Ask the Expert  By Andrew Goodman

Question:
I am planning to retire before the end of the year and I am currently working with my CEO on a search for my replacement. Are there any trends that you are noticing in the field that are helping to reshape the new HR executive and do you feel that a search is best handled internally or by working with a specialized search firm? I am concerned the cost of working with a firm outweighs the benefits.

Answer:
First, let’s talk about the role of today’s HR executive. Gone, as you know are the days of the HR department functioning in a largely administrative capacity. Today’s economy has changed that forever. Human Resources is quickly becoming the most vital function in most organizations. The executive position is now a battle General in the “war for great talent”. Winning this war and thus securing the best talent is paramount to long term corporate success. The HR seat has taken on an even greater strategic role. Boards of Directors, CEOs, and shareholders recognize that the role of the HR executive has been elevated to even greater importance in today’s market. They are increasingly aware that the wrong person in charge of talent can have disastrous consequences. Business dynamics are also changing rapidly in today’s market. We are in a knowledge based business climate with extraordinary pressures to maintain costs and drive profits. In fact, most corporate balance sheet’s labor line is the greatest expense and therefore constantly scrutinized. Companies will not be able to compete effectively without a savvy manager overseeing this overall expense.

The key challenge for any corporate growth model is how to successfully incorporate talent management into the strategic plan. This fact has positioned HR now at the intersection of strategy and execution. A company’s main engines remain a talented, motivated and prepared workforce. The executive skill to ensure this critical asset is available, ready to perform and profitable is more critical and complex than ever before. It’s not only the ability to execute the talent management paradigm; HR executives also face tough decisions around staff redundancy and costs. All of this puts pressure on organizational design, leadership development, succession planning and change management. The HR department is no longer benefits and payroll! The most complicated asset, the most expensive asset and now the scarcest commodity must be effectively controlled by the HR executive.

If that’s not enough, many CEOs today are also looking to their HR executive as their ‘Chief-of-Staff’ with competencies to match. The classic HR function, which was largely administrative and employee relations centered no longer exists. The HR executive is now a critical strategic partner to the CEO needing strong communication skills, emotional intelligence and a keen business insight. It is not enough though to have great soft skills; HR executives who add long term value are metric driven as well. They fully understand the data that will help make critical human capital decisions. This is business at its most fundamental and complex. On one hand HR executives must guide the CEO and management team around metric-based decisions; on the other they are the corporation’s chief psychologist. Often it is the HR executive who is the principle coach and advisor lending insight on the intangible factors weighing in on many vital decisions.

Given the facts outlined above, securing the most effective Human Resources executive for your organization might be the most important succession plan decision you will make. If you do not have a ready-now successor then I would strongly advise you utilize a search firm who particularly specializes in HR executives. The insight and advice will be extremely valuable and the cost of not succeeding with this hire will far outweigh the expense. As you go through your selection process be aware of the principle search professional who will be partnering with you. Their ability to learn about your organization and connect with your principle stakeholders is largely the key to success. It is not enough to be experienced and the size of the search firm quite frankly is irrelevant. The factors to consider are the recruiter’s ability and desire to truly learn about your particular situation and capability to execute. Pay attention to their passion for their job and to the depth of their understanding of HR factors outlined above. This is not a position that should be left to chance. Whether you choose a large, well recognized search firm or a more local boutique, develop a partnership with the recruiter and participate in the process. Good Luck and I hope you enjoy your retirement!

Andrew Goodman is an Executive Vice President with Linkage and runs Linkage Strategic Resources, the executive search arm of Linkage, Inc. He has over 20 years of varied experience in executive search specializing in Human Resources, Finance, Legal and executive level assignments.

This issue of Link&Learn was published in April 2007, by Linkage, Inc. (http://www.linkageinc.com). Please direct copyright and additional questions and comments to editor@linkageinc.com