Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
November 16, 2018

Changing Role of the Chief Human Resources Officer

This article was first published in HR Future magazine.

The CHRO has progressed from fighting for a seat at the table to playing a key role in the executive team.

The human resources profession has evolved in recent years and with it the role of the chief human resources officer. The CHRO has progressed from fighting for a seat at the table to playing a key role in the executive team. The CHRO is seen as a strategic partner to the 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.

The role of the CHRO is becoming increasingly complex and is continuously changing due to a wide range of factors, including the advent of technology, artificial intelligence, automation, the changing profile of the workforce, new ways of working, and the increased focus on talent. The profile of a CHRO has shifted from a traditional HR professional narrowly focused on his/her function to a well-rounded business leader who can contribute meaningfully in all areas of the business. Today’s CHRO is a culture carrier and change agent who is commercially astute, analytical and technologically savvy, who speaks truth to power and influences softly yet assertively. It is no surprise to find a CHRO with a combination of human resources functional experience and commercial operational experience.

The CHRO role is continuously changing, demanding different capabilities:

1. Strategic mindset and business acumen

The CHRO is expected to be discerning, future-orientated, open-minded, commercially judicious and able to make evidence-based decisions. She/he is expected to develop robust people plans aligned to the business strategy. A people plan cannot merely serve internal HR functional requirements, it must demonstrate impact to the business.

2. Change and transformation management

The CHRO plays a leading role in defining and adapting corporate strategies, structures, procedures and technologies to handle changes in external conditions and the business environment. The people side of change management is often the most important element above the technical tasks necessary to enact change. When the people side of change is poorly managed, change often fails or doesn’t achieve desirable results. Driving change management and transformation requires an organisation to embrace learning agility and innovation as a culture. The CHRO is often expected to embody this agility and be the catalyst for change and transformation.

3. Mastery of executive compensation

Issues of pay equality continue to gain prominence in the market and CHROs must play a key role in designing competitive, equitable compensation and incentive structures to attract and retain key talent. The role of the CHRO is to continuously test internal pay structures against the market and changing legislation; where potential gaps and risks are identified, the CHRO must develop risk mitigation plans.

4. Clear understanding of board governance

The remuneration/human capital committees are increasingly scrutinising executive compensation, examining linkages of talent and performance, focusing on CEO succession and the broad talent agenda. The CHRO role can add value to the board by bringing expertise in compensation, succession, talent, and the people implications of mergers and acquisitions.

5. External focus

Today’s CHRO has to have a good sense of the external industry competitive landscape. She/he can keep abreast by playing an active role in relevant industry bodies. Talent is becoming increasingly mobile, which makes it all the more important for the CHRO to have a global mindset.

6. Shape culture

The CHRO has a key role in defining and co-creating the organisational culture with the executive leadership team. A company’s organisational culture can make or break the most insightful strategy. The executive leadership team and the CHRO have a shared responsibility in creating and driving a culture that is aligned with the business strategy.

7. Committed to diversity and inclusion

In order for diversity and inclusion to be successful, it has to be a top-to-bottom business imperative that is embedded in all aspects of the organisation. Diversity and inclusion cannot be an HR-led initiative but rather it should be CEO-led in partnership with the CHRO. The CHRO plays an important role in articulating the business case for diversity alongside the CEO.

8. Leadership gravitas

The CHRO must possess referent power underpinned by competence and an undisputed delivery track record. Referent power is acquired through strong interpersonal relationship skills, the ability to influence others, and being respected and admired. This type of power is particularly important in a CHRO, since it is built on collaboration and influence rather than command and control.

9. Balance agendas of high-level stakeholders

The CHRO role serves multiple high-level stakeholders such as the CEO, the board, shareholders and employees who often have competing demands. She/he must effortlessly navigate and balance the various demands through effective communication, seeking alignment and managing expectations.

10. Visible, value-added partner

The CHRO must be seen everywhere within the organisation. She/he must be in touch with the pulse of the organisation at all times to make unpleasant surprises less likely to happen.

11. Courageous

Today’s CHRO must have the ability to assess risk, to demonstrate independent thinking and speak truth to power, having the courage to say “No,” if necessary.

In order to keep up with the changing demands of the world of work, CHROs and aspiring CHROs need to be intellectually curious and have a desire to learn. They must keep abreast of developments, embrace technology, adopt a data-driven approach, obtain business experience, develop a strong network, keep growing, have a business mentor, a coach, and seize opportunities to participate in a wide range of business projects. Today’s CHROs are required to do a job that would have been unrecognisable a decade ago. There is every reason to believe that the job will continue to evolve rapidly over the next few years.

Julia Modise is a consultant in Spencer Stuart’s Industrial and Human Resources practices, based in Johannesburg. Julia is a seasoned human resources leader, with extensive experience in the global industrial sector and in the South African retail, property, media and entertainment sectors. Reach her via email and follow her on LinkedIn.