The Time Has Come for Upper Management to Offer Long-Term Contracts to Talent Management Pros

Josh Letourneau Compensation/Cash Money, Innovation, Joshua Letourneau

We’ve reached a very interesting inflection point in the Talent Management world today.  There is no simpler way to put it than to be as straightforward as possible: Upper Management is demanding more of HR, notably Talent Acquisition and Organizational Development.  In fact, the following visual illustrates two critical gaps in perception that are at the root of our crossroads today. Cf_nl_2008_08

When posed with the point, “HR lacks the capabilities to develop talent strategies aligned with business objectives”, only 25% of HR respondents agreed while 58% of Line Managers agreed.  This is a problem.  When posed with the point, “HR is not held accountable for success or failure of talent-management initiatives”, 36% of HR respondents agreed while 64% of Line Managers agreed.  This is an even bigger problem.  The Line Managers are essentially saying, “Not only are you not accountable, but you don’t even have the needed capabilities to do the job.”  Wow.

As I look across the Talent Management landscape, I ask myself what is being done to counter this modern day Battle of Waterloo.  It’s as if Upper Management is sitting across the table asking us this question, (not so) patiently awaiting our response.  Academia is responding in a big way – “Beyond HR: The New Science of Human Capital” (published in May of 2007) was a brave move by John Boudreau and Peter Ramstad toward establishing an actual Talent Management decision science.  “The Differentiated Workforce: Transforming Talent into Strategic Impact” (Becker, Huselid, and Beatty, published March 2009) is another audacious move toward an arena near and dear to my heart — identifying and nurturing those roles and talent pockets that create the majority of customer and economic value.

However, while Academia is stepping up to the plate in a big, big way, I find those of us who actually do the job moving in a distinctly different direction.  Instead of having the intelligent, strategic discussions about Talent Management that the C-Suite is demanding of us, I see our community ducking legitimate response by staying busy in evaluating more and more new technologies.  As Social Media has accelerated the marketing hype within our industry to mirror that of a modern-day bodybuilding magazine, it’s as if we believe that if we stay busy enough, we’ll never have to really “man up”.  Unfortunately, this is an ineffective approach because the time has come to ‘pay the piper’.

The result?  Articles like, “Memo to CFOs” Don’t Trust HR“, “Why We Hate HR“, not to mention a further declining of the average tenure of the Talent Management Professional.  My own research of 100 profiles on LinkedIn shows the average tenure of a TM Pro at 18 months – and in that sense, is it any surprise that short-term reactionary thinking and focus on immediate metrics?  In my humble opinion, this further perpetuates the problem.

So, let’s talk about a potential solution.  How about asking TM Pros to sign 5-year minimum contracts in which bonuses are paid out on incentives tied to long-term economic value creation?  Given that the average economic cycle is 3.5 to 7 years, I’d say a base 5-year contract might do the trick.  As an Executive Recruiter, it’s not uncommon for me to put together 3 year contracts for the V.P. level and higher, so I don’t see this as that much of a stretch.  Think about it – a large majority of our industry is a contingent workforce anyway . . . so instead of signing open-ended contracts at an hourly rate that can be canceled at a whim (one of the bigger value propositions of a contingent force), why not attach to them a time period conducive to moving beyond short-term Wall Street pressures?  Hey, it might not be a perfect solution (if there even is one), but it would be a step in the right direction.