Insights

How important is Talent to the Founder/CEO?

Ask any CEO what the most important piece of their business is, and most will say our “talent & people”. That’s ahead of security, technology, sales, the lot.

Yet look at the “Our Team” section of early/earlier stage/growth technology companies’ websites, and you will probably find an HR leader who is a process/functional HR Generalist, and who rarely, if ever, reports to the CEO. Why?

Even companies which have successfully navigated funding rounds will often have a VP of Human Resources (the term itself frames people/talent only as material to be deployed for organizational objectives, like the pieces on a chessboard) but not a People/Talent Executive reporting to the CEO. Again, why?

Forward thinking CEOs choose to have an executive level, experienced People/Talent leader as opposed to traditional HR, reporting directly to him/her. Titles include: Chief People Officer and Chief Talent Officer, we see Talent Leader occasionally and of course, the ultimate “HR” Moniker from the last two decades is CHRO.

It is this executive’s job, in addition to being the confessor to the CEO and the ambassador of the Employee Value Proposition, to validate and build, forecast and understand the types of people and the talent needed in the business over multiple months/quarters down the line. It is also their job to match those needs against the market (also effectively forecasted) and the financial resources of the business, indeed, it is crucial that they partner effectively with the Finance executive.

Specifically, in smaller, high-growth businesses, it is crucial that someone understands the trajectory of the business across every key function: operations, marketing, technology, sales, delivery etc. and has an equal relationship with those functional leaders. It is their job to proactively attract talent in a crowded market, rather than reactively recruiting on demand, and to create a repeatable, quality process that can provide scale, superior talent results and also valuable data.

In high-growth businesses, especially in the tech sectors, the availability of key hires is remarkably tight – take the current demand for Chief Product Officers or Chief Data Officers & Engineering leadership.  Mistakes are ever more amplified in this environment: recruiting the wrong talent can have a devastating cost.  Yet the Talent (capital T) function is often missing or is bundled into the HR Generalist resource.

One challenge is financial: in the cold light of the balance sheet, both the HR and Talent Management roles are all too often seen as an administrative function (and staffed that way), perceived as cost centers, and therefore generally report to the CFO.

The other part of the problem is that the HR and People/Talent functions are often muddled together. It’s easy to see why: HR certainly manages employees once they have joined the business; indeed this function may even be called ‘People’ in your organization. But founders and CEOs must understand the difference between Human Resources and Talent Acquisition/Attraction/Management, and if they don’t, have a senior executive guide them through; because there are equally destructive minefields in both functions. Getting it right is critical.

Plenty of HR specialists may have been recruiters or vice versa, but rarely are both skillsets found in one resource. Generally, one is tactical/transactional and the other strategic/operational. Whilst both roles demand process, technology, and great leadership, you will need diverse resources to handle execution.  It’s a big mistake in a high-growth business to think that a professional Human Resources generalist – even a best-of-breed player – will translate into an effective talent acquisition/recruitment resource.

This mistake becomes critical as a high growth business expands. The Talent activity will become all-encompassing: hiring 100 people in six months is a full-time job, involving outreach, identification of target landscapes, follow-up, candidate experience, branding, value proposition, developing the narrative and marketing of the business.  And this doesn’t include executive-level hiring which demands all this and more.

Who is going to do that work?

You will have guessed already that I am an evangelist for the discipline of Talent Management, but that’s not to say I intend to denigrate the vitally important role of HR. Rather, I feel that a nuanced (and well-resourced) approach, with both strategic and manpower components, will pay dividends: Here is a model process that is scalable, and which I think really works:

  1. Hire recruiters in Talent Acquisition not HR Generalists. Cut the cost, complexity and short-sightedness of recruitment to scale the business by building an in-house, experienced, well compensated, senior talent acquisition team, not HR generalists or practitioners. Full stop.
  2. Partner with contingency firms on hard-to-find individual contributors and middle management needs: Early on, companies typically pay too much for contingency recruiting firms to fill roles.  Using outside recruiters for specific needs is not a bad idea per se; but it should not be your automatic resource for every need – and that’s the alternative if you don’t build an internal group early.
  3. Make better high-level decisions: With a more resilient recruitment architecture in place, the business is better equipped to brief on high-level appointments. Whether that is to an external executive search partner or an internal referral discussion, you will have the time, skills and insight to bring market knowledge & process to all stakeholders.
  4. Implement Systems:  You have systems in other functional areas, so install the systems (technology tools, Social, ATS, HRIS integrations) to make recruitment and Talent management proactive across the business.  These areas of talent activity in a high-growth venture need to operate as if they were part of a much larger organisation, and technology will help a hard-pressed talent team to bridge that gap.
  5. Create the process for an extraordinary candidate experience: It is a shocking reality that candidates can arrive for interview for senior roles in an organisation and find themselves answering the same questions from different stakeholders; or worse still, undergo a “walk me through your resume” session with interviewers. This is a dismal missed opportunity to gain a fully rounded assessment of the candidate. Companies must develop interview guides for each interviewer, with sets of questions independently designed to test specific areas and competencies; like leadership, collaboration, technical aptitude or market awareness, as well as culture fit. There’s nothing new about competency-based interviewing, but early-stage companies (and even many larger corporates) just don’t have it baked into their process. This is the sort of activity through which a seasoned Talent/People organization can add exceptional value.
  6. Own the company’s Talent Brand or TVP – Talent Value Proposition: The business and the leadership, and everyone else in between, needs to care a great deal about the candidate experience. In the age of visibility tools like Glassdoor, there is absolute transparency about company culture and the candidate experience, from initial contact to hire or disposition of their candidacy. Indeed, one big differentiator is that in many environments, sadly, effective disposition of unsuccessful candidates never happens. Candidates (even those who are unsuccessful, indeed particularly those who are unsuccessful) can become evangelists for the experience they had, i.e. “I wasn’t selected, but I was kept up to date throughout the entire process, and they were proactive in every area” etc.  In reality, there is nowhere for businesses offering a second-rate talent experience to hide.