Outlook for the CHRO Role
What You Need to Know Right Now to Level Up as a Chief Human Resources Officer
The perceived skills gap, the rise of human-resources technology, and the fierce competition to hire and retain the best talent are among the reasons the role of human resources in general, and specifically Chief Human Resource Officers (sometimes called Chief People Officers), have gained new importance.
In recent years, the CHRO role has taken on a greater strategic focus, as well as a mandate toward change management, organizational transformation, and innovation. “The key charge for the CHRO functionally,” notes a 2014 study by Heidrick & Struggles, “is to turn talent management into an instrument of business transformation that advances strategy, develops agile leaders, and coalesces in culture.”
The Society for Human Resource Management (SHRM) also notes these aspects of the CHRO role: succession planning, talent management, organizational and performance management, training and development, and compensation. The CHRO also conveys HR needs and plans to the executive management team, shareholders, and the board of directors.
Agilon CHRO Rick Thompson perhaps summed up the role best when he said in an interview by employee Samantha Holland, “it comes down to, ‘Are we really giving our employees what they need to be successful?’”
Key Competencies for the CHRO Role
The list of competencies that industry experts prescribe for CHROs is quite lengthy compared to other C-Suite roles, perhaps reflecting the eclectic background that many gurus suggest for those in this role. Some, of course, apply to all C-Suite roles – business acumen, ethics, leadership, communication, strategic focus, as well as understanding of board governance and ability to negotiate effectively with the board.
In your career-marketing communications, showcase the CHRO competencies on this list that you possess:
- HR expertise, including learning and development, compensation and procurement costs, benefits administration, critical evaluation, talent acquisition and market knowledge, compliance and legal knowledge, proficiency in executive compensation, and financial planning and forecasting. SHRM suggests 15 years of experience.
- Change and transformation management, as well as innovation and disruption
- Relationship management
- Culture creation
- Global and cultural awareness
- Commitment to diversity and inclusion
- Ability to read people
- Comfort with ambiguity
- Emotional intelligence
- Ability to use data
- Operational thinking
Here are a few suggestions for those seeking to break into the CHRO role, expand their horizons in an existing CHRO role, or even rise beyond the CHRO role:
- Beef up your HR education. A graduate business degree is almost always valuable. In addition, writing for Chief Executive, Fran Hawthorne cites two educational programs recommended by HR experts:
- Cornell’s ILR Executive Education, which includes a program that prepares “high potentials for the CHRO role.”
- University of Michigan Ross School of Business, Advanced Human Resource Executive Program, a two-week program that teaches “how to lead your HR operation to advance overall business strategy; deliver value to investors, customers, and employees; and set a new, strategic vision for your HR operations.”
- Plan your career with a mix of HR positions and roles in other parts of the business. Ram Charan, Dominic Barton, and Dennis Carey assert in the Harvard Business Review that would-be CHROs should progress up the ranks through line positions, “where they have to manage people and budgets.” The authors go on to suggest that “all leaders headed for top jobs should alternate between positions in HR and in the rest of the business. You will stand out because, as Gartner reports, “only 20 percent of Fortune 250 CHROs have working experience outside the HR function.”
- Attain international experience. Global experience among CHROs is increasing. “CHROs need to have much more of a global perspective than their predecessors,” writes Flavio Kosminsky and Kathleen Cannon. Some experts suggest several years of experience abroad, while others assert that even a few months can be valuable.
- Seek out HR-friendly organizations. “Look for CEOs who understand that it is people who add business value,” advises Barry Lawrence with the HR Certification Institute. “Get clear answers about the leadership team’s HR expectations,” he says.
- Don’t rule out a quest for CEO. “With the heightened attention to talent and culture,” writes Heather Landy on Quartz at Work, “and the increasing interest in having those functions led by well-rounded executives, it isn’t difficult to imagine a day when the CHRO job becomes a natural pathway to the CEO role.” Similarly, Harvard Business Review reported in 2014 on a research study by Ellie Filler and Dave Ulrich that concluded: “Except for the COO (whose role and responsibilities often overlap with the CEO’s), the executive whose traits were most similar to those of the CEO was the CHRO.” Although the article focuses on why companies should consider CHROs for CEO roles, it also describes characteristics of CHROs who advance to the top role.
CHRO Trends to Watch
- CHROs are less experienced in traditional HR functions than in the past. On the flip side, however, they are more experienced in diverse aspects of business, which is seen as adding greater value.
- A CEO/CFO/CHRO triumvirate is seen as powerful. This prescription comes from the Harvard Business Review’s Charan, Barton, and Carey: “Just as the CFO helps the CEO lead the business by raising and allocating financial resources, the CHRO should help the CEO by building and assigning talent, especially key people, and working to unleash the organization’s energy. Julia Modise, writing in HR Future, concurs: “The CHRO is seen as a strategic partner to the CEO and CFO.”
- The CHRO role appears to be woman-friendly. More than half (57 percent) of Fortune 200 Chief Human Resources Officers are female, reports a 2017 study by The Talent Strategy Group.
- Human Resources is gaining greater respect. In 2015, Charan, Barton, and Carey reported on research by McKinsey and the Conference Board that “consistently finds that CEOs worldwide see human capital as a top challenge, and they rank HR as only the eighth or ninth most important function in a company.” By the end of 2018, “the CHRO has progressed from fighting for a seat at the table to playing a key role in the executive team,” writes Modise.