Talent crunch in city HR

The link between HR and business performance has now been proved, according to Mervyn Davies CBE, Chairman of Standard Chartered Plc. He says in his foreword to Talent Crunch in City HR, new research commissioned by Oakleaf Partnership, HR plays a critical role in corporate competitiveness. In previous years, that statement would have been regarded as just a belief. However, over recent years, the link between people and business performance has moved to fact, supported by robust quantitative research on performance and engagement.

At Standard Chartered, we know from our own research that employee engagement is a leading indicator of business performance. We have proven positive correlations between high engagement and profitability, productivity, employee retention and customer loyalty.

Talent Crunch in City HR aims to understand how well equipped HR professionals are to deal with greater business demand and whether the talent exists within HR departments to deliver what businesses now require.

In the Financial and Professional Services sector over half (52%) say HR is listened to and works in partnership with the business. For 41% of organisations HR is represented on the board but for an equal number of companies there is no HR representation on the board.

Richard Colgan, Joint Managing Director of Oakleaf Partnership, says: Our research shows that for three quarters of respondents the people strategy invariably follows the business strategy and this suggests a lack of senior level HR input at a strategic level.

One way that HR can improve its influence is to increase the use of HR metrics as 59% of respondents are highly likely to do. To move away from the highly operational and administrative burden that still characterises many HR departments, 56% are highly likely to increase HR self-service via improved technology and 24% are looking to move to a shared services HR model.

Mervyn Davies offers this advice to HR professionals: The HR function needs to speak the same language as the rest of the organisation. Oakleaf's research shows that this is being increasingly recognised by HR functions and I am pleased to see the obvious desire of HR functions to demonstrate their value to the business through the use of metrics and hard data. Having quantitative measures changes the conversations HR can have with the rest of the company and will help move the common perception away from HR as an administrative function towards HR as a strategic function.

Talent Crunch in City HR also researched whether there is enough talent within HR departments to deliver on business demands. An overwhelming 87% say that there are not enough quality HR professionals within Professional and Financial Services.

While jobs are being cut in many City firms, HR still needs to ensure that it can find the best possible talent. To do this Talent Crunch in City HR shows that HR departments are having to broaden their horizons when recruiting. 59% say it is highly likely that they will hire externally from other sectors, 31% will grow their own by increasing graduate intake and 48% will proactively target more diverse candidates. 44% of organisations will also increase the internal and international mobility in HR, however, disappointingly only a quarter of HR departments will look to hire more candidates into HR from the business.

Mervyn Davies says: Improving the businesses' perception of HR functions is particularly important in the current climate. We are going through difficult times and things will get worse before they get better. HR functions need to protect themselves from the inevitable tightening of budgets and rationalisation of headcount.

Martyn Wright, Joint Managing Director of Oakleaf Partnership, concludes: Our findings from this report have shown that HR in the City is under pressure - to perform, to attract the right talent and to meet the increasing expectations from the business. City HR professionals are going to have to become more imaginative about how and from where they recruit talent and how they deliver services to the business to allow talent development.