A recent article by the Harvard Business Review titled, People Before Strategy, discussed how CEOs should be working with the CHRO to elevate HR’s role as a high level strategist within the C-suite. In the article, research showed that CEOs consistently name human capital as their top challenge, yet the same CEOs rank HR as only being the eighth or ninth most important function. This discrepancy causes major business alignment issues within an organization.
So, why does the CEO see human capital as their biggest issue, but rank it so low on importance?
The CEO knows that their employees create and add value to the organization, and without them, an organization would not be able to offer services, products, or even exist. This is why hiring and retaining top talent is at the forefront of their mind. The reason the HR function is ranked so low on importance is because CEOs feel that CHROs are tied down with too many administrative tasks and don’t understand the business, as stated by the Harvard Business Review, which makes them seemingly less likely to provide strategic value.
Understanding the CHRO Role
The CHRO role is constantly evolving. Today, the CHRO must posses a strong financial and business background, while also understanding all of the core HR processes. This requires the CHRO to be strategic when making short and long-term goals, analytical when reviewing data, and bold enough to think outside of the box. The list of requirements for a CHRO goes on, and for that reason, the turnover ratio for CHROs in firms within the Fortune 100 was 39% over the past two years.
What Can We Do To Elevate HR?
- Identify the strengths in your c-suite
Each persona within the C-Suite has a specific role and set of skills they bring to the table. Finding out what those strengths are and using them to your advantage is vital to making holistic, strategic decisions.
- Outline the requirements of the CHRO, and also state what the CHRO is not required to do
By outlining both what is required and what is not required, the CHRO will be able to better prioritize and strategize, as it will make their never-ending to-do list easier to manage. This also allows the CHRO to focus on what is most important to the organization; thus, building a better workforce.
- Hold weekly meetings with the CEO, CFO, and CHRO
Weekly meetings with a small group of specialized individuals is a great way to discuss future endeavors as well as gain insight on current issues within an organization. By doing so, the team can identify problems early on, and strategize the best way to fix them.
- Invest in a holistic, HCM system
Your CHRO is busy, and certain administrative tasks that are occupying too much of their plate can be reduced dramatically with an HCM system. Workforce analytics can show data in a customizable, impactful format, so that your CHRO can spend less time gathering and understanding the data. Talent Management can provide an ease of mind for the CHRO with credential tracking, learning management, and goal/performance management. Plus, talent management solutions can save you money by ensuring your employees are properly credentialed, avoiding lawsuits and fees. Benefits administration safeguards your organization against lawsuits and fees as well, as it guarantees compliance with state and federal laws. A full HCM suite can take a lot off your CHRO’s plate, enabling them to be more strategic with the rest of the C-suite.
It is the CEO’s job to elevate the HR function and there are many ways it can be done. In our constantly changing work environment, the CHRO continues to play a vital role in the success of an organization. The turnover rate for CHROs are high, and with that comes significant amount of capital lost; therefore, it is time to build a better, bigger, and bolder CHRO and HR department.