Because of the many changes to the world we live in, the very nature of the employer-employee relationship has changed.
Ever since companies have been employing people, the company has had the upper hand in the relationship. For the most part, the company dictated the terms of the relationship. That reality has now flipped. Labor shortages exist. The Great Resignation is here. Service companies are closing because they can’t staff the business. Today’s workforce has different expectations about the experience they desire. Companies that are still living in the old reality are losing people and are having difficulty replacing them. They become employers of last resort, or worse, unsustainable.
Most Boards of Directors lack strategic-minded Human Resources Executives in their ranks that have a deeper understanding of the today’s challenges. Strategic Human Resources Executives bring three skill sets that BODs need in this new business environment.
- Talent Management. This includes the entire employment cycle from recruiting, onboarding, compensation, and development. Companies that fall behind in this fast-changing element of the business will simply not be competitive in the search for talent.
- Leadership Development. Many companies have managers that are equipped to manage as if it were 2008. It isn’t. Upskilling managers at all levels will be essential to retaining and developing talent to they want to be part of the company. Recent studies from Gallup, Udemy and Predictive Index all indicate that the number one reason people quit their job is their manager. That has been true for decades, but now it is happening much faster.
- Culture as a strategy. A healthy workplace culture has always been an advantage in the competition for talent. Now it is a requirement. In 2017, The National Association of Corporate Directors (NACD) Blue Ribbon Commission Report stated that culture can no longer be considered as a soft issue by management and boards. Its strength or weakness has a lasting impact on organizational performance and reputation. The oversight of culture must be a key board responsibility, as it is inextricably linked with strategy, CEO selection, and risk oversight. It can be easily argued that the position of the NACB is truer today than in 2017.
While Boards of Directors do not implement policy, it is their responsibility to provide oversight, evaluate risk and look out for the interests of the shareholders. A savvy Human Resources Executive will be able to ask the right questions about people issues that now should be considered part of the “risk” discussion.
Mark Hinderliter, PhD, CPC is a former Human Resources Executive for a billion-dollar global enterprise. Currently, he owns a Veteran-Owned Business that helps companies develop leaders and workplace cultures to provide a competitive advantage in the quest for talent.