The Talent function: Three signs we’re entering a Golden Age
When I started out my career in ‘Talent and People’ (pre-function rebrand, Recruitment and HR) it was seen as a bemusing move. My peers were ready and eager to climb typical Oxbridge career ladders — bankers, consultants, doctors, lawyers, curators and other paths which carried the most perceived prestige. Breaking into one of these professions was hard and competitive, illustrated by the tough interview processes. HR was not one of these — there was no gruelling selection process to work as a people practitioner, no prestigious grad schemes, and no obvious badge to strive for. When I told others my choice was actually intentional, people smiled politely and some gave an unconvincing “oh…interesting”. Hardly phased, I was too curious about the art of understanding people and the application of their talent.
For a long time the HR and recruitment function has struggled to attract the best and brightest talent. Historically the barrier to enter has been low and the demand for acquiring and managing personnel has been high. As a result, there has not really been a ‘bar’ for the talent entering. The profession is still fighting a lot of stigma which paints it as one lacking strategic capability and integrity. It’s likely that even the top 5% of practitioners and thought leaders in the space will tell you that they arrived here in a non-linear fashion. I’ve met some extraordinary minds who almost always said they “fell into” a career in People and Talent – as if it was a net which caught their fall from what they originally aspired to do. When was the last time you heard someone say they “fell into” software engineering or investment banking? People love to cite the overused and outdated ‘war for talent’ idiom when talking about hiring and retaining the best — but for me, the real war for talent has been happening for a long time within this very function.
That said, we’ve been on the cusp of some exciting change for some time and right now feels like the inflection point. Specifically, there are three linked trends which make me bullish: The HR and recruitment function is not only experiencing a paradigm shift, but also a technological and a talent revolution at the same time.
Talent/People is now recognised as a strategic function
In the last decade there has been growing recognition that talent — i.e. your people — is directly linked to organisational success — i.e. your bottom line. In-house teams to help you find and manage talent are no longer experimental or innovative — the ROI is pretty well understood. We’re seeing more companies push for long-term thinking when it comes to the acquisition and retention of talent. What was once a purely transactional activity is increasingly shifting to being more relationship-driven. People operations is coming out from the back office and being invited to take a seat at the executive table.
This idea is most at pace within the tech industry, where attracting and keeping the best people is increasingly fierce play. Tech founders and executives have no option but to think proactively and strategically about how you speak to, win and keep the best talent on the market. The defensibility moats of startups and scale-ups no longer just include technology and product, it includes their team and their unfair advantage to acquire world-class people. More and more investors are realising that you’re betting on the quality of the team first, idea and market second.
This is mirrored in a trend across private investment, whereby human capital is seen somewhat as a ‘next frontier’ of value creation, previously an untapped source. In venture capital we’re seeing the rise of internal Talent roles (which have been more common in the US than Europe) — a form of operational support dedicated to creating value in a portfolio. In the most forward-thinking funds the Talent Partner is a strategic peer to investment teams vs. being a back office activity. The ability to attract and keep top talent will make or break a VC’s best portfolio company and we’re now talking about this explicitly. It’s not surprising then that we’re seeing this thinking feed through to portfolio investments — increasingly startups are listing a Head of Talent / People as a key hire earlier on.
This shift isn’t limited to the tech industry, even if it is where the idea has most momentum. Large established incumbents have no choice but to accept a core part of ‘digital transformation’ means rethinking their approach to talent. For the first time ever in many companies, executives are having to move beyond the ‘people are our greatest asset’ rhetoric and act - which means enterprise dollar-spend on talent management solutions is soaring. It’s a great time to be offering a service or building a product in this space, which leads on to the next trend.
Better technology and tools exist
Over the past few years we’ve seen a number of software products hit the market which seek to automate the bottom 50% of work for people practitioners. Online talent marketplaces are now commonplace, meaning you don’t need to step a foot outside your office to connect with prospective candidates. LinkedIn, Hired, Indeed amongst hundreds of other newcomers, like Blendoor and talent.io, have built platforms to connect jobseekers (active or passive) with opportunities. Many of these claim to use proprietary matching algorithms to enhance relevance, bringing the right talent to the right role and therefore making recruitment more efficient.
Better applicant tracking systems (ATS) automate the dreaded resume print-and-sift task which haunted my early career — now it takes minutes not days to build candidate shortlists and schedule interviews. One step further and we’re seeing advanced ATS tools, such as Applied, help us hire fairer and mitigate our unconscious biases. Perhaps one of the most exciting new developments is in seeing Talent CRMs like Beamery emerge (where the ‘C’ stands for Candidates) so that we can catch up on the near three-decade head start our peers in strategic sales and marketing have had.
And this isn’t just limited to recruiting — we also have better products on the market to help manage talent and build proactive retention strategies. Onboarding is being recognised as a critical part of the employee lifecycle to get right (and thanks to products like Personably it no longer has to be a headache/afterthought). New employee analytics tools like Peakon now allow us to collect previously unseen data to quantify engagement, so that we can spend less time in the dark and more time doubling down on building happy, high-performing teams. Self-service HRIS platforms like CharlieHR and Bob are drastically cutting out the hours required to managing your workforce and helps put some of the onus on your team.
Technology is freeing up more time for people practitioners to spend on the valuable and human bits of the job. It also grants more time to focus on the harder, more intellectual problems associated with understanding talent. We now have more headspace to do things like scrutinise the very broken prevailing assessment methods; or think about how to evolve as agents as the rules of work are rewritten. Personally it means I have more time to investigate the science of building talent networks and the art of discovering underpriced talent — things I didn’t imagine I’d be doing when I first started out as a HR intern.
Better talent with more wholesome incentives
One consequence of increased time and attention shifted to the harder talent questions is an uplift in the types of talent attracted to the space. Not only are more strategic and ambitious types choosing to build careers as people practitioners, but we’re also seeing experienced talent from other industries turn their minds this way. In the last couple of years we’ve seen a diversity of backgrounds — executives, scientists, academics, engineers — enter this space by choice, with no priors or preconceived notions about HR.
Startups seem to be an increasingly popular entry point, with a new talent platform or people analytics company seemingly being born every week. I have seen this growing interest first hand working with highly skilled founders at both Entrepreneur First and EQT Ventures, several of whom are applying their knowledge of cutting-edge technology to build advanced people products. Across the pond in the US there are even more examples of intimidatingly clever teams behind companies like Jopwell, Handshake and Humu. These people are here because they want to make the experience for candidates, employees and people practitioners better over the long-term, not just for a quick sale.
Academia is another entry point. There’s growing academic interest and literature centred on the topic of understanding talent at both a conceptual and practical level (how and why people perform). Great reads which have emerged over the last decade from psychologists are helping practitioners debunk the common myths and misunderstandings about humans and their talents (The Talent Delusion, An Everyone Culture, Originals, and Outliers are favourites of mine). Interest in People Analytics as a research field has also been growing over the last couple of years, though the idea of using data to understand behaviour and performance in the workplace is not new in itself.
Does this mean gone are the days of reactive transactional recruiters and HR teams? Unlikely — but what it does mean is that the landscape will start to balance with people who have a different set of incentives — more missionaries and less mercenaries perhaps. We’ll start to see more sophisticated actors in the space who value and share intellectual curiosity about people, their talents and the changing definitions of career and work. In her latest book, Powerful, Patty McCord makes a spot-on comparison — prevailing approaches to hiring and managing talent today is to the pre-lean, agile and customer-centric era of product development. There are tonnes of un-cracked people problems and fascinating macro talent trends to sink teeth into right now, which I believe will only continue to attract bright minds.
An evolving mindset and new entrants — both technology and people — signal only more great things to come in this space, and my prediction is that the next decade will be somewhat of a golden age for this function. Soon building a career as a people practitioner will become one of choice and desirability for the highly talented. I couldn’t think of a more interesting time to be here.
ABOUT THE AUTHOR
Zoe Jervier is the Operating Partner at EQT Ventures. She works with founders of venture-backed companies to build world-class teams. Most often this means helping them to build strategy and process which allow them to discover, attract, and develop the best talent on the market. She built the Talent attraction and assessment function from scratch at Entrepreneur First and was responsible for EF's global Talent strategy.