on inclusive promises, a huge task that requires leadership from experienced, high-calibre professionals. This is one of the pillars of ESG, a drive to create responsible organisations that contribute to wider society while supporting their employees, including with mental health. Once again, there are bottom-line returns from ESG in terms of the employees and investment that it helps to attract. In some companies, HR holds outright responsibility for ESG, but in general, they either contribute to company-wide groups or new divisions are created. We’ve set up a dedicated ESG division as a result of the demand here.
Investment in Tech
This is one of the biggest items on the HR agenda. Digital transformation demands an alignment of strategy, structure, people, processes and technology. CPOs are investing heavily in HR Technology products that need to be supported by people with specialist HR Operations and HR Technology skillsets. New tech ecosystems enhance the capabilities of different HR functions, examples include bringing governance, analytics and gamification to performance management, driving efficiency in high-volume talent acquisition, and automating learning and compliance programmes.
Identifying the right talent, people whose HR expertise is underpinned by advanced digital capabilities, helps to build HR divisions that can deliver digital transformation and prepare for future challenges. These new digital HR roles produce systems that allow corporate strategy to be implemented effectively by enhancing and personalising the employee experience at the point of delivery. This is a large and dynamic topic that we will revisit in the near future.
Despite the inevitable cost-cutting decisions that might come from uncertain economic times, in our view, the businesses that come out unscathed will be the ones to invest in their people in a way that reflects the changing tides of the HR profession. Our perspective comes from being at the heart of our clients’ hiring decisions every day, but we’d love to know what you think from where you stand. Get in touch if you’d like to join the debate!