People are the most valuable asset your company has, and likely one of if not the largest expense for you. With that in mind, how serious are you about getting the most out of your Chief Human Resources Officer (CHRO)? Unfortunately, many CEOs don’t fully understand the CHRO role or responsibilities. Thus, they are unable to tap into the potential the CHRO can offer the company.
The first, and most important, step for CEOs is to stop thinking of Human Resources as simply an administrative function. While there will always be administrative tasks associated with Human Resources, those are being delegated from CHROs to line managers to handle. CHROs are focusing on strategic initiatives to improve workplace culture…a critical element to attract and retain strong executives.
Supporting this shift from an administrative to a strategic role is a piece in Entrepreneur. In it they note that CEOs would like to see Human Resources deliver on four mandates: matching talent resources with company strategy, attracting the best and brightest candidates, providing a top notch onboarding process, and fostering employee engagement. If you re-read these, you’ll notice they are all strategic initiatives, not policy driven tactics.
Talent has become a competitive advantage. The speed of change driven by technology has made finding and attracting the best candidates harder than ever. Even with all of the applications and social networks at our fingertips, the top candidates can remain out of reach without a strategic approach to luring them away from their current position. An innovative CHRO and trusted executive recruiting partner can get you to the finish line. And once you have a commitment, the CHRO will need to turn their attention to retention.
A recent article by Spencer Stuart speaks to the need for an alignment between the CHRO, CEO, and CFO. “These three leaders are equally responsible for executing the business strategy, with distinct yet highly interdependent roles to play: the CEO defines or leads the vision/strategy, the CHRO articulates and drives the people agenda, while the CFO manages financial resources and investments. It takes people and financial resources to implement the business strategy, which is why the relationship between these three leadership roles is so vital.”
As you can see, the CHRO role is evolving and growing more complex. With an increasing business focus on talent, CHROs are becoming more diverse in their thinking and approach, broadening their skillset to include more business leadership capabilities, along with technology adoption and an increased focus on company culture.
The Spencer Stuart article calls out 11 capabilities for CHROs:
- Strategic mindset and business acumen – discerning, future-orientated, open-minded, commercially judicious and able to make evidence-based decisions that align with business strategy
- Change and transformation management – defining and adapting corporate strategies, structures, procedures, and technologies to handle changes in external conditions and the business environment
- Mastery of executive compensation – designing competitive, equitable compensation and incentive structures to attract and retain key talent
- Clear understanding of board governance – bringing expertise in compensation, succession, talent, and the people implications of mergers and acquisitions
- External focus – good sense of the external industry competitive landscape
- Shape culture – defining and co-creating the organisational culture with the executive leadership team
- Committed to diversity and inclusion – articulating the business case for diversity alongside the CEO
- Leadership gravitas – possess referent power underpinned by competence and an undisputed delivery track record
- Balance agendas of high-level stakeholders – navigate and balance the various demands through effective communication, seeking alignment and managing expectations
- Visible, value-added partner – seen everywhere within the organisation and in touch with the pulse of the organisation at all times
- Courageous – willing to say “no” when necessary
The CHRO role will continue to change, and getting the most out of it means embracing the CHRO at the executive level and working with them to understand how they increase their contribution to the company. If you are looking for a CHRO or need help in understanding the role and how it can contribute to driving revenue, send us a note. Our executive recruiters have extensive experience in identifying and attracting the right CHRO for your company to take it to the next level.