Tuesday, February 18, 2014

CHROs…How Is Your Role Evolving?

Initially, the responsibilities of the Chief Human Resource Officer (CHRO) were clear-cut. Similar to a General Manager, and focused on the HR area of an organization, CHROs traditionally dealt with organizational design, talent management, recruitment, and rewards systems. Today, the CHRO role has evolved drastically and it continues to change.  How has your role as a CHRO evolved?

A Deloitte Strategist and Steward report groups the current CHRO roles and responsibilities into four major categories:

Workforce strategist: “Business strategy is increasingly a function of the workforce itself. Although CHROs continue to support and implement the overall direction, they now play a key role in steering and informing that direction – helping the CEO and other leaders craft strategies that make sense in light of global labor trends and available talent.”

Organizational performance conductor: “Companies today face an overwhelming number of choices, from boundary-less organizations, virtual teams, contingent workforces, telecommuting, and job sharing, to flexible hours, workforce diversity and more. CHROs help navigate all those options – creating value in the “white space” that other companies take for granted.”

HR service delivery owner: “Although CHROs are becoming increasingly strategic, they still need to deliver the goods of the day to day HR administration and operations…Today’s CHROs spend a lot less time overseeing their own systems, processes and transactions and a lot more time juggling a complex mix of in-house resources, employee self-service, and external vendors - doing their best to serve as the company’s HR market maker…”

Compliance and governance regulator: “CHROs have begun working directly with the board on workforce issues that are particularly critical or high risk; they also assist with a wide range of board related issues, from member selection and orientation to executive compensation and succession planning.”

To further validate the importance of the Chief Human Resource Officer’s evolving position in an organization, Dr. Karie Willyerd, SuccessFactors’ VP of Social Adoption, analyzed the financial performance of Fortune 500 companies with and without a CHRO as part of the C-Suite, or team of top senior executives.  Her key findings include the following:

1. Companies with both a higher percentage of goals aligned with corporate objectives and identified HR risks have better financial and market performance.

2. Companies that have a higher percentage of completed goals are more profitable, delivering higher EPS growth and better PE ratios than their industry peers.

Now that we know the lay of the land, it’s time to explore further.  What challenges can be expected for those in the growing and evolving role of CHRO?

Deloitte indicates that the following should be on the radar screen of all current and future CHROS:
  • Addressing talent gaps
  • Orchestrating learning, skills and career development
  • Providing executive coaching for senior leaders
  • Overseeing leadership development programs
  • Developing cross-functional teams
  • Overseeing an organization’s major change initiatives
  • Defining organizational culture and values
  • Defining diversity strategy programs
  • Overseeing and managing compensation and benefits
  • Formulating, executing, and managing HR policies / compliance
  • Managing Human Capital risks
  • Supporting the compensation committee of the Board 
“While all of the above are critical to the HR function, and the CHRO role, we find that understanding executive compensation’s legal constraints and nuances, and supporting the organization’s Board, is a key area of development for potential CHROs,” explains Michael Maciekowich, Astron Solutions’ National Director.  “If you are planning for a career path culminating in a CHRO role, take the time now to learn about executive compensation, rather than experiencing a ‘trial by fire’ years down the road.” 

All of this may seem overwhelming, or just downright demanding for anyone to add to an already full plate. So how can we make this expanded scope of responsibility more feasible? Sandy Ogg, a senior operating partner at Blackstone, and James Allen, a Senior Partner in Bain & Company’s London office, highlight some steps CEOs can take to change the behaviors of the leadership team…and how a CHRO can help:

-          - Be active in identifying between “doers” and “thinkers.”  “Each of these individuals plays an important organizational role when they are given responsibilities that tap into those strengths,” explains Jennifer Loftus, Astron Solutions’ National Director.  “For the greatest success with lessened stress, know the players on your team before assigning tasks and responsibilities.”

-          - Find and develop the right people with the right capabilities to solve issues, rather than trying to resolve everything yourself.  “Would that we could do everything ourselves!  Since that approach is neither practical nor advisable, teamwork and delegation are essential to success,” notes Jennifer.

Are you a CHRO? How has your role evolved in your organization? Share your story with Astron Solutions today and it could be a guest feature in Astronology!

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