When did talent management take over HR?

We have been doing some research recently into the HR structures of some of our newer, more technologically savvy businesses and it appears that a subtle but significant change in HR might be taking place. In the past, the senior HR person in any organisation was probably the Group Head or SVP of HR or something similar but we are now seeing the rise of a Head of Talent Management instead. What might be going on?  Is this a permanent change, and what does it mean for the HR profession?

HR has historically been the catch-all term for any activity concerned with the people issues in an organisation, but in reality, HR departments have always been a collection of other activities with the emphasis between them differing from company to company, according to the nature and purpose of the business.

The demand for this broad range of activities within one HR function has diminished as business leaders continue to insist on more for less, and technology can provide a wide range of alternative solutions. Many parts of the HR function have come under increasing pressure to change the way they operate and often that means outsourcing.

If you examine each constituent function of the traditional HR department there is a clear case to be made for outsourcing almost all of them. Many of the administrative functions such as payroll have already disappeared from larger businesses and it is inevitable that other functions will follow. Better trained managers, an excellent shared service centre, policies and procedures on-line and access to external specialists when required is increasingly the structure of the contemporary HR function. We know of one large multinational that has no HRBPs on any site across the world as all such issues are now dealt with by one centralised centre in South East Asia.

Logically, if so many functions within HR can be outsourced then that leaves a very small department for the Head of HR to lead and manage. Many newer businesses have already come to that conclusion and have outsourced everything they can but most have retained one function that seems increasingly important – talent management.

As an amalgamation of resourcing, recruitment, L&D, manpower planning, succession planning, high potential programmes and a few other related activities, talent management is key to the successful growth of many new businesses and increasingly, some of the traditional ones as well. The CEO of a social media firm for example, is happy for all the traditional HR stuff to be dealt with by others for a fee, but he wants to make sure that the person responsible for attracting and retaining the people who will make a difference to his business is a key member of his management team.

Interestingly many of the activities managed by the talent team, particularly resourcing and recruitment, may well be outsourced and will be in the hands of trusted partners who work with the talent team as part of a joined up approach. These external third parties may operate on or off-site but will present themselves to the market as part of the client firm.

We have always known that people make a key difference between successful and failing companies but many HR professionals have forgotten that and become side-tracked into regulation and compliance. Many new businesses of the 21st century have gone back to basics and really do believe that it is their people that make the difference and back that up by putting talent at the centre of HR. Perhaps finding and developing the best people for an organisation is now the one area of HR where true creativity can flourish. It goes towards explaining why so many organisations now put the Head of Talent Management at the top of the HR tree.