Technology and evolving employee expectations are redefining
how work is done — and how organizations think about talent:
Less hierarchy. More flexibility. Unconventional career paths.
Like everything else within the business world, the field of
human resources (HR) has changed dramatically over the
last several years. In advanced organizations, chief human
resource officers see digital disruption not as a difficult
challenge but as an opportunity: they are partnering with
business leaders to drive strategic initiatives and ensure
that HR complements the transformational agenda.
To provide some additional context for CEOs thinking about
the role HR should play in the organization, we highlight the
most important people trends we’re seeing in innovative
companies and what they mean for the profiles of HR leaders.
1. Make sure your HR leader knows the business
Interestingly, many CEOs believe the most effective CHROs come from
non-HR backgrounds. But among companies hiring HR leaders, Spencer
Stuart research found the number of CHROs with no HR experience has
increased by only one percentage point over the past five years, from 13
percent to 14 percent. At the same time, a majority of HR leaders (58 percent)
are gaining business experience outside of HR to increase their knowledge of
the company’s strategic priorities. One way to jumpstart an HR leader’s business
experience is to provide an opportunity to play point in a large M&A
transaction, in order to provide a real-time look at internal operations.
2. Partner with HR to drive strategy
The digital revolution has produced dramatic changes in the workplace:
There is less hierarchy, more people work remotely and millennials bring a
new mindset. In addition, companies in the old economy now find themselves
needing to infuse their organizations with new skill sets and talents.
These new workplace realities create different expectations, so
forward-thinking CEOs and CHROs stay abreast of evolving workplace
trends. One size no longer fits all, and savvy HR leaders offer a curated
experience that recognizes individual interests and skills.
While data is obviously important, innovative companies also stress the
importance of the “human touch” and help maintain authentic relationships.
Ensuring that employees feel properly acknowledged for their
aspirations and creativity boosts morale and helps maintain loyalty.
3. Ensure your HR department runs smoothly
Operational mastery doesn’t have the eye-catching immediacy of, say, digital
or analytical knowledge, but even the most innovative companies place a
high premium on strong operational expertise. The CHRO needs to be a
strategic leader, but other tactical and day-to-day responsibilities must run
fluidly, as well; to put it simply, the trains need to run on time. A knowledge
of HR technology, for instance, can reduce headcount and improve efficiency
in the long run.
4. Build the strength of your employment brand
All companies should realize they need to create an environment that
attracts strong talent, which entails building an employment brand that
employees can connect to. An engaging workplace leads to high morale and
increases retention, which helps maintain institutional knowledge and
means less money is spent on recruiting and training.
Creating an inventive total rewards platform is another way companies
enhance their brand: In addition to competitive salary (of course), innovative
companies offer unique benefits, including incorporating gamification
elements into performance plans and peer-to-peer rewards.
5. Leverage HR data to support strategy
Big Data has impacted every aspect of business, and innovative companies
want their HR leaders to use this mountain of information to inform strategic
goals and key decisions. Indeed, this is a booming trend: according to a
recent Deloitte human capital study, 70 percent of organizations believe
people analytics are a high priority. Data can provide insight into employee
churn, help companies quantifiably analyze their own cultures and find the
best talent. So, companies can use workforce analytics to determine the type
of talent they need, which schools are producing it and where the desired
skill sets and talent can be found.
6. Seek out a CHRO who offers candid feedback
CEOs look to trusted CHROs to provide candid, truthful insight into strategic
matters. Because they have contact with everyone from top leaders,
middle management and front line employees, CHROs learn a great deal
about dynamics throughout the company. A key responsibility for the CHRO
is ensuring the company is developing the next generation of leadership.
But one area that can be challenging even for the most experienced CHROs
is CEO succession planning, particularly as the transition nears. The best
CHROs gain the trust of the board and the CEO, who understand the stakes
of CEO succession planning,
and navigate the sometimes-challenging
dynamics to help the organization stay on track.
It can also be difficult to balance the communication between the CEO, board,
shareholders and employees, but a valuable CHRO manages these relationships
and provides trusted insight. It’s important, though, that CEOs are open
and receptive to honest, appropriately delivered feedback.
CEOs at HR-forward companies are looking for CHROs who create HR functions
that anticipate and evolve along with the ever-changing business
world. Top CEOs have data-fluent, trustworthy CHROs who engage with
strategy and culture, create a strong brand, navigate the corporate hierarchy
and run a smooth operation. By partnering with a creative HR leader, CEOs
will find human resources to be a valuable asset in developing and implementing
strategies for managing change.
*Spencer Stuart Fortune 100 Research