The Haythornthwaite Review: Heavy Artillery in the War for Talent?

Armed forces and commercial organisations around the world are struggling to recruit and retain the talent they need. The causes are numerous, and in many cases long-standing, but the war for talent is not going well. The Defence Command Paper in 2021 commissioned a ‘comprehensive review of how we pay and reward our military personnel … and guide our efforts to develop a modern, holistic through life approach to the military offer’. Called the Haythornthwaite Review after Rick Haythornthwaite, the senior executive appointed to lead it, the Review was published on 19 June 2023.

It is a comprehensive paper (135 pages) with a refreshingly broad view of the original remit – which might otherwise have constrained it to examining pay, pension and allowances – by examining the whole People system. Perhaps most importantly, however, the Review avoided the original Command Paper constraint that it was to be ‘cost neutral’; reassuringly, the final report even observes that being ‘cost aware’ is difficult given the problems the Ministry of Defence (MoD) has with understanding the costs of its people. Unsurprisingly, therefore, many of the recommendations address questions around improving Defence’s understanding of its people through better use of data, together with further work to deliver what is needed once that understanding exists. But with so many other pressures on the Defence budget, such as rearming to replace equipment given to Ukraine, increasing stockpiles, modernising the armed forces, improving readiness and addressing the problems of inflation, it is far from clear that the investment needed will be available for people capability in the short term.

The Review’s title, ‘Agency and agility: incentivising people in a new era’, aims at many of the challenges of the current system and describes its ambition – no less than a comprehensive review of the current HR system. Agency challenges the sophisticated paternalistic approach that has characterised the traditional relationship Defence has with its people, empowering individuals as actors with a greater say in their careers. Agility seeks to move the system from its industrial-age, static and predictable model to one that is more organic, dynamic and fluid. Its reasoning is very sound: the world is less linear and predictable, which means static models will neither deliver the talent that organisations need nor satisfy the expectations of their people. It rightly identifies that simple solutions that tinker with one element of the current approach are not enough; so, its nine substantive chapters cover the breadth of the HR system, looking at ways to make people feel more valued (although in this regard it is noted that the government still has to respond to the pay recommendations from the Armed Forces Pay Review Body report for the period from April 2023), more flexible tools for incentivising service, digitalising HR processes, upskilling a broader talent pool, empowering leaders, and developing core parts of the system such as career management and workforce planning. But it does acknowledge elements that Defence does well and should protect, including maintaining a sense of duty and accountability, the will to win and strong bonds of service and camaraderie that will help it compete for talent among those looking for a sense of meaning and purpose.

While the Review acknowledges positives in today’s approaches, it also deals well with the challenges posed by the future operating and employment environments, noting that ‘more people are currently leaving the regular forces and reserves than are joining [and that] recruitment continues to draw from an unrepresentatively male and white demographic’ (para 4.2). This is not new: the Haythornthwaite Review’s deductions and diagnoses are enduring – indeed, many of the points made in the Review are similar to those made by Sir Michael Bett in his Review of 1995 (‘Independent Review of the Armed Forces' Manpower, Career, and Remuneration Structures: Managing People in Tomorrow's Armed Forces’, HMSO). Like the Bett Review, Haythornthwaite also cautions against cherry-picking of its 67 recommendations, although in the case of Bett that element was perhaps the first of its approximately 150 recommendations to be left behind as Defence opted for those it found most acceptable or simplest to embrace. The problem with ‘all or nothing’ approaches is that they remove agency from those who need to own the reform – namely the leaders of the MoD – and could hinder adaptation as complex systems adapt to the changes. Haythornthwaite is correct, however, in emphasising the need for a comprehensive awareness of the people system so that the MoD can observe and orient to the perturbations emanating like ripples as new policies drop into the policy tank. Key recommendations cover: the creation of a spectrum of service that is part of the culture, not merely a chance for regular personnel to temporarily dial down their commitment; a total reward system that offers more flexibility with remuneration, but also looks beyond the financial levers; more empowerment of individuals to shape their own careers through enhanced access to information and a greater voice; better and more adaptive learning and development opportunities that support skills-based careers; and better tools for those delivering HR.

There is much to commend in the Haythornthwaite Review. However, there is also arguably little that successive generations of senior Defence leaders did not already know they should be doing, but have failed to deliver. The unanswered question, therefore, is ‘what has prevented implementation of HR change programmes over the last 30 years?’ Two factors are perhaps most significant, but are not resolved in the latest Review, despite a chapter devoted to implementation.

The first missing element is clarity over HR responsibility and authority. The Review recognises that the Services remain the primary actors in the people space and need to be able to tailor HR approaches to suit their specific needs, because ultimately, they own the ‘lived experience’ of their people. But beneath that high-level statement, there is a lot that remains unclear which the Review has not addressed. The relative authority of the Chief of Defence People compared to that of the Service chiefs remains opaque in practice. This complicates decision-making in the People space, although helpfully the Review leans towards strong Service brands operating within a framework that is governed by a small strategic central function, where more effective understanding is enabled by better data. This is consistent with the recommendations of the 2011 Levene Report, but the fact the debate still remains highlights the difficulty Defence has had in implementing strategic reforms. A proper review of authority across the elements of the HR operating model that is understood by the different actors is essential if the Review is to be implemented successfully.

The second key factor for implementation that is missing – and which is as important as the question of authority – is ensuring that the people required to implement the (much needed) changes have the knowledge, skills and attitudes to do so. This requires greater professionalism in the Defence HR system at both an individual and organisational level, as recognised in the Defence People Strategy published in 2020. The work on creating ‘professions’ within Defence offers just such an opportunity. But while upskilling the HR function is an essential part of the response, including skills development of military HR specialists, this is also an area in which a whole force approach could add real value. Defence HR professionals are generally very good at transactional HR activity, but often lack expertise in more strategic HR such as business partnerships. Supplementing their knowledge of the Defence HR system with external HR experts who are more adept at strategic HR, either through lateral entry or as expert advisors in another part of the whole force, is crucial. So too is ensuring that those responsible for delivering the recommendations have the time in post to do so, and can focus on the purpose of the recommendations, not just their wording. This may mean longer tours for senior owners of activity and a central function that has the data and skills to hold those responsible for delivery in the MoD and the Services to account. Then, in the famous words of a sports shoe manufacturer, ‘just do it’. Start experimenting and iterate from there, as Haythornthwaite advocates. His is not a programme that defines the end state in policy terms, but it offers a vision of a more flexible and adaptive model that will give Defence a golf bag of HR options, allowing the Services to play the shots the environment needs even as that environment changes.

The Haythornthwaite Review does not offer the HR function silver bullets (or artillery shells), but a toolset and mindset to compete. Whether it is enough to win the war for talent is uncertain, because the other employers against whom Defence is competing for talent will also adapt to the changing skills environment, and have traditionally done so much more quickly. In the operational space, Defence recognises John Boyd’s observation that whoever evolves fastest wins; the challenge is to embrace that mindset in Defence HR. The Haythornthwaite Review offers an opportunity to reset an HR culture that has in many respects prioritised process over outcome, and could give Defence the tools to adapt and compete over the long term, if the HR function can respond. If the Defence People system is to be made fit for the 21st century, the HR physician must heal itself as well.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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