Innovation Gives HR a Leg Up

The use and effect of innovation in human resources and talent management — the need to be innovative — has been a focal point of many HR discussions for some time. With innovation being hailed as one of the turnaround tools for the global economy and providing a route to growth, it is not surprising that it is being taken so seriously by HR departments around the world.

In a fiercely competitive war for talent, HR and talent management departments are using innovation to source, recruit and engage employees, showing candidates that the company is forward-thinking and serious about change and improvement. It is also a way for an organization’s brand to stand out to employees, differentiating it from the competition. As the availability of top talent dwindles, the cost of hiring rises. These business reasons have moved innovation from a nice-to-have element within the talent management process to an essential differentiator.

Recruiting and consulting company Futurestep, where the author works, recently conducted a global study to explore the power of innovation, looking at its influence at key stages of the employee life cycle to see what innovative methods at the recruitment, engagement and development stage meant to 800 recruitment and talent managers and 4,000 employees worldwide.

“The Innovation Imperative” study highlighted a common belief that innovation represented improvement. It showcased the importance of being a company that thinks outside the box, is ahead of the curve and is brave enough to do things differently to continually improve.

The Importance of Innovation

With global figures showing that nearly 50 percent of employees would be prepared to quit a job where they are happy if they felt they were being let down on promises related to innovation, employers are receiving a clear message: Think bigger about innovation in HR if you want to keep high-impact talent.

North Americans fell between Europe and BRIC nations (Brazil, Russia, India and China) when it came to innovation and motivation. Seventy-eight percent of North American candidates said their motivation levels were influenced by innovation. This figure proved slightly higher than their European counterparts (76 percent), but compared to the BRIC nations it was noticeably low. Of the BRIC nations, Brazil valued innovation as a motivational tool the most, with 89 percent saying it influenced them, while 85 percent of workers in India and 83 percent of those in Greater China were motivated by the innovative practices of their workplace.

Nearly 4 in 10 employees in the U.S. (37 percent) feel positive about the overall state of innovation in their company — a sign that the country is achieving employee satisfaction in some fields.

There is no doubt among North American candidates and professionals that the products and services provided by a company play a key factor in making it innovative. Perhaps indicative of a market in which Apple and Google are based, 69 percent of professionals and 66 percent of candidates selected this area as being most telling about a business’ ability to be innovative. This response from candidates was the highest of all regions surveyed. For HR, recruitment and talent professionals, products and services can serve as a key element to trump the competition when attracting, engaging and retaining talent.

Funding New Approaches

Despite its deep-seated technology heritage, just 41 percent of professional respondents from North America indicate that they have an R&D budget for internal recruitment and talent management processes — the lowest by far of all the territories surveyed. So while there is overall positivity about the inherent value in recruitment and talent management innovation in North America, the outlook is less optimistic when it comes to the investment needed to drive new methods and tactics.

And innovation in recruitment and talent management matters. Nearly 8 in 10 North American professionals (77 percent) believe it is key to achieving growth targets. This view is reflected in the candidate market as well, with 74 percent believing companies in the U.S. need to do more to demonstrate innovation in recruitment and talent management. Outside of the HR department, innovation in talent management doesn’t seem to be a priority: only 47 percent of professionals said the wider organization values innovative HR approaches. This may help explain the lack of R&D budget for talent management innovation.

Gauging Impact

Slightly more than half (52 percent) of North American employees said they would consider leaving a role they are happy in if they were approached in a particularly innovative way, sending a message that U.S. organizations should be looking to perfect creative interview techniques and implement cutting-edge recruitment tools to entice high-impact talent.

This should be addressed on a global scale, as the need for innovation at the recruitment stage was pronounced among candidates. Nearly 5 of 10 (49 percent) North American respondents selected creative interview techniques as their first choice among innovative approaches to recruitment, a view that was shared by BRIC and European candidates as well.

When it came to tools to communicate in the recruitment process, candidates in North America most valued direct contact (47 percent) through email or services such as Skype, as well as the use of professional networking tools such as LinkedIn (37 percent). Professionals (55 percent) also agreed that direct contact methods are the most important tactic when recruiting.

North American respondents were less convinced by the growth and influence of custom-made online communities, including the use of dedicated Facebook pages or LinkedIn groups where employers can interact and engage with current and prospective employees and inform them of employment opportunities, as well as news and updates on the business. Only 13 percent of respondents in North America expected this to become important in attracting talent, compared to Greater China, where 34 percent believed the influence of these communities would rise in the next 12 months.

Flexible Working of Great Importance

When it came to benefits, the survey showed some traditional desires. Sixty-three percent of candidates and 55 percent of professionals cited flexible working as the most effective tactic at the engagement stage of an employee’s life cycle. It is clear that North Americans value their ability to work from wherever and whenever they want. New technologies, such as the cloud, have made it easier for companies to facilitate flexible working hours, removing the need to be in the office 9 to 5.

Candidates and professionals had different priorities for innovation at the development stage of the employee life cycle — the phase where employers place major focus on helping to improve and expand a candidate’s skill set. Six in 10 candidates favored implementation of performance-related bonuses compared with 41 percent of professionals.

The latter group felt innovation could be more effective when applied to internal mobility, where employees are given the option to temporarily move to another part of their organization. While some businesses may find it difficult to offer financial incentives in a tough economic climate, they need to think of alternative solutions for rewarding employees for their commitment during a time of ongoing economic strain.

The importance of HR innovation to employees can no longer be underestimated. Globally, the HR industry is changing and the North American employment market, viewed as one of the most exciting and diverse globally, is also at this crossroads. In a market as competitive as the U.S., securing and keeping the best talent is crucial. Candidates and professionals overwhelmingly agree that more needs to be done to incorporate innovation, not only to retain the best talent but to keep motivation and productivity high.

Companies should be listening to the priorities of their workforce, using new, innovative development approaches and technologies to create a culture of learning and enhance the enterprise’s collective capability and productivity. As with any opportunity though, the real priority must be converting potential gains into real ones. Candidates place clear value on innovation, and they are equally forthcoming about the tactics and approaches that they find to be most relevant to them. The challenge for recruitment, HR and talent management professionals is to deliver against those expectations and innovate in ways that deliver for both the business and the candidate.

Innovation isn’t a tick box exercise, or a whim of a tech-savvy HR manager, but a technique to help gain competitive advantage through talent, which remains a company’s greatest asset.

William Sebra is president of Futurestep’s North America business, where he is responsible for the continued growth of recruitment process outsourcing, consulting and retained search services across the region. He can be reached at editor@talentmgt.com.