Bridging The Global Talent Gap: Connecting Human Resources And The Board

An overwhelming eight-in-10 global Human Resources executives believe they should have very significant, ongoing access to and dialogue with the Board of Directors to align human capital practices with expectations for better enterprise performance in 2011.

The results of a recent survey by TRANSEARCH International also reveal, however, that only six-in-10 of the same Human Resources leaders have established that level of strategic access and dialogue linking talent and business strategy within their companies.

That's especially problematic for investors and employees alike. The survey finds that 87 percent of Human Resources leaders see the performance of executives in their companies' senior-most management roles ranking as the single biggest determinant of corporate financial performance or as one of the three biggest influences on enterprise goals over the next 12 months.

Yet absent the alignment of Human Resources' oversight of talent management, succession planning, executive retention and performance measurement practices and the board's oversight of compensation policy, CEO succession and enterprise talent strategy, some organisations may unwittingly inhibit their growth potential.

One way of synchronising the mutual interests of talent and performance linkage is to increase the representation of former and retired human resources executives on corporate boards. At present, the TRANSEARCH survey documents, two-thirds of boards include at least one non-executive director with significant experience in corporate human resources.

Giving the Human Resources function the proverbial 'seat at the table' it has long advocated and making leadership, talent and succession issues a far more regular element of the full board agenda would undoubtedly enable a consensus around investing to attract and retain superior leaders.

That's important, global business leaders agree, because organisations with the capacity to build and recruit top management talent find they have a distinct advantage over the competition when it comes to attracting world-class leaders.

"There is indeed a talent and performance multiplier premium for organisations that build their culture and leadership team around exceptionally talented and committed leaders who give their best and stay long enough to be accountable for the results," says TRANSEARCH International global chairman Alain Tanugi.

"What was true before the global recession remains true, and perhaps even more pivotal to corporate performance in 2011," Tanugi adds. "Creating and sustaining a competitive edge in today's global business environment hinges on human capital."

The linkage of organisational talent and business performance is at the center of the business strategy championed by global business leaders such as Carlos Brito, chief executive of Anheuser-Busch InBev and Jack Welch, the former chairman and CEO of General Electric. Both men presented their viewpoints on the Human Resources mandate that drives performance at the World Business Forum earlier this year.

Brito contends the quality of the leaders a company is able to attract, recruit, promote, develop and retain on a consistent basis is the primary differentiator of companies that outperform and those that routinely fail to meet expectations.

The ideal, Brito asserts, is when great leaders find themselves surrounded by and challenged by other superior leaders. Under those conditions, individual business managers push themselves to be their best, and, like a magnet, they attract others who want to work with the best to innovate, elevate and grow their careers.

From his perspective, Welch says, the quality of the executive team and those in key contributor roles has a direct impact on business performance. The team with the best talent usually wins, and the leaders with the capacity to hire and promote people who are smarter than they are usually go on to leave the most positive legacies with their employers.

For Welch, known for his aggressive action on underperforming managers, the essentials of Human Resources - namely, talent scouting, talent development and performance measurement - all equate to improved business results.

To achieve those goals, more global companies are creating a specialised Talent Management function to focus on creating and measuring the enterprise-level results long driven through a Human Resources function also responsible for a variety of more tactical workforce issues such as payroll, benefits and relocation.

According to the TRANSEARCH International survey, 31 percent of global companies who participated indicated their organisations have done so to more effectively and consistently track human capital return-on-investment and its impact on business growth.

As investments and paybacks on human capital become more transparent to management and the board, Human Resources will be more suitably positioned to present both with options for leveraging human capital to meet long-term business and investor expectations.