There is a huge gap between talent practices at large companies and those in the middle market. Large companies have gone through major transformation over the last 15 years, moving from manually based personnel processes to web enabled employee and manager self service. This change has allowed these companies to focus their HR teams on key talent imperatives, primarily finding and getting the right people, developing people and putting people in the right roles. Without a doubt, results have been inconsistent, but the trend is in the right direction as employee engagement becomes recognized as a major barometer of business health.
In contrast, many middle market companies are still operating in a very antiquated fashion when it comes to people practices. Often, when I visit these companies, it reminds me of pictures I’ve seen of Cuba where the streets are lined with old cars no longer driven in the United States. Manual personnel practices are much the norm, and work is done on spreadsheets rather than on web-based applications. This applies to performance management, the annual compensation cycle and, to some extent, even payroll. In this environment, it is impossible for the HR team to think strategically about the business of talent development.
Until recently, this state of affairs was defensible. Outsourcing alternatives and powerful HR software applications were just not available to the middle market at affordable prices. This has now changed. There are several strong providers of outsourced HR services for the middle market. And, there are numerous affordable HR and talent software applications from which to choose. Yet, too many companies are still doing things the old fashioned way.
The irony is that middle market companies have an agility that can be a strong competitive advantage over larger companies. While larger companies often have more depth of resources and capital, smaller companies can change more quickly, including changes related to developing leaders, growing talent and shaping culture. But, this will not happen if the HR team is bogged down with old manual ways of working. Once the team is freed from the yoke of the past, great things are possible very quickly.
If you own or lead a middle market company, it’s time to recognize that transforming HR and focusing on talent is one of your biggest opportunities for rapid growth.