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June 2010

 

Nick Saalfeld founded MoneyWorld (now MoneyExtra), the UK’s first personal finance website; and was Business Editor for AOL for three years. He now runs a media consultancy, Wells Park Communications, and is a director of two further companies. He blogs at www.truebusiness.co.uk

 

Are us Brits having "people issues'?

Us Brits are a touch squeamish about “people issues”- which is why I think the name for HR changes every five years or so. Back in the 1970’s, HR was handled by the Personnel department. Since then, we’ve made our way through Human Resources, Human Capital and Talent, to name but a few euphemisms for “Getting the Right People In”.

Yet the people in an organisation are its most valuable asset, and in my opinion are becoming ever more so. Everything I see suggests that knowledge and expertise in any one sector is becoming less available for free, and locked inside the heads of a much smaller number of essential individuals for any one sector.

Let me give you a few examples:

• I spent much of last week at a Start-Up Centre in East London, helping potential new businesses get off the ground. These were not large companies but one-man-bands; individuals armed with nothing more than a great idea. Universally, all reported that their experience of Business Link, Job Centre Plus and other government organisations could best be described as “lacklustre”. The government is clearly not able to deliver business expertise on a grand scale.
• What about the banks? Larger companies can rely on having an individual contact within their bank; but the majority of organisations have no hope of dealing with a named banker; and certainly not with someone who can offer sector-specific knowledge. Even if both these barriers were crossed, banks will unstintingly represent their own interests in these troubled economic times, and the business literature is strewn with tales of banks withdrawing funding without any explanation. So - you can’t rely on your bank for support or knowledge.
• And then there’s training. As the economy falters, training has become one of the first victims. Some professions (legal, medical etc.) require ongoing CPD for formal accreditation to be retained; and a small number of organisations (the BBC, for example) retain a reputation for nurturing their talent. However, these are the exceptions, not the rule. Rather, individuals gain their experience and knowledge by moving between jobs more quickly. As they move, it becomes less economical for a company to train them (after all, they’ll be gone within 12 months) and so the cycle of underinvestment in talent is self-perpetuating.

All these issues suggest that recruiting genuine talent is becoming harder than ever, and more important than ever. A board needs to consider not just professional experience, but also team fit, strategic approach, knowledge of processes, skills in change management and any number of other silos of knowledge. The gulf between the skillsets required for line or operational management and board-level management is growing fast.

This is why, despite economic unpredictability, interim management deserves to carve out a stronger niche for itself. It takes six months or more to find the right candidate for a senior position in some organisations, and succession planning does not always go according to the script. Whatever the cost of keeping a key role filled, the price of weak or underskilled management is higher in uncertain times, not lower. Perhaps “Talent Management” isn’t such a bad name for HR after all.

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