In a speech addressed to HR professionals within the financial and professional services sector earlier today, Mervyn Davies, CBE, chairman of Standard Chartered Plc, urged HR delegates to adapt to a fast changing world, else companies would go bust.

The event, Talent Crunch in City HR, focused on research conducted by HR recruitment firm Oakleaf Partnership which revealed a severe lack of senior level HR input at strategic level.

Employee engagement
The mood of society is changing says Davies. Before, companies focused on making profit, now, that's not enough. Also, the recent Northern Rock fiasco has given the City cause for concern and this is a timely reminder that HR needs to create a solid people foundation. Individuals who are fighting for their own bonuses within banking, has created a culture of greed and this has become a disease in itself.

"HR plays a critical role in corporate competitveness. Employee engagement is a leading indicator of business performance and at Standard Chartered, we have proven positive correlations between high engagement and profitability, productivity, employee retention and customer loyalty," he comments.

Fostering talent
While jobs are being cut in many City firms, HR still needs to ensure that it can find the best possible talent. HR functions need to protect themselves from the inevitable tightening of budgets and rationalisation of headcount. So now more than ever, you need to focus on your talent and that talent has become more demanding. For example, graduates have become 'global citizens' and are demanding to know how your organisation is giving back to the community and they want to see your corporate social responsibility policy. 

Key metrics
"It's simple, you really need to test employee engagement at all levels of your organisation. The more you engage staff, the more you get results and reduce turnover. Also conduct exit interviews and really analyse the trends," he says. So gather evidence why establishing a people culture is so important and preach it to your CEO. Be prepared to argue at board level to get the message across that your people are key to your organisation's success. If your message is still not getting across then you have no choice but to leave.

Create core values
Davies says: "My message to you is that HR has to be the guardian of the values of the culture of the company." In response to the article written by Financial Times journalist Luke Johnson suggesting that there is no need for HR, The truth about the HR department | debate on the HR circuit, he continues: "Johnson doesn't know what he's talking about, it's absolutely pathetic."

Diversity
However, the challenge to HR in finances and professional services is to champion talent and seek it from other industries and cultures which includes embracing diversity. Explore other leadership styles, but in order to do this you have to understand the culture of different races explains Davies. He suggests setting up an informal meeting where you invite five or six employees of different nationalities to openly discuss their cultures and values then eventually expand that group.

Oakleaf survey findings:

Survey make-up

Out of 112 senior level HR professionals in the financial and professional services in the City of London:

46% HR directors, MDs or partners
28% heads of division or heads of HR
26% VPs or HR managers

Results

• 87% say there are not enough quality HR professionals within financial and professional services
• 42% strongly believe that increased visibility of HR in organisations is leading to greater demand for top quality HR talent across all sectors
• 62% agree that HR staff leave the City in search of a better work/life balance
• 77% recruit from other organisations in the City
• 55% say commercial acumen is a vital attribute for new recruits
• Just over half say they are quite well staffed to support the business in the current climate
• 52% state that their customers really listen to what HR says and works in partnership with the business

Are you worried about the talent crunch? We'd like to hear what you think.