In today’s world of hyper-accelerating change and uncertainty, the people function is emerging from the pandemic as an evolving space of rapidly increasing importance. Where it used to be the case that the competitive advantage of a business was defined by its products and services, it is increasingly recognised that people, talent and culture are critical differentiators to business success.
We are in a rapidly increasing war for talent. In the US in August, traditionally a quiet time in the job market, there were over 1 million more vacancies than unemployed people. Organisations cannot find, hire or develop the skills they need quickly enough. If your employer brand and employee experience aren’t up to scratch; if your leaders aren’t equipped to inspire, retain and develop, and if your people are frustrated, underpaid or shackled by rigidity and the lack of a voice, then your business is failing – however many widgets or services you’re currently selling.

With many organisations undergoing ground-breaking change and transformation, navigating ever-accelerating digitisation, rapidly evolving customer behaviour, seismic social shifts and enormous changes in traditional and potential products and services, organisations without exceptional people functions are going to quickly lose ground.

Simply put, the role of the people function has never been more important.

We’re seeing several key areas that businesses are investing in:

Talent Acquisition

As always, after the economy crunch comes the boom in recruitment, and this function – always the first to be laid off – is the first to be hired. Though this time, there’s a difference. Many weren’t laid off, so the big spike in this area, which looks to be something that will be sustained, is due to growth. Leaders in this space are receiving multiple job opportunity approaches daily. Their teams are the busiest they can ever remember, with a huge influx of work that isn’t subsiding, and an inability to hire enough resource. There is huge demand for recruiters, with some tech recruiters commanding packages more commonly seen for software engineers. In corporate life, talent acquisition as a function has been viewed as a “process” to be managed or outsourced, rather than the future lifeblood of the organisation that in many contexts could help to drive strategic business development or expansion.

The talent pipeline within TA is not strong enough and good talent is often hoovered up by the wider HR function, into talent management or HR Business Partner roles which can be perceived to be higher profile and offer more career potential. Yet not many HR professionals do a stint in recruitment other than at the very top of a function. Historically recruiters came from recruitment consultancy or executive search, but with a very buoyant market and a decreased pool of talent due to the 20 years of credit crunch and increasing internal teams, this isn’t a strong enough source. So where are the internal recruiters of the future going to come from?

Culture, Engagement, Talent and Leadership Development

A job that pays the bills isn’t an aspiration. With increasing numbers thinking about earning a living as part of a lifestyle, creating an environment that attracts and inspires the best and gives a sense of purpose really matters. It requires inspirational leaders who are talent magnets and culture creators. Serious questions are being asked of traditional talent identification, high potential development and leadership development programmes. Who are the leaders of the future? What skills do they need?

In many areas, none more so than technology and digital talent, demand on the external market far outstrips supply. One talent acquisition leader was tasked with hiring 600 employees (in the UK) with a specific technology skillset. An in-depth mapping process demonstrated that there were only 60 people with the right skills in the world today and the organisation needed them in the next 12 months. Against this context, effective strategies to reskill, upskill and build the required capabilities are critical, as is retaining them.

We’re seeing a distinct mismatch between employers’ and employees’ expectations surrounding the hybrid working model. Requirements that appear arbitrary or driven by a lack of trust are resulting in higher staff turnover and limiting the ability to recruit. The communication around the strategy can be a game changer, employees want empowerment rather than rules, even those setting the rules. Employees’ lack of connection to the culture and manager is part of what is fuelling the “great resignation” but creating an inclusive culture in a hybrid environment requires effort, investment and listening.

The interim market too is gaining a different dynamic in this way. We are seeing more candidates not wanting to be included in shortlists where the role won’t allow a hybrid way of working or has limited flexibility in where the person will be expected to work. There is an expectation from candidates that, aside from the initial time required to get to know key stakeholders, interim managers should also be able to work remotely or in a hybrid pattern. Without that, the candidate pool diminishes, with the flipside, of a much wider candidate pool for those businesses ready to engage in flexible working practices for interim managers.

Reward & Recognition

As part of large organisations’ talent acquisition and attraction strategies, the Head of Reward role has become instrumental in adapting the way total reward is constructed to align with the shift in employee expectations and the choice that talent currently has. In a market full of counter offers and multiple offers, getting your reward strategy right is critical and we’re seeing those organisations with strategic yet adaptable approaches winning in the talent attraction stakes.

Along with changes borne out of the pandemic, including demand for more flexibility and remote working choices, shifts in how different generations value total remuneration and earning potential are changing with younger generations demanding their earnings to be constructed in a different way to what has traditionally been the norm. The STI vs LTI approach is much debated in many organisations. Reward functions have a real opportunity to be creative and there is a lot that companies can learn from each other, with many looking to start-ups as inspiration for how to readdress the balance between risk and reward. With this shift in focus and the need to innovate, we have seen a significant increase in the demand for experienced and creative interim heads of reward or reward consultants to breathe new life and strategy into the function.

Digital Transformation

Despite spending lots of money on great tech and in some cases heavily transforming the back-end processes and the architecture of the HR function, many companies still aren’t getting value from HR Technology and remain frustrated by the clumsiness of the employee experience. In the age of immediacy, with high competition for candidates, first impressions, a smooth hiring process, onboarding and insightful people data really matters.

Societal Impact

As custodians of culture, the people function’s traditional role as the “organisational conscience” is shifting to involve a leading role on environmental, sustainability and social issues. The urgency for real tangible change in diversity and inclusion is seeing companies continue to make huge investments in this space, which increasingly is being taken outside of the traditional HR remit. An interesting trend has been HR leaders being asked to contribute to ESG policies and going beyond that to become active participants on investment choices and other business decisions. Several HR Leaders have also made recent shifts out of the HR function and into ESG leadership roles.

In summary, as we see a shift in the role and influence of senior HR leaders within businesses, there has never been a better time to work in the People function. For organisations, the People & Culture function should be a driver of success through shaping culture, driving employee engagement and high performance, and attracting and retaining the best talent.


To have a confidential conversation about your HR, People & Culture leadership function, get in touch with one of our expert partners here.

Savannah Group is an established global executive search and interim management firm specialising in C-Suite and leadership solutions across a number of functions and sectors.

Our HR, People & Culture Practice is a global leader in the placement and career development of the most senior HR leaders, with a proven track record working with multinationals, mid-cap and emerging companies all around the world to find game-changing HR talent.

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