An UPDATE: What CEO’s Look for in Today’s CHRO

SEPTEMBER, 2022

Working with both CEOs and CHROs provides our team with an exclusive point of view into the characteristics and attributes CEOs seek from HR leadership. Most recently, we’ve had a front row seat to the most tumultuous time individuals, organizations, and leadership have had to endure. Between a global pandemic, widespread political and social unrest with the ensuing discourse, the Great Resignation, renewed commitments to diversity, equity, inclusion & belonging, the war on Ukraine, the war for talent, mass shootings & violence, economic uncertainty, taking a stance on social issues/social media, unprecedented levels of employee anxiety and stress, quiet quitting... did we miss any?

In response, organizations have shifted strategies, many moving quickly to the cloud and relying upon strong leadership, speed, and agility. And while the role of the CEO has become a critical driver of change, the common thread across every organization is talent...attraction, retention, development, engagement, advancement.

We are submerged in the changing role of the CHRO (and the HR function) and often get asked what it takes for the CHRO to really play a driving role in an organization’s success.  We’ve identified and recently updated core skills that CHROs need in order to play a critical role driving human capital strategy. 

CHRO Skills: The Imperatives

Today’s CEOs are looking for CHRO candidates who bring a deep understanding and proficient ability to: 

UNDERSTAND BUSINESS DRIVERS AND FINANCIALS

The CHRO should be able to read and understand the implications of a balance sheet as well as the CTO, the Chief Marketing Officer, the Chief Commercial Officer or other non-financial members of the C-Suite.  In addition, the HR leader needs to genuinely understand how the organization makes money and how each function or role contributes to revenue generation. CHROs need to appreciate the competitive landscape, customer needs, product roadmaps, and relevant technologies and processes. Ultimately, a CHRO should know both what – and how – an organization produces a product or service.  The ideal CHRO is a business leader whose functional expertise is HR, not the other way around.

ENSURE A DIVERSE, EQUITABLE, & INCLUSIVE ENVIRONMENT

Developing a diverse, equitable, and inclusive workplace is critical to organizational success. A workforce that more closely mirrors the surrounding community and customer base will benefit from new perspectives, innovations, and opportunities. In fact, companies with a more diverse workforce are 70% more likely to capture new markets, according to a report in MarketWatch.

Glassdoor reports that 76% of employees and job seekers demand diversity and inclusion in employers.Increasingly, employees want the ability to take positions on social and political issues free from negative implication, seeking both physical and emotional safety within the workplace. A culture of belonging, where all voices are heard and valued, contributes to professional and business growth and development. CHROs that understand that diversity is more than an “HR program,” and who can activate, engage,and include the entire organization are highly sought business leaders.

IDENTIFY DRIVERS OF COMPANY CULTURE

Beyond fun and food, the CHRO must set strategies, policies, and programs to attract, retain, and develop employees and to institutionalize desired operating principles. While the CHRO is not the single owner of culture, this leader must understand how others in the organization can drive, contribute, and continually reinforce it.  CEOs and leaders who understand that the right company culture drives organization success, rely on the Human Capital leader to help that culture flourish.

ENSURE WORKFORCE CAPABILITY AND CAPACITY TO DRIVE BUSINESS PERFORMANCE 

This skill involves identifying linkages between people-related requirements and obstacles (at the macro and micro levels) and the achievement of corporate goals.  This HR leader needs to have keen insight into their workforce’s capacity, its potential shortcomings, and have a plan to address any gaps that need to be bridged. Skills assessments, performance management, learning & development and succession planning are required competencies of Human Resources leaders.

ALIGN ALL THE HUMAN CAPITAL DRIVERS

Strong CHROs understand how to align all the levers—recruitment, employee engagement, development, rewards and recognition, and the culture that drives the desired behavior.

LEAD TRANSFORMATIONS, INCLUDING M&A DEALS

Transforming businesses and M&A are a way of life in all sectors of the economy.  The Institute for Merger, Acquisitions and Alliances reports that in the first half of 2021 there were close to nearly 7,500 M&A events in North America alone. The CHRO must ensure that employees at all levels are motivated and prepared to embrace and drive change. Stagnation is what results in hanging on to the status quo.

EFFECTIVE AND INFLUENTIAL COMMUNICATION AND COACHING

More than ever, today’s CHROs must be effective communicators with an ability to influence, motivate, and activate a workforce within a frequently changing environment. Having navigated through the significant changes and challenges these past several years, HR leaders with effective coaching skills are in high demand. The ability to listen effectively, sharing broad perspective and guidance has become a top desired skill for CHROs within the C-Suite. 

Reflecting upon the past 2+ years, HR Leaders have led organizations and individuals through a global pandemic, widespread social unrest, a requirement to strengthen a Diverse, Equitable, and Inclusive workplace, a War in Ukraine, Communicating Social Issues, widespread mass violence, a new way of working—hybrid, remote, return to the office, and most recently, quiet quitting. Each of these impacts people in different ways, thus having an impact upon performance and productivity at work. Human Resources leaders have never been more important to the success of an organization (and the talent that delivers results).

To be sure, these past 2+ years have proven we can accomplish anything...as long as we have strong HR leaders to help guide us forward.