How Executives are leveraging a company’s greatest human resources asset
HR is having its moment. From compliance and administration to strategy and transformation, the role of the Chief Human Resource Officer continues to expand in scope and rise in profile and impact, and CHROs themselves continue to adapt.
WHAT IS A CHRO TODAY?
They are as different as the companies they help to lead. Some CHROs work with startups and innovative entities that attach a strategic business orientation to the human resources function from the outset. Others work in sectors that look at human resources through a more traditional, personnel management and administration lens. All are adapting to the changing landscape of business and the new drivers of human engagement and performance.
THE CHANGING ROLE OF THE CHIEF HUMAN RESOURCES OFFICER
While Human Resource departments typically have responsibility for the employee life cycle, benefits administration, payroll management, and compliance with company policies and labor laws, the pace and nature of change over the last decade has transformed the function and purpose of HR. Several features are different:
1. A seat at the table
First and foremost, the CHRO has a seat at the table. Recent research from Edelman found for the first time that employees have overtaken customers as the most important stakeholder for businesses. Finding, retaining, developing and deploying human talent is central to business success, making strategic human resources an imperative for business and making CHROs key members of strategy teams.
2. Digital transformation
For a business to digitally transform it needs digitally capable people, which is why the engine of transformation is HR. The CHRO leads the identification of essential skills and competencies required to achieve the business strategy and builds the talent pool from recruiting to training and development, meeting the needs of the moment and the future.
3. HR analytics
CHROs are using data to give teeth to talent management and DEI efforts by tracking recruiting, hiring, promotion, engagement, development and compensation across functions and departments to identify what works and redeploy those tactics, or spot problems and make course corrections early. Today’s CHRO can leverage data and analytics to lead change with an evidence-based approach.
4. Digital employee experience
A natural by-product of digital transformation is the evolution of how employees engage with HR. In a world where most information is a few keystrokes away, human resource departments are increasingly providing their clients with quick digital access to their benefits, pay, performance review and more in a self-service model.
5. Wellness reimagined
CHROs are increasingly taking responsibility for a broad definition of wellness which affects recruiting and retention, beyond the extensive COVID-related health and safety measures. Particularly for next gen talent, “Well-being and mental health have come to the forefront—with urgency.”
6. Ethics Officer
CHROs are increasingly responsible for the ethical use of the new tools being deployed in HR, such as software solutions for applicant screening, data scraping to refine staffing needs, and monitoring tools that track the activity of remote workers. These new responsibilities can include auditing screening algorithms for bias, protecting employee privacy, and meeting demands for transparency in the nature of various tools and how they are used in HR decision-making.
KEY COMPETENCIES OF A CHIEF HUMAN RESOURCES OFFICER:
A 2021 report from Mercer, Leading the People Function, identifies five key attributes of a great Chief People Officer: listener, cultivator, storyteller, activator, and transformer. AESC members are finding the CHRO candidates most in demand have several emerging key competencies:
Adaptability: Adaptability may be the most sought-after competency. How nimble are they, and can they roll up their sleeves and figure out how to put in a performance management system while also advising the CEO on how to build a great culture in a high-growth company?
Proven DEI success: It has become table stakes in every respect for a CHRO to have a track record around diversity, equity and inclusion, and that they bring measurable results.
Stakeholder influence: Particularly for large, global public companies, a CHRO should be able to operate at the top with the board, compensation committee and more, and also influence, inspire and engage employees.
Multidimensional: CHROs now need the capacity to be a serious business partner. Companies are looking for leaders with the full range of emotional intelligence, as well as the hard-nosed commercial and data skills. Aspiring CHROs can build their credentials in terms of P&L management, as well as facility with balance sheets and other financial metrics that they need to be credible in the C-suite.
Global: One of the harder things to find is a CHRO who has worked and lived in a different country and culture, which is a critical and a foundational element to reaching the top role in global companies.
Digital: The digital CHRO should be able to leverage ‘people analytics’ to tell a story back to the leadership, and to the business. It's not enough to have data—the business needs someone who can translate it.
THE CHRO OF THE FUTURE
Many leading executive search consultants predict HR as a siloed entity will disappear. The CHRO of the future will draw on data and analytics and other commercial practices within the business and will be even more directly oriented toward achieving business outcomes. CHROS will come from (and move to) other roles. In some hyper-growth organizations, for example, many chief people officers are former chief marketing officers, focusing that commercial, strategic mindset on people. And the CHRO will be someone in the line of succession for the CEO, for example Leena Nair, recently CHRO for Unilever who has become the CEO of Chanel.
Workplaces were changing before COVID-19 but the pandemic accelerated those changes. Digital transformation went from incremental to immediate; workplace flexibility went from a perk to a necessity; employee, stakeholder and community health and wellness rocketed to the top priority of leadership teams, and CHROs adapted to it all. With speed and intensity businesses are changing, and CHROs of the future will be ready to adapt to whatever that future brings.
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