CEO TalkBack: HR’s Role in the Perfect Storm

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By Natalie Michael, CHRP

As a leadership coach, one of the things I think about most often is the future and where the world of work is headed. Personally, I appreciate the fact that I can work with clients from around the globe, respond to email while watching my daughter do cartwheels at gymnastics, and that more strategic work is becoming available as baby boomers start to put their retirement plans in motion.

Alternatively, I also worry about rising interest rates, feel trapped by real estate prices, and dream about earning more money. So, when I talked to three CEOs about the disruptions they were seeing in business, and how HR can help I was fascinated to learn that they are thinking about the same things I am, and more.

Ultimately, they are asking: How do we give people more of what they want, yet manage cash constraints and the downside of too-much-too-fast?

Disruption 1:  Rising Costs, Shrinking Talent
One of the biggest disruptions in business is upward wage pressure and fixed budgets mixed with a talent crunch. Neville Israel, the CEO of SunRich Fresh Foods puts it well:  “Right now the world of work is a perfect storm for disruption—the talent pool is tight and the cost of living is high.  Throw in the exchange rate and costs are even more inflated.  Yet, in today’s climate, CEO’s are not in a position where they can pay way above market, so they have to create a positive culture and find other ways to develop talent. The reality is that the employee of today and tomorrow has different needs, so I look to HR to be at the centre of this. They need to understand what employees need, get to the heart of it, and find ways to communicate so our value gets through. Paying more (and more, and more) is just not an option for us.”

The same thing is on Hendrik Zessel’s mind as managing partner of Cushman and Wakefield Vancouver, one of the most successful commercial real estate firms in the world.

Zessel wonders, “How far should we be going to keep good talent? I want to keep them, and I want to develop them, yet I can’t always go outside the pay band. I wonder:  How do I give employees value and a career path without upsetting everyone else?  It seems to me that employees, particularly Millennials, want challenge, lifestyle, and cash.  If HR can give me creative ideas for meeting these needs while helping us run the business and serving clients I would like to hear them.  We can’t keep throwing cash at everything because it creates disruption and entitlement.”

Disruption 2:  One Big World, One Tight Group
Another disruption is that the workforce is more widely distributed and this trend is only going to grow. It begs the question: How do we create a feeling of closeness, and a strong culture from a distance?

Israel says,  “In our world our key message is the same: people are our priority and their success is our success, but what is changing is the medium we use to communicate this message.  We have to use technology more, find new ways to collaborate, and I want HR to be able to adapt key messages to different cultural groups.”

Hendrik concurs, adding,  “It seems like the millennials need more hugs, and mentoring. I can’t be that high touch with everyone all the time.  It’s helpful when HR is out there communicating the value proposition, putting people’s work and talent into a broader context, and really taking the time to understand and meet people’s needs.”

Disruption 3:  Invest Retain, Not Invest Drain
It can get frustrating when CEOs put a lot of time and energy into developing people only to have them leave.  In some ways, this becomes the ultimate disruption, especially when the people leaving have made a positive difference to the culture and business.

Hendrik explains, “When we go to bat for someone and they leave it is frustrating for everyone.  Recently, we gave someone a $10,000 raise only to have them resign two weeks later. I believe part of HR’s role is to stay close to people, and to build trust with them. When HR can influence people and put their issues in a broader context it helps.  Employees need to understand they have it good in our firm, and how we compare to other companies out there. I believe HR is part of our “high touch” strategy, especially when both older and younger employees have rising expectations.”

Kevin McCrum, CEO of Best Service Pros, a “Best Managed Company in Canada” would also like to see HR develop trust and influence with others—yet he goes one step further.

“My hope is that all HR people take some sales training in their career.  It’s not that I want them to be sales people per se, yet it’s important that they can get their ideas across, and influence people, and it’s helpful when they are effective at overcoming objections and negotiating,” says McCrum. “For me, it’s all about hiring the right team and then helping them to grow.  Technology is key for training in a distributed workforce, and when HR has headhunting and sourcing skills it really helps our business grow.”

What’s clear to me from these comments is that more than ever, HR can’t afford to be in a silo because figuring out what people want, and delivering it in ways that the business can afford, will be an ongoing puzzle over the next decade.  Moreover, as per the feedback from the CEO corner, technology, communication, and culture will only grow as critical competencies in the future of HR.

Natalie Michael and Michael Timms are presenting at HRMA’s 2016 Conference + Tradeshow. Their session, Succession Planning That Works, is on Wednesday, April 27. For more information on this and other sessions, please visit hrma.ca/conf2016.

Natalie Michael, CHRP is a CEO and executive coach with The Karmichael Group and a MacKay CEO Forums chair. She coaches executives who want to extract more meaning from their work, refine their leadership style and be more influential in challenges (and sometimes political) environments.

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