Author: Volker Schrank

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New HR: The role of the works council 3/3

Today I would like to close my plea for the works council. I do hope that my last two posts did start you thinking about the works council and how a new approach might change the interaction into collaboration – and maybe even some works council members have read my posts, too.
I would like to close with the two statements of:

  • Align with the necessities of the speedy economy
  • Act as co-owner

 
Align with the necessities of the speedy economy
Probably some of us do not like the above statement – speedy economy. Sometimes I don’t like it myself. But it is a fact. The speed of business transactions, turnaround times, trends, etc. has increased in the recent years – and it will increase further. I don’t want to discuss at this point if this is good or bad or nothing – it is a fact and each company has to play in this new, faster-paced environment. This means being fast itself or fail. Of course, fast decisions are not always the better ones and it is sometimes even better to think about it a few days more, but this is not always possible. The 2nd place is the first loser.
Some important decisions have to be co-decided with the works council and the works council should match the necessary speed. Not blindly and not in all instances, but if a decision needs to be reached fast, the works council needs to be able to find a decision – fast. In order to do this, the structures and meeting schedules of works councils need to adjust and be more flexible.
However, as I said, not in any instance, a fast decision is necessary, so my plea is still for the works council to question every decision and ensure that it is the right one. For this, not less speed is necessary, but closeness to the business and the markets. This brings me to my next point.
 
Act as Co-owner
The topic of co-ownership of employees is an old one and was utilized for many discussion already. I would like to utilize it non-ideologic, but reality based. The responsibility of the works council should never be underestimated. Each decision a works council makes or postpones or does not make influences the abilities of a company to be competitive and successful. This weight, this responsibility should be carried and understood by each works council member. In fact, for example the german BetrVG §80 says the the works council should support any measures that ensure or extend employment in a company. Now, this responsibility is a bigger one than „just“ supporting and representing employee needs or wishes. It is the responsibility to see the bigger picture, to understand the broader business situation, markets, company status and also decide against single employees or employee groups in the interest of the bigger company success and future. This is not something that a works council should only ask from the management, but this is a works council responsibility as well. I am calling this co-ownership. The works council is the co-owner the yang to the yin.
And with this, I am closing my plea for a modern works council, a competitive advantage in today’s economy.

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New HR: The role of the works council 2/3

Well, after a longer break over Christmas and New Years, I would like to take up again the topic of a modern works council. In my last post I have already laid out the reason why I think this is important as well as positioned where I see the necessity of and for a modern works council:

  • Focus on the future of employees, not the past
  • Being inclusive in a multi-generational workforce
  • Promote the advantages of the digital age
  • Align with the necessities of the speedy economy
  • Act as co-owner

I have talked about focussing on the future of employees, not the present. Today I would like to provide my view on the other statements.
Being inclusive in a multi-generational workforce
This is a big one. For years consultancies and also research is talking about the multi-generational workforce. It is a fact that very different generations with sometimes even opposing views, values, or expectations have to cooperate in today’s companies. HR as a function is trying to deal with it already – but they have just started. Leaders are struggling hard with that and employees of the different generations are getting frustrated.
What is missing in my last paragraph? – right, the works council! The above mentioned parties are at least realizing the fact of the multi-generational workforce and are trying to do something to solve the arising issues. I have not seen many works councils that are doing the same – or that have actually realized this fact. And just one current trend that works councils try to enforce in Germany illustrates this: Shutdown of email servers on the weekend and after regular working hours. The idea behind this is noble: supporting the employees to have a real work-life-balance. But the question that needs to be asked is: Who wants to have such a regulated work-life-balance? Or better, does everyone want such a regulated work-life-balance? – And the answer is no! Especially the latest generations have a different concept of work-life-balance. A self regulated concept. They want to decide on their own when and where they work as well as how they get the work done (within deadlines). But also parents for example need to have a self regulated work-life-balance in order to enable them to have a normal job. Working hours for these groups might look very different from the 9-5 hours that are used as basis for the email-server-shutdown ideas.
This is just one point where the different generations have even opposing views and the works council only sees one view/ opinion. The general field of multi-generation integration is way open for works councils to act on and to help the multi-generational workforce to play together. But this is not easy as the second step (after realizing that this conflict exists) to play on this field is to understand it. And in order to do so, the works council itself should (and need to be) multi-generational. And by multi-generational I mean official, full members of different generations – not the youth/ apprentice representation blanket. This is where it needs to start. This is what it means to be „inclusive“.
 
Promote the advantages of the digital age
The next aspect is not too far off from the one I have discussed above. The digital age offers a million different options to do things different (and yes, even sometimes better) than before. This means risks, but also advantages. The works council should actively promote and utilize these new options for its own work as well as for all its employees it is representing. I don’t mean blind adoption, but serious discussion and utilization. This is especially necessary as legal regulations are not yet adapted, still focus on the IT abilities of the last century. Works councils could just hide behind these regulations or they could step up and utilize (with full respect to data privacy) the new possibilities to form current regulation.
A concrete topic are workforce analytics. With the help of today’s Human Capital Management (HCM) solutions as well as the power of analytics the insights into a companies workforce are multiple – and these insights could be used to promote the importance of specific qualifications, trainings, flexibility arrangements, etc. – but of course they could also be used against single employees. And this is what I have seen as a major works council’s argument against analytics. But analytics by itself are not bad. What is done with them is key. So I plea for a utilization of the advantages of the digital age, but have an eye on how they are used.
That’s it for today and in my next post I will conclude my plea with the remaining two statements.

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New HR: The role of the works council 1/3

Works council. This word is one of the less favorites of HR colleagues. Still or actually because of that I am writing this post about the works council.
In my last post I have talked about why HR should cooperate with the works council and how this could look like. Today I would like to write a plea for a modern works council.
Works councils in many european countries have a very special and important Job: They are the direct representation of all employees and have codetermination rights for many management decisions if employee interests are involved. That makes the works council very powerful. However, very often I have not seen a works council that used this power in a way that really promotes employees as well as the business success as a whole. – and these are the major two factors for all works council work.
Of course, most (if not all) HR colleagues will agree with me on this assessment and most (if not all) works council members will disagree with my assessment. Well, let’s be open and honest here: I have not performed an empirical study here, this is based on my personal experience. But more important – it doesn’t matter. I do not want to discuss the past or nurture this conflict in any way. I would like to make a plea for a modern, forward thinking, integrative works council.
Based on the two main objectives of the works council (represent all employees and work towards the best for the company), I envision a works council that exactly focusses on that. How does that look like?

  • Focus on the future of employees, not the past
  • Being inclusive in a multi-generational workforce
  • Promote the advantages of the digital age
  • Align with the necessities of the speedy economy
  • Act as co-owner

For me, these are the major opportunities for works councils to show their readiness for a modern, new way of executing their important objectives! – Many HR colleagues are probable thinking why I am actually focussing on finding reasons for the works council and am not pleading against it. Well, even today I strongly believe that every employee as well as every company is better off with a modern works council than without any! Why? – because you always need two sides to be successful. Yin and Yang is a very old concept – often cited, and often showed to be successful. The same applies to management and works council. Both are at the first view opposites and contrary, but in fact interconnected and complimentary. It is supposed to be two different views towards the same goal: business performance.
Focus on the future of employees, not the past
This is the first principle to support the two objectives. Works council should represent the needs and views from employees, should be their voice towards the management. This is 100% correct and should still be the case tomorrow. But, the understanding of the “needs of the employees” is what should be examined in more detail.
In the past, this often meant defending the status quo. But this is the easiest way of representing your employees – just repeat what they say and want: No one wants change, no one really believes in the chances of change.
In my view, a works council needs to be more and can be more. The mandate is to represent employees – not to keep the status quo. And what is the number one goal of each and every employee? Keep employment with good pay and human working conditions.
In the world we are living today (and you can either like it or not – but that does not change the fact), the only chance to achieve this is constant change, renewal and innovation. This more often than not comes with big changes for many employees.
A works council’s task is to not only understand this, but to actively support this journey with ideas as well as promotion of this towards all employees. This is a tough job – much tougher than just supporting employees in their change resistance. But the good thing is than tmore often than not, this secures employment.
In my next post I will lay out me plea for the remaining four topics and the importantce of the works council. I assume that already this one in conjunction with my general plea for the works council will provoke some discussions.

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New HR: Understanding HR's customers – works council

This is the final part of the HR’s customers analysis. Last but not least the works council/ unions in general.
Ulrich himself has in his basic model not really touched this customer. His model does not actively cater for works council/ unions. This is understandable as he is US based and most of his research which he used as basis for his model is in non unionized environments. However, in many countries (ok, mostly in Europe) HR work is impossible without active involvement of the works council. In many countries HR measures can actually not get implemented without consultation or even acceptance of the works council or union. This power makes works councils/ unions a big player and big customer for HR.
This does, however, not mean that HR in these countries is treating the works council as a customer. In many companies that I have seen, the works council is seen as political opponent or worse, as enemy. Ok, this is not only because of the HR department, but often due to the general company politics and the works council/ union which thinks that its only reason for existence is to oppose anything that they can – and calling it “defending employee interests…”.
The topic of works councils/ unions is a very interesting one – from both sides. The history of unions and works councils is long and has a big tradition – however, I recommend they change their view of the world and their reason for existence or they will go down (as you can already see in Germany where unionization is decreasing) or bring down the company they work against (not for). But this is a topic I will touch in a separate blog.
Today I would like to emphasize on the importance of works council inclusion in day-to-day HR work. As I have laid out above, works councils/ unions are very powerful in some countries/ industries and the HR department actually has to work “with them”. However, even if this is not the case HR should consider involving them in the HR work for various reasons: May it because of the closeness of works councils/ unions to the employees and therefore a) help in better understanding the actual needs of employees but also b) help in promoting HR measures through an additional channel. Or may it to utilize them as additional input and support in designing and implementing new initiatives to ease the official review and sign off of such initiatives.
It might not often seem that way, but I believe that works councils/ unions actually do have important and valuable input for HR, its processes and initiatives. HR just needs to tap into this territory and utilize it – and this not only “as required”, but proactive and inclusive.
Assessment of HR’s current state, gap assessments, HR strategy formulation should always include a 360 degree feedback and input – so far I have only seen HR, the business and the top management being involved. Why not the works council/ union?
Of course I know that this seems almost crazy given the current state of cooperation between HR and the union/ works council, but someone needs to take the first step – and there is nothing to loose.
After this first step from HR, the works council/ union of course has to take the second step, which is also a big change from today for most of the companies that I have seen. This requires a very different view and understanding of “reason for existence”. I will talk about this more in my next post.
But just think about the potential – a new source of input, a new cooperation partner, less fighting and tactical manoeuvring.

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New HR: Understanding HR's customers – Employees (part 2)

Future and past employees… this is how I finished my last blog post about employees as customers and this is how I want to start part 2.
So far HR has only (and if at all) been taking care of current employees (except some pension payments to retirees). And with this task, HR was fully booked. And back when Ulrich has designed his model this was sufficient. But the Talent landscape has changed.
Today, Talent has a different view on work and career than just a few years back. Career is no longer defined as “within a company” or even “moving up the ladder”. Career means many different things to today’s employees. Talent moves in and out of companies how they feel – and they can do that as they turned out to be a scarce resource.
Companies and HR departments that I have seen are not prepared for that. As soon as an employee leaves the company, it is off the radar. This is a luxury no longer acceptable. NEW HR has to have an internal and external Talent map and succession planning.
Some companies already today have something like an external Talent pool. This is absolutely fantastic and necessary, but often this Talent pool is not properly structured or managed. What is necessary is an integrated view on Talent – as well as management of Talent. The Talent function should have a clear understanding of the Talent within the company as well as externally – may it be Talent, which was approached for an open position or has applied for a job – but likewise Talent that has decided to leave the company.
Employees leaving a company do no longer do this for good. They just do that to follow a different career path at this point in time, because they feel a need to do something different. And guess what? – through doing this, they normally become even more valuable because they acquire new skills.
In today’s world, once this Talent is out of the company door it is lost. This is unacceptable tomorrow! A Talent function should keep in contact with this Talent, follow his/ her career moves and make sure that he/ she knows that the company is still interested and is supporting this out of company experience. – and at some point this should lead to Talent returning to fill open positions – best through integrating this Talent into the Talent pipeline.
Of course, this is nothing easy to do and requires a big change of focus and definition of Talent. But this will be more and more important, the more Talent becomes scarce. Individual Managers are already doing this and keep an eye on good Talent that leaves their company. – this is a fantastic first step, but needs to be more structured and scalable.
Today’s HR department structures are more often than not, not ready for this. NEW HR is stepping into this with a specific Talent set-up. But before going into this topic, let’s finish the assessment of HR’s customers in the next post with the final customer of HR: unions/ works council.
Until then all the best.

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New HR: Understanding HR's customers – Employees (part 1)

Well, it has been some time since my last post. Sorry about that. But I also used the time to further reflect on the fourth customer: the employee.

When Dave Ulrich was designing his model, the employees, their values and expectations were very different from today. Many things have changed:

  • The new Generations are very different than the one’s back when Ulrich wrote his piece
  • The expectations from employees but also from employers to their employees have changed
  • The talent landscape has changed dramatically – from a “buyer” to a “seller” market

I believe that employees are one of the customers that HR professionals are not surprised to see here. But before going into the details, let me pause and raise a different question: Is the employee really a customer of HR? – it seems odd to ask this question, but with my recent post about real Talent Management I have already touched this topic. I honestly believe that the people manager is the first point to go to for each and every employee. That is why it is called people manager. This is what leadership is about – but (and this is an important but) HR has to a) enable these managers and b) there are still a few other tasks that stay with HR and the Talent Function.

From my perspective employees have three general needs when working for and in a company:
a) They want to get paid
b) They want to have a great job and enjoy work
c) They want to get developed and succeed

So, for a) clearly the HR Admin function is responsible. This is a commodity and should be handled through self-services and a pure admin function.
b) is more complex. There is clearly a combination of people manager and HR necessary. The people manager is responsible for the day-to-day job and experience, but HR should have a look at the overall working environment with policies (yes, although this topic is “out” it still is necessary – in some countries and industries more than in others…), workplace design, organization design, etc.
c) is again a mixture of people manager and HR. The day-to-day development again should come through the people manager. But the strategic, cross-functional development needs to be not only enabled, but executed through HR. HR are the only ones that really understand the complete Talent landscape of the firm and can “follow” Talent inside and outside the company, but also blueprint potential career paths through the firm as development, experience and succession paths. The people manager of course should have this in mind as well, but is generally not in a position to grow Talent cross-functional or even across a current functional deployment.

Back in the days when Ulrich started his model, most of above mentioned (except the payment topic) were “nice-to-haves”. Today they are MUST HAVES – and if you cannot deliver on those, Talent will make its decision to leave. And this is what you don’t want in a market of scarce talent… – or at least you want to make sure that Talent comes back as well. And to enable this in a proper way, today’s HR function is not prepared. I haven’t seen many HR functions that really play well in the talent space. There are some that have a great start, but an integrated concept strategy and structure is so far missing and NEW HR has to step into this.

But, this is only part one of employees – there is a part two which is often not reflected in HR: future and past employees. I will further elaborate on this topic in my next post.

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New HR: Understanding HR's customers – External customers

In my recent posts I have already covered Management as well as Shareholder as HR’s clients. Today I would like to talk about external customers of the company as HR’s clients. Again, one is probably asking “Why are external customers client’s of HR?” – well, probably all of us agree that those customers do not receive any direct HR services. They are not paid (payroll), they are not part of any works council negotiations nor are they part of any succession planning. But still, HR should pay close attention to customers. So, why is that?!

Well, a company can only be successful when its customer’s needs are met. These needs are met through a combination of a companies non-people (machines, for example) and people resources (skills, ideas, services, etc.). Depending on the product/ service a company is offering, people resources have a higher or lower influence on quality. For example in pure service companies, people resources are the only impact on quality of service. Having said that, who has the most possibilities to shape, motivate, train the people resources? – HR has! Of course that does not mean that HR is the one being responsible for the employees. This still stays with the leadership/ management. But all non administrative HR processes are designed to influence the performance of employees in certain ways. – best in ways that enable employees to better serve customer needs.

And in order to enable HR to do that, HR needs to understand what customers are looking for when they receive a service or a product from the company. Only if HR understands this, HR is able to shape HR tools and processes in a way that influence employees to better serve the customer. And this is where external customers are (indirect) clients of HR.

In my consulting career I have not seen many HR professionals that understand what customers expect from their employer/ company. Today’s HR is (although these thoughts are not new, but hovering through Human Resources since 1995 at least) still only inward focused. In the best case HR understand the products of a company, understand how the business runs. But I haven’t seen any HR department that has asked marketing or sales for a presentation to better understand the companies’ customers. This is something HR really needs to work on. And it is that easy – start in your own company, approach marketing or sales. These colleagues know what customers expect from your company/ employer. Additionally, just do some research on your own – go out to the point of sale and understand why customers are buying your companies’ product or service and not the competition. Take this knowledge and apply it to each and every Talent Management tool. Use it in business discussions and when shaping the strategic agenda. Start today!

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New HR: Understanding HR’s Customers – Shareholder

In my last post I started introducing New HR with discussing HR’s customers: Management, Shareholder, Customers, Employees as well as Unions/ Works Councils to better understand the requirements and environment HR faces in today’s world. Having discussed Management last time, today I will discuss Shareholders.

Shareholder

Before Ulrich introduced Shareholder as an important customer for HR, no external group (or semi-external) was really considered a customer of HR. Ulrich has changed that – and this was an important step for HR. Why? – Well, of course one can have different opinions on the importance of satisfying Shareholder’s expectations, but no one can neglect that a company without Shareholders would go cease to exist.
However, during my visits to different HR functions of different german, european or global companies I have not found more than a small trace that these HR functions take shareholders serious and really understand their expectations and work accordingly. So there is still quite a room for improvement. But before going into this topic, let’s start with why Shareholders are important customers for HR.

The connection is a fairly easy one. Shareholders have in general one or two main targets why they invest in a company. The first and in most cases only goal is to generate a good ROI, may it be through dividends or a rising share price. Sometimes an additional, sustainability focused goal is added and also actively promoted by the company. (just listen in to Apples last analysts call…). And HR is one of the functions to have an impact on these goals. Not a direct one, but an indirect impact. How?

Well, when it comes to the company’s external representation, HR plays a big role – through Recruiting and how HR is representing the company in building an outside view of the EVP (Employee Value Proposition). In addition, as already discussed in one of my earlier posts, HR should not be a backoffice function, but a performance support for the business functions. And the business functions in turn should generate a good margin to satisfy the Shareholders.

Ok, but why does HR then need to treat Shareholders as customers? – because Shareholders do not just by chance invest in a company. They do this because the believe in this company and its ability to generate an ROI. And HR needs to understand this “believe” what is it the Shareholders believe in? Is it quality? innovation? size? – whatever it is, this is what the company needs to deliver on and what HR a) needs to support and enable through processes and products as well as b) also shape and emphasize in its external recruiting market approach.

Sharholder’s reasons to invest in companies have changed over the period of the last 15 or so years – meaning since Ulrich discussed them. But, their importantce and how to treat them in general did not change.

This discussion has hopefully shown why Shareholders are important for HR and why HR needs to treat them as customers. In my next post I will highlight external Customers as customers of HR. Another group which was neglected pre-Ulrich.

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New HR: Understanding HR's Customers – Management

In my recent post I already mentioned that for me the next evolution of HR is outstanding. I am deliberatly speaking of HR and not the HR function or department. From my perspective, just taking the HR department into account when speaking about HR tasks and responsibilities is short-sighted and no longer viable. In addition, I believe that the HR departments as they exist today need to split into separate, specialized departments.

But step by step: Before thinking about New HR, the requirements and challenges today as well as tomorrow need to be explicitly debated – New HR should be applicable at least for a decade to really offer sustainable value for todays businesses. And debating starts with understanding who are the customers of New HR?

Basically, since Ulrich has performed his evaluation of HR’s customers, not much has changed – however, the importance of the different customers has changed. Therefore, examining the different customers, their requirements and challenges builds the starting point for New HR.

Back in Ulrich’s times and the same is true for today, HR’s customers are:
– Management
– Shareholder
– Customer
– Employees
– and in many countries and many industries: works councils and unions.

1. Management

Let’s start with Management, starting with the Board, down to Teamleads. Each employee with leadership responsibility has to be counted into this category. But of course, this makes the diversity in this group big and of course the different levels of leadership positions have different requirements for HR, need different HR services.

Top Management requires strategic as well as operational HR support. It needs a true and capable HR player, not only partner (like Ulrich used to say), who is capable of advising across the complete menu of HR. This advisor role is of course future focussed (strategy) as well as based in today’s business (operations) – but in any case beyond a company’s workforce.

Just below the top management level, the mid-level leadership team also requires HR support. This is less strategic and more operations focussed – but still not to be mixed up with transactional. This is the layer that puts strategy into practice – and this requires people. Typical HR support here is Change Management or Journey Management or Organization/ Workplace Design.

And last but not least there is the Teamlead level. These are managers that often don’t see themselves as Management – however, they do lead teams and have to form those teams as effective as possible. In addition, this is the group that has to mainly deal with employees, their careers and demands on a daily basis.

Current HR models do not entirely answer these requests in theory, and in practice mid-level Management and Teamlead support is often non existent.

New HR has to deal with these requirements and find cost-effective, efficient answers. In my next post I will debate Sharholders as the next customer group of HR.

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Real Talent Management – from hype to necessity

HR for a long time was based only around administrative, transactional activities. Fact is that HR as we know it today originated from “personnel” which did not do anything else (at their time) than contracts and pay checks. Only over time the working field of “personnel”  has changed. From “personnel” the next evolution was to personnel administration in the 1970ies. This was also the first time that personnel was a separate department. Before, it was mainly a sub-function. From personnel management at the end of the 1070ies the next transition was to Human Resource Management in the mid 1980ies. Only in the 1990ies (although already recognized in research in the 1980ies) Ulrich with his Strategic HR function appeared. Until today though, there was no big evolutionary step afterwards. Strategic HR is still where we are today.

But the question is if the next evolutionary step is outstanding? – research as well as practice should get ready to answer this!

In recent years the term Talent Management appeared and grew big. In the beginning understood as elite coaching of high potentials, it changed to being a new hype applicable to each and every employee and applicant supported with high gloss company image pages and campaigns. But this is just marketing. In many firms Talent Management is not a lived reality. But if a firm wants to be successful or wants to remain successful, Talent Management should become lived reality pretty soon – the war for talents is on if not over, and the talent has won!

Important skills a rare!
In general, in most 1st world countries, especially in Europe, the available workforce gets smaller and smaller. On the other hand, the trend towards more complex products and services requires more and better skilled employees. In addition, today’s talent is way more flexible than ever before – but not for the good of companies: Flexibility for today’s talent means that talent is ready to switch jobs and even employers if they do not find fulfillment in what they are doing – but on the other hand are not flexible to trade work-life-balance today for more money tomorrow.
Talent Management has to step in here and offer a solution. Real Talent Management means more than single non-coordinated programs or high potential coaching. Real Talent Management is an integrated part of the complete employee life-cycle, therefore built into each HR process, but also integrated (and this is as important) into the day-to-day work environment of each and every employee. This means that all direct Talent Management processes (e.g. Performance Management, Learning, Succession Planning, etc.) are implemented – and of course aligned with the goals and strategy of the company as well as the needed employee profile. But in addition, the secondary Talent Management processes (mainly HR admin) need to be aligned with Talent Management as well. This means for example that an HR Serviceline is not only utilized to be efficient in answering employee requests, but treat employees as valuable talents – so have a kind of CRM system to better service each and every employee.

Last but not least, embedding Talent Management in the day-to-day work environment. Especially at the work place the management team/ leadership needs to live Talent Management by example and action – because this is where talents spend most of their time. And if they do not feel Real Talent Management at this place, all other initiatives and processes will not be successful.

In essence, Real Talent Management is a holistic approach to Talent Management which of course sees HR responsible for it, but which needs to be lived through each and everyone with HR responsibility – and this also means management at each level.

From my experience, today’s HR departments are not in a position to support Real Talent Management – hey need to adjust. In addition, there are external pressures for example through Integrated Business  Services that urge HR to change and adjust, too. Answers to these new challenges and requirements as well as the external pressures are so far not to be seen in theory or practice. For me, Real Talent Management is the next evolution of how HR work needs to get organized and done. But more about that in my next post.