The Role of HR in the Age of Talent

A Report from the Human Capital Institute & Vurv Technology

“The human resources trade long ago proved itself,
at best, a necessary evil – and at worst, a dark
bureaucratic force that blindly enforces nonsensical
rules, resists creativity and impedes constructive
change.… it is a career graveyard for people who can’t
make it in other parts of the business.”
~ “Why We Hate HR,” Fast Company Magazine, Aug. 2005

W
hen Keith Hammonds made this provocative Yet it remains an open question as to who will lead talent
statement three years ago, the US had only recently management in organizations. Hammond’s quote above is
shaken off the economic effects of the dot-com undoubtedly one-sided but it contains more than a grain of
implosion and September 11. Since then, the global market for truth. A similar sentiment was expressed in a Fortune Magazine
competent, skilled talent has gone from emergent to intense. article in 1996 in which the author described HR as “the last
bureaucracy” and recommended that it be “blown up.”
Between May 2006 and today, unemployment among four-
Will HR take advantage of the tremendous opportunity that
year college graduates in the U.S. has averaged about 1.8
our nascent “Age of Talent” presents or will it remain “a dark
percent. In poll after poll, CEOs and corporate board members
bureaucratic force?” One thing is clear, according to the almost
rank acquiring, retaining and engaging talent as the most
800 respondents to our survey; HR is not a career graveyard.
challenging business problem they face. In 2007, the Economist
Overwhelmingly, it is a discipline of choice for professionals and
Intelligence Unit reported that “human capital risks,” related to
executives seeking dynamic challenges and a role that fits their
“loss of key personnel, skills shortages and succession issues”
background, education and career aspirations.
had become the number one risk to global business operations.
At the same time, Deloitte reported that among its “Technology As the questions surrounding talent management mount,
Fast 500,” the greatest challenge to continued growth was in how HR responds will determine the direction in which the
“finding enough talent.” profession will evolve. And there are just two possibilities – up
or out. This paper examines which scenario is the more likely.
There have been countless books, articles and reports
produced in the past few years echoing the above and arguing
that talent is now the key driver of our global knowledge
economy. But the challenges are not limited to scarcity. The
makeup of the workforce itself is becoming more complex,
while globalization, shifting competition and the need to
innovate test organizations’ talent to the limits. Thus, talent
management is not only among the newest and most important
business disciplines; it may also be the most esoteric and
difficult of sciences.

1. Bureau of Labor Statistics (see: www.bls.gov)

2. “Best Practice in Risk Management,” The Economist intelligence Unit, 2007

3. “Growing their own – Nurturing talent in a tough environment,” 2007 Global Survey 4. “Taking on the Last Bureaucracy,” Thomas A. Stewart, Fortune Magazine, January 15,
of CEOs in the Deloitte Technology Fast 500 1996
Executive Summary

“Leadership in HR does not have the respect of

organizational leadership. Until that is resolved, we
are overhead.”
“We have made great strides in moving from a traditional
benefits/comp group to a business partner, with strong
growth in learning, leadership and talent. Developing
a comprehensive people strategy is one of the top three
executive goals for 2007-08.”

The comments above are on different ends of the spectrum Other key findings include the following:
but they are representative of the more than 200 that were
submitted by HR and non-HR professionals for this report.
 HR is making progress. 66% of respondents state that HR
is either respected or highly respected and occasionally or
HR is a profession in transition. Despite C-level consensus frequently consulted on corporate strategy.
that talent is the pre-eminent differentiator – the last source of
However …
competitive advantage in our service and knowledge economy
– HR still does not enjoy the respect that other parts of the  Across multiple measures of business proficiency and
business have long been used to. knowledge, there is an alarming lack of expertise among
senior HR leadership.
HR challenges are getting respect. The term “Talent
Management” is now part of the corporate lexicon and has  Despite the impact and importance of globalization, HR is
become a board level concern. Yet the HR profession, which on the sidelines. It is regularly involved and consulted on
evolved from “personnel” in the 80’s and 90’s, seems unable global strategy less than one-third of the time, even where
to make a definitive move up the corporate ladder – in prestige it directly effects the workforce.
or influence. In some ways, it’s almost as if corporate leaders  Respondents’ top current challenges are attracting and
have made a collective, unconscious decision that talent engaging talent, succession planning, and leadership
management is too important to be left to HR. identification & development. Over the next three years,
Progressive and credible HR executives agree – at least in respondents expect specific skills shortages, finding
part. Across the board, leaders say that talent management is leaders and successors, and retaining & engaging top
the most difficult, least understood and most important thing talent to be their main challenges.
for organizations to master. Accordingly, the most successful
organizations make talent management a priority for every
leader, manager and supervisor while leveraging the expertise
of a reinvented (and often bifurcated) HR group. This, and the
points below, represent the central findings from our study.
But HR is unprepared for the future. Less than
one in five respondents assess their organization
as being “prepared” or “well-prepared” to
address their key current and future challenges.
Part One: The State of HR

Virtually all of the HR professionals, managers and executives

Figure Two: “What position represents the head of HR in
who responded to our survey are in HR or Talent Management
your organization?”
by choice. For most, their HR career journey is linked to their
educational choices. For many, the profession represents one
of the most important and dynamic parts of the organization.
Few are in HR because they see it as a fast track to senior
executive ranks. A sizable group claims that they aren’t in “HR”
anymore, they’re in Talent Management (figure one).
HR is changing profoundly. Its slow march to strategic
relevance has been hampered as much by its negative
reputation as by economic setbacks that periodically diminish
its urgency. Nevertheless, solid gains have been made.
Despite the fact that only about 15% of organizations employ
a chief level officer for HR or talent management (figure two
above) almost 60% of heads of HR report directly to the CEO
(figure three).

Figure one: Why are you in the HR profession? Figure Three: “Who does the head of HR report to in your
organization?”

5. “HR Transformation v2.0: It’s all about the business,” Mercer Human Resource
Consulting, 2006

6. Lawler, E. E., III and Mohrman, S. A. (2003). Creating a Strategic Human Resources
Organization: An Assessment of Trends and New Directions. Palo Alto: Stanford
University Press.
7. Note that our questions were aimed more at understanding “mindset” than in
calculating time spent in various activities.
More impressive is the growing appreciation for HR at the Figure Five: “In my organization, HR is more focused on:”
strategic level. A full two-thirds of respondents said that HR is
either “important, respected and occasionally consulted with
on corporate strategy” or “very important, highly respected and
consulted with frequently on corporate strategy.” (figure four
below)
These findings are nearly identical to Mercer Consulting’s 2006
survey results on HR transformation in which 67% stated that
HR is seen as a strategic partner and participates in strategy
decisions and/or strategy discussions.
According to our respondents, the mindset of HR is slowly
becoming more strategic as well. Across a range of ten
questions which asked respondents where they focus their
time, the results were almost evenly split. The ratio of what can
be termed an HR mindset versus a talent management mindset
is about 50/50 (see figure five and appendix one for results from
each question).
While direct comparisons are impossible, these results
contrast sharply with findings from research conducted by
HCI VIEWPOINT
USC professors Lawler and Mohrman in 2003, which reported
that, at that time, only about one-fifth of HR’s time was spent
on strategic work. Findings from the previously cited 2006 What is Human Capital &
Mercer study, on the other hand, were very similar (a 50-50 Talent Management?
split). While being “half-strategic” is no cause for celebration,
it does appear to represent progress compared to Lawler and
Mohrman’s findings from four years ago. Human Capital Management is a new business
paradigm that considers people to represent a
capital asset, rather than a set of costs. It is the
foundational concept for talent management,
in that leaders must adopt a new mindset and
practices to replace the century-old imperative
Figure Four: “In the view of the C level executive team, HR in my for cost control, with a new economy focus on
organization is:” investment return and business impact.

Talent Management is a new business science

that integrates workforce planning, acquisition,
development, mobility and measurement into a
strategic discipline that spans functional silos
and optimizes talent throughout the employee
lifecycle. Talent Management enables leaders to
create competitive advantage through engage-
ment, and the application of intellect and innova-
tion in a global, interconnected economy. Effec-
tive talent management is integrated and aligned
with the organization’s mission, core objectives,
values and capabilities.
“External forces will
inevitably play a part in
shaping the evolution of
the HR profession, but HR
executives must also drive
the necessary changes.”
HR Leadership
External forces will inevitably play a part in shaping the
evolution of the HR profession, but HR executives must also
drive the necessary changes. A daunting set of skills and
knowledge will be required for success. The modern talent
management executive will be multidisciplinary – a strategist,
psychologist, salesperson, speaker, leader, coach, consultant,
and among the organization’s most knowledgeable authority
on globalization, outsourcing, sustainability, corporate social
responsibility, technology, finance and governance. Of course,
HR leaders now and in the future must also be masters of the
organization’s business and its industry.
In this regard especially, the profession is not poised for a Figure Six: Proficiency and Knowledge of the Senior
quick transformation. More than half of our respondents are HR HR Team
executives, yet they judged themselves nearly as harshly as did
HR managers and practitioners when it came to assessing their
proficiency and knowledge across a range of business arenas
(figure six).
Senior HR leaders were judged least knowledgeable on matters
pertaining to globalization, outsourcing, workforce integration
(post merger) and financial acumen (see appendix two for
complete results). In aggregate, leaders were assessed as
“expert” only 22% of the time across a range of eight related
questions. Worse, non-HR respondents rated HR leaders as
expert in just 15% of scenarios (figure six).

Ahead Down
Under? 59 of our respondents were practitioners, managers and executives
from outside of North America (45 of whom were from Australia and
New Zealand).

 HR reports directly to the CEO in 71% of companies in ANZ versus

58% in NA.
 78% of respondents from ANZ claim that HR is either respected or
highly respected and occasionally or frequently consulted on corporate
strategy versus 64% in NA.
 32% from ANZ assess their organizations as being well prepared or
very well-prepared to address coming talent management challenges
versus 18% in North America.
Part Two: HR Challenges

In an article for the Harvard Business Review published in

2005, Felix Barber and Rainer Stack of the Boston Consulting
Group said that today:
Figure Seven: Proficiency and Knowledge of the Senior
“… even slight changes in employee HR Team
productivity have a significant impact on
shareholder returns.”
They were commenting on the remarkable increase in
people costs versus capital costs most organizations have
experienced over the past two decades.
The authors went on to note that the critical resource of
most businesses is no longer capital, but “employees who
must be motivated and retained.” They said, “…the fact that
companies don’t own their employees, as they do their capital
assets, is why most methods for valuing human capital on
balance sheets are so tortuous.”
Torturous as it no doubt is, talent management is with
measurement, analysis and fact-based decision-making.
This transformation from “art” to “science” will be among the
most difficult for HR to make. As the results from figure seven
(opposite) demonstrate, less than a quarter of HR leaders
have the financial competencies necessary to speak the Figure Eight: HR Involvement in Global Talent Management
language of business.
Results from related questions (see appendix 2) are very
similar, in that only 26% of HR leaders were judged expert
in measurement/reporting and data analysis and just
24% expert in demonstrating the value of HR and talent
management to the organization.
Beyond finance and measurement, HR will be challenged, like
the rest of the business, to foresee, respond to and act on the
threats and opportunities brought on by globalization.
These challenges are as yet barely understood. For western
workforces, globalization accelerates the imperative for
innovation, creativity and productivity. For stewards of
talent, it demands a deeper understanding of international
economics, laws and culture, as well as a range of new
expertise in issues as esoteric as “captive” versus “third-
party” offshoring.
On the series of questions related to global talent
management and business (including global sourcing
of talent, foreign assignments, cross-border mergers &
acquisitions, and global talent management processes and
practices) HR is apparently involved in less than one-third of
initiatives (figure eight).
 “Financial acumen will
be more important to HR
professionals when senior
line managers start to
recognize that we have a
financial impact, HR is still
often viewed as transactional
and process oriented.”
~ Lester Levine, Director of HR at Day & Zimmerman

Given the importance of global business and the critical need

for organizations to compete internationally for talent - including
remote virtual workforce acquisition and management - it is
somewhat alarming that HR is so far behind in this respect.
(For results from the series of nine questions related to global
business and talent management, see appendix three).
In addition to a more global workforce, organizations today
and in the years to come will surely see greater diversity, in
part related to the aging workforce. There are today more
women, more visible and ethnic minorities, more generations Figure Nine: HR’s Greatest Current Challenges
in the workforce and more disparate types of workers – from
contingent to virtual – than ever. This trend is accelerating faster
than most organizations can respond.
Nevertheless, despite media coverage and the warnings of
pundits; fact-based HR, the aging workforce and globalization
are, according to our respondents, not among HR’s greatest
immediate challenges.
As in recent years, talent attraction, employee engagement
and talent retention are at the top of the list of HR and Talent
Management challenges with succession planning a close
fourth (figure 9 below). Each is likely related to the broader
challenges above, yet, it would appear that HR’s focus is still
predominantly short-term and somewhat tactical.
On a more positive note, respondents reported that HR is Figure Ten: HR Involvement in Decision-Making Before
significantly involved in the decision making process around Major Workforce Re-Alignments
workforce re-alignment events. Where mergers & acquisitions,
workforce reductions and outsourcing, for example, are
considered in organizations, HR is invited to the table “usually”
or “always,” 63% of the time (figure ten).
However, in ranking the proficiency of senior HR leaders
in change management, a vital ingredient in workforce
realignments, only 27% were rated expert (figure eleven).
In addition to ranking their top HR and talent management
challenges (figure eight) respondents also rated eighteen HR/
TM areas as to whether they represented key challenges over
the next three years.
The top three anticipated challenges were, in order: “Specific
Skills/Talent Shortages,” “Retaining Top Talent,” and “Shallow
Leadership Pools/Lack of Qualified Successors” (figures twelve
through fourteen). Figure Eleven: On Change Management, how would you
rate the senior HR team in your organization in terms of
proficiency and knowledge?

“Of real concern is

HR’s apparent lack of
readiness to meet their
top challenges over the
next three years”

Figure Twelve: Specific Skills/Talent Figure Thirteen: Retaining Top Talent: Figure Fourteen: Shallow Leadership
shortages: #1 Challenge in Next #2 Challenge in Next Three Years Pools and Lack of Qualified Successors:
three years #3 Challenge in Next Three Years
 “Failure to change
may threaten the very
existence of organizations,
forcing executives in
those companies to
remove responsibility
for human capital
management from HR.”

Equally telling are the respondents’ bottom three concerns. Figure thirteen: How prepared is your organization to
Of eighteen measures, the survey group ranked “Offshoring/ meet the challenges you agreed with or strongly agreed
Outsourcing” as the least worrisome by a wide margin. with above?
“Finding Talent and Leaders with Global Management Skills,”
and “Finding Flexible Work Arrangements and Policies
to Attract and Retain Older Workers” were the next least
important issues in order.
Consistent with their response to immediate challenges,
survey takers expect to prioritize talent acquisition, retention
and succession planning for the next three years while de-
emphasizing global workforce issues and specific measures
relative to the aging workforce.
When asked “What are the 3 most challenging types
of questions you receive from the C-Suite in relation to
talent?” the results were also consistent. Senior executives
appear to be most concerned with talent acquisition and
retention followed distantly by leadership identification and
development, workforce planning and succession planning.
Executives question HR the least around matters of corporate
social responsibility, corporate governance and payroll
management.
Of real concern is HR’s apparent lack of readiness to meet want competitive pay & benefits – this is a talent management
their top challenges over the next three years – despite science unto itself – but beyond compensation, they want their
these also being key present day challenges and those work to appeal to higher order influences, they want to be
most important to their senior leadership. According to inspired and challenged and they want to be led by competent,
respondents, less than one if five assess their organization as credible leaders that respect their autonomy while leading by
being well prepared or very well prepared to address these example.
challenges (figure thirteen).
It isn’t surprising that HR practitioners and leaders feel
HR’s top challenges – knowledge worker attraction & unprepared to deliver on these challenges – they are complex.
retention along with leadership succession will almost However, crunch time, if it hasn’t already arrived, is coming
certainly grow worse (as our survey takers predict). The global soon, and HR must prepare quickly.
market for competent, skilled workers is getting tighter; while
Although the term has been used for at least a decade,
at the same time, the developed world is shedding as much
perhaps the simplest way to describe what’s needed is
of the repetitive, “low-end” work it can. All the while, we
“HR Transformation.” In short, HR must be complemented
constantly raise the bar on what we consider “talent.”
by a strategic talent management capability if it is going to
As other surveys clearly demonstrate, talent attraction and overcome its challenges and rise in the organization. Failure
retention is not only about compensation. While salary, to change may threaten the very existence of organizations,
bonuses and benefits play a major and important role, the forcing executives in those companies to remove responsibility
workplace environment, relationships and the quality of for human capital management from HR and assign it to a more
leadership are even more important. Knowledge workers strategic capable part of the operation.
The View from the Outside:
HR is not its own Harshest Critic
Of the respondents to our survey, 117 were non-HR executives, managers and practitioners. By most
measures, HR’s colleagues from across the organization assess HR far more critically than does HR.

Over 70% of HR respondents

stated that their profession is either
respected or highly respected and
occasionally or frequently consulted
on corporate strategy.
Among non-HR respondents,
this number fell to just 36% and
one-third believe HR is viewed as
inconsequential, unimportant or not
even on the radar.

Across a range of eight questions

related to key business issues, HR
respondents rated HR leaders as
“experts” 25% of the time and as
novices 24% of the time. Non-HR
respondents assessed HR leaders
as novices in 43% of the areas
presented, and as experts only 15%
of the time. In both cases, HR leaders
were judged weakest in matters
pertaining to global business.

HR and non-HR respondents

are closer in their assessment of
organizations’ preparedness to
address their most pressing talent
management challenges. However,
non-HR respondents remain more
pessimistic. 25% say the organization
is unprepared or severely unprepared,
versus only 15% of HR respondents.
Part Three: HR Technology

The reasons in which HR fails in organizations are likely to include too little or too poor use of HR and talent management
technologies.
HR has long lagged in its adoption and use of technology. In recent years, the gap with the rest of the organization has begun to
close, however, as better tools have become available the advantages of using them more evident.
The Software as a Service (SaaS) model, available almost since the advent of the World Wide Web, has also made powerful talent
management and HR technologies more accessible by lowering costs and getting around the need to support, host and maintain
complex systems.
Survey respondents did not rank “Technical expertise (using HR/TM technology)” high among their greatest challenges now or over
the next three years. Nor did they believe it was a top immediate challenge (figure fourteen opposite). However, only 27% felt that HR
leadership had expert proficiency in TM/HR technology (figure fifteen).

“One of the reasons we’re Figure Fourteen: Is Understanding and Leveraging the
Changing TM/HR Technology Landscape a Top Challenge?
not there yet is we need the
right platforms for talent
management. The platform
must be integrated and I hope
the HR technology vendors
will solve that for us. We need
systems for acquisition, HRIS,
performance management, Figure Fifteen: HR Leadership Ranking in Knowledge and
learning, succession, and Proficiency of HR/TM Technology

measurement, and they need

to be integrated. I can tell
you there is no one integrated
platform despite all the talk
and promises.”
~ Amanda Hahn, Director HR, Aramark
Applicant Tracking, Performance Management and Learning Moreover, despite HR’s concerns around talent acquisition,
Systems are the top three TM/HR technologies currently respondents are taking little advantage of “Web 2.0”
deployed. They are followed closely by HR Self-Service. technologies such as social networking tools, blogs, wikis
It is interesting to note that over the next twelve months; or virtual worlds to gain an edge in attracting talent. The
Succession Planning and Performance management are, by a mainstream appears to be making the same mistake it did
wide margin, the most likely to be implemented. A significant twelve years ago in panning the Internet as a source to find
number also plan to deploy HR self service. The next largest talent.*
groups report that no new HR or TM technology will be Unfortunately, it does not appear that our respondents rated
introduced in the next 12 months. HR/TM technologies low as challenges because they’ve
It is encouraging that the vast majority of organizations mastered the field (figure fifteen previous page). Rather, HR, as
currently use multiple talent management technologies and are represented by the survey sample, ranks technology low as a
planning to implement more in the coming year. However, the priority in the face of its other pressing challenges. This short-
fact that strategic tools, like workforce planning technologies, term, reactive approach may be akin to patching the potholes
are low on both current and future lists is both surprising and rather than fixing the road.
disappointing because workforce planning is fundamental to
talent management and because it appears to be a top concern
*Almost every organization uses the Internet to recruit today but even a decade ago, only
of senior management. a small percentage of early adopters were experimenting with online job postings.

Executive Optimism?
About half of our survey takers were HR directors or above, they were
significantly more likely to report HR as “strategic” in the view of the C
suite. HR executives also reported a much greater emphasis on talent
management related activities versus those associated with traditional HR
(see appendix 1 for full results).

HR is More Focused on (%):

80

70

60

50

40 H R E xe cu tive s

30 O th e r

20
10
0

F ind ing & Reward ing

To p P erf o rm ers M eas uring Q uality o f
Hire, Training Retaining K ey
O utc o m es & P erf o rm ers A lig ning Talent
P ro d uc tiv ity M anag em ent with the W o rking with
B us ines s M anag em ent to s hare
Talent M anag em ent
Res p o ns ib ility
HR MBA’s
As of this semester, MBA students at Franklin University in Columbus, Ohio can
choose a concentration in Human Resources Management. Professor Gary Stroud
who helped design the program, describes the tremendous response from students
and regional employers as “shocking”. Stroud says the graduate-level courses focus
on talent management and strategy and are meant to prepare graduates for careers in
executive talent management.

His advice to HR executives? “The biggest complaint people have is that talent is
leaving. Managers have to be responsible for the people working for them – what are
their needs and how can I make that happen? How do you keep talent? You make sure
they have what they need and are rewarded appropriately. HR’s main responsibility
is to work with managers, coach them, consult with them, teach them how to reward
and recognize and how to manage talent so that people stay and are productive.”
Part Four: HR Transformations

Slowly but surely, leaders are coming Figure Sixteen: significant or innovative initiatives executed
in the last 12 months
to the realization that HR, no matter
how strategic, cannot develop a talent
management operation while burdened
with the day-to-day work of traditional HR.
At the same time, there cannot be talent management
without HR. Payroll, benefits, compliance, and the countless
daily transactions and records kept by HR are vital.
Organizations can maintain a full HR operation in house or
outsource it completely, but they must have HR managed
expertly in order to restructure around the new paradigm of
human capital management.
To assess the progress of HR in these regards, we asked
respondents a series of questions. When asked to describe
their most significant or innovative initiatives in HR or talent
management over the previous twelve months, the largest
On these fronts, our results are mixed. HR appears to focus
group pointed to initiatives related to leadership identification
energies on aligning talent management initiatives with key
and development. Talent acquisition related initiatives and
business objectives; about 65% reported an emphasis on this
those related to implementing an HR or TM technology
approach. Similarly, about 65% reported a focus on working
were second and third respectively. Initiatives related
with executives, managers and supervisors to transfer HR
to “HR Transformation (i.e. HR to Talent Management)”
knowledge and to share talent management responsibility.
ranked seventh overall of twenty-six options (figure sixteen
Respondents also ranked “Building an Integrated Talent
opposite).
Management Operation” relatively high in priorities over
HR transformation is built on three main pillars: Alignment the next three years. Paradoxically, “Creating Buy-In and
with the business, Talent Management Integration and Partnership for HR with Line Managers and Supervisors” and
the transfer of as much day-to-day talent management as “Creating Buy-In and Partnership for HR With the C Suite”
possible to line managers. were both middle of the pack priorities among respondents.
“I’m not interested in a maintenance job and wouldn’t
have joined if we didn’t have a serious commitment
to HR transformation. We had to do things more
efficiently to free up time for the value added pieces
and to be more involved with managers and employees
for coaching and partnership. We opted not to
outsource. Instead, we have invested in technology
and it has has given us a huge boost. We look to
see where we can automate, where we can deploy
transactional work to support staff. We also use some
employee and manager self-service. Some of the
changes we’ve made are minor but if you do enough,
they add up, and what you’re buying is time, the time
to add value in strategic ways.”
~ Freddie Jacobs, Vice President, OD, Mutual Trust Financial Group
Summary & Conclusions

Overall, based on results from this study, HR’s progress is not The Age of Talent is upon us, The HR
entirely discouraging. As above, despite ranking the proficiency
and knowledge of HR leaders fairly low against most measures profession remains the best suited to lead
of talent management and business acumen, HR itself appears their organizations through the associated
to be gaining respect and credibility in most organizations. It is
difficult to determine whether this is due to the efforts of HR or challenges and help them achieve competitive
more so to the attention “talent” and human capital has been
receiving over the past several years.
advantage through talent management. But
One thing is clear, the gap in awareness between talent time is running short. The HR profession must
management and HR, is narrowing, as is the time spent in move forward now in defining a new profession
each activity. Results from Lawler and Mohrman’s work in
2003 compared to the findings in Mercer’s 2006 report (both that can help organizations meet the challenges
referenced above) and this study, provide evidence of a of the 21st century.
significant shift in HR’s attention toward talent management.
Nevertheless, HR has a long way to go in preparing itself for
the human capital related challenges facing organizations. Most
respondents say that HR is “getting there” when it comes to
being prepared for the challenges of today and over the next
three years. However, the challenges are already here and
growing in urgency.
It is not enough for HR to focus only on putting out today’s
fires. Talent Management means planning strategically for
the future. For example, executives appear to understand the
need for careful workforce planning. Yet among the top HR/TM
initiatives respondents report for the past year, it barely breaks
the top ten (figure sixteen).
Respondents are involved in the decisions around major
workforce transitions (most of the time) but they seem
relatively unconcerned about their involvement in other parts
of the business that are growing in importance. Globalization,
outsourcing and offshoring, which are among the top concerns
of executives, are near the bottom of the HR agenda, as an
example.
While HR’s sluggish use of technology is picking up pace
(the adoption of web-based software for talent acquisition,
performance and learning in particular), HR remains risk averse.
Survey respondents were asked whether their HR organizations
are focused on “Risk-Taking” or “Risk Avoidance,” over 70%
chose the latter. This is evidenced also in HR’s avoidance of
Web 2.0 technologies. Newer methods, particularly in talent
acquisition, are largely ignored, despite the competitive
advantages possible for early adopters.
Finally, on the question of transformation, the results are
mixed. Efforts are underway, especially in distinct parts of
talent management such as retention, engagement and
talent attraction. Yet, when it comes to the hallmarks of HR
transformation, the components that make it sustainable and
“transformational,” such as talent management integration,
alignment with the business and the transference of talent
management responsibilities to line managers, progress is slow.
About Human Capital Institute
The Human Capital Institute is a global think tank, educator, and professional association defining
the agenda and setting the pace for the new business science of human capital management.
With over 52,000 members in over 40 countries, HCI offers a new association framework
that cuts across the silos of recruitment, HR/OD, finance, sales and marketing, operations,
manufacturing and IT. We provide key executives, line managers and human capital professionals
with the newest education, most effective tools and best practices in talent strategy, acquisition,
alignment, engagement, deployment, measurement, and retention.
Through research and collaboration, HCI programs collect original, creative ideas from a field
of the brightest thought leaders in talent management. Those ideas are then transformed into
measurable, real-world strategies that help its members attract and retain high-performing
people, build a diverse, inclusive workplace, and leverage individual and team performance
throughout the enterprise.
humancapitalinstitute.org

About the research Between July-August, 2007, The Human Capital Institute (HCI) and Vurv Technologies
surveyed 662 HR practitioners, managers and executives and 117 non-HR
practitioners, managers and executives from North America, Europe and Asia/Pacific
about their attitudes and experiences related to the role of HR in their organizations.
The typical respondent was an American (84%) HR executive (50.5%) from a large
organization of more than 20,000 employees (25%). Survey takers represented a wide
range of industries and were asked a total of 62 questions.
HCI’s Research Group conducted the survey and interviews (12) and wrote the paper.
HCI and Vurv Technologies thank the survey respondents and interviewees for their
time and insights.

Statistical Validity
The sample size of HR professionals achieved for this study provides a confidence
level of 95% and a confidence interval of +/- 4. This means that the answers provided
in this report are representative of the approximately 1,000,000 HR professionals in
North America, 95% of the time, +/- 4% points. In other words, if 65% of respondents
answered “Yes” to a question on our survey, there is a 95% chance that if all HR
professionals in North America were asked the same question, between 61%-69%
would answer “Yes”.
About Vurv
Since 2004, Vurv’s publicly traded customers have outperformed the DJIA and the S&P 500 stock
indices. We believe this is due, in part, to the fact that these organizations believe and invest in
their biggest asset, their people.
Vurv is a leading provider of on demand talent management software. Our talent management
offerings are delivered through a standard web browser utilizing “software-as-a-service”, without
time consuming and costly investments in IT infrastructure. As a result, companies of all sizes and
industries attract, hire and retain the very best talent.
Vurv.com

About the Author Allan Schweyer is executive director of the Human Capital Institute (HCI), editor of
Leadership Excellence: The Journal of Human Capital Management, and author of
the book Talent Management Systems (Wiley & Sons, 2004). He is an internationally
renowned analyst and speaker on the topic of transformational human capital
management for individuals, organizations, regions, and nations. Allan’s articles and
white papers a pear in dozens of popular media and industry-specific publications
worldwide.

Acknowledgements: Dr. Katherine Jones is a member of HCI’s Research Advisory Board and was principal
advisor to this research study. Dr. Jones is the Director of Marketing for NetSuite,
Inc., a Bay Area company that provides integrated ERP solutions as a hosted service
to middle market enterprises. She was a research director at Aberdeen Group in
Boston for eight years, focusing on research and consulting services in workforce
management ERP and mid-market companies. She has written widely on many
areas of talent management, technology and business practices. A veteran in
enterprise applications, Jones has been responsible for technical product marketing
and strategic alliance management in several computer companies since 1984. She
founded Independent Consulting Services in 1994 to provide marketing services to
high tech companies. Prior to a high technology career, Jones was a university dean,
involved in academic administration, research, and teaching. Jones is a frequent
speaker and is widely published in the U.S. and abroad. She has a master and
doctorate from Cornell University.
Appendix One: HR Focus
In my organization, HR is more focused on: (please choose the best response)

Ensuring that everyone is treated equitably and fairly 390 57%

Rewarding top performers significantly better than average and poor performers 291 43%
Total 681 100%

Measuring quality of hire, training outcomes, time to productivity 303 44%

Measuring time and cost per hire, number of training hours, head count 378 66%
Total 681 100%

Reducing turnover 225 33%

Retaining key performers 456 67%
Total 681 100%

Understanding HR best practices and benchmarking 262 38%

Aligning talent management initiatives with key business objectives 419 62%
Total 681 100%

Making sure payroll is accurate and on-time, keeping the business out of regulatory trouble 244 36%
Working with executives, managers and supervisors to transfer HR knowledge and share talent 437 64%
Management responsibilty
Total 681 100%

Building a competency model, reviewing talent and understanding the makeup of the workforce 412 60%
Building a better annual performance evaluation process 269 40%
Total 681 100%

Managing and helping underperformers 174 26%

Identifying and developing leaders 507 74%
Total 681 100%

New employee orientation 347 51%

Comprehensive onboarding 334 49%
Total 681 100%

Risk-taking 191 29%

Risk avoidance 490 71%
Total 681 100%

Cost-Cutting 286 42%

Leveraging talent for competitive advantage and career growth 395 58%
Total 681 100%
Appendix Two: HR Leadership
Appendix Three:
HR Involvement in Global Business & Talent Management

31. To what extent is your HR team involved in the following

global business issues for your organization? 34. 5. HR leaders visit foreign countries to develop global
awareness, assess talent pools, etc.
1. Sourcing and hiring talent in a variety of foreign countries.

Not at all 215 35% Not at all 257 42%

Occasionally 169 27% Occasionally 171 27%
Regularly 143 23% Regularly 97 16%
N/A 91 15% N/A 93 15%
Total 618 100% Total 618 100%

35. 6. HR develops methods and strategies to build virtual

global teams and help managers who supervise a globally
32. 2. HR is involved in preparing individuals for foreign
disparate and remote workforce.
assignments and repatriation.

Not at all 256 41%

Not at all 211 34%
Occasionally 167 26%
Occasionally 170 27%
Regularly 88 15%
Regularly 142 23%
N/A 106 18%
N/A 95 16%
Total 618 100%
Total 618 100%

33. 3. HR gets involved in cross-border mergers &

acquisitions, from planning through change management and
workforce integration.

Not at all 232 37%

Occasionally 143 23%
Regularly 135 21%
N/A 108 19%
Total 618 100%
36. 7. HR chooses and helps implement global Talent 38. 9. HR assesses and manages competencies for the
Management/HR processes and practices. workforce globally.

Not at all 199 35% Not at all 219 35%

Occasionally 156 29% Occasionally 171 28%
Regularly 183 21% Regularly 142 23%
N/A 80 15% N/A 86 14%
Total 618 100% Total 618 100%

37. 8. HR chooses and helps implement global Talent 39. 10. HR manages a centralized global workforce and
Management/HR technologies. succession plan.

Not at all 209 34% Not at all 266 43%

Occasionally 164 26% Occasionally 134 22%
Regularly 155 25% Regularly 128 21%
N/A 90 15% N/A 90 14%
Total 618 100% Total 618 100%
www.vurv.com