Blogs and thought leaders are always discussing how HR is constantly transforming, and reminiscing on just how far HR has come. Just a couple months ago, DATIS released a blog titled “The Future of HR Positions” that highlighted the growth and potential of HR professionals, and how they’ve transitioned from administrative agents to influential members of boardroom decision making.
With all this talk about HR, it’s important to look at the individual positions within the department and how they’ve progressed over the years. For the sake of this article, we’ll focus on the Chief Human Resources Officer, and how their role continues to change and grow in significance.
What is a Chief Human Resources Officer?
A Chief Human Resources Officer, often referred to as a CHRO, acts as the leader and voice of their organization’s HR department. Reporting to the CEO, the CHRO articulates HR’s needs and plans to the management team, shareholders, and board of directors. According to the SHRM, “The Chief Human Resources Officer is responsible for developing and executing human resource strategy in support of the overall business plan.”
Executives that wish to hold this title are usually required to have at least 15 years of HR experience, with at least five years of executive HR experience. Preferably, CHROs have also acquired certifications such as the SHRM Senior Certified Professional, referred to as SHRM-SCP, or the Senior Professional in Human Resources, known as SPHR.
The responsibilities of the modern CHRO are extensive, covering all aspects of human resources from talent management to recruiting. While we’ll go into more about the current responsibilities later, it’s important to note that the CHRO plays a role in a variety of activities throughout the department, and is ultimately accountable for the department’s performance.
Where it Began
It’s famously noted that the concept of HR was ideated in 18th century Europe during the industrial revolution when Robert Owen, a successful factory owner and proclaimed founder of personnel management, realized the importance and benefits of a happy, satisfied workforce. With that said, the position of CHRO is not nearly as historic and, in contrast, is relatively new to the business world.
In fact, after an extensive search on the history of the chief human resource officer position, the first mention of the position I found was in an article in Harvard Business Review from 1985 written by James F. Bolt. So why did it take over 100 years for HR to have a seat at the big table and contribute to boardroom discussions? Fingers can be pointed towards organization’s lack of urgency when it came to growing and developing their HR departments.
True HR departments didn’t become popular until the late the 1970’s, when legislations like the Equal Pay Act (1963), Occupational Safety and Health Act (1970), and the Employee Retirement Income Security Act (1974) put pressure on organizations to form teams to comply with new regulations and handle workforce needs. Once HR departments began to become the standard, it took some time for CEO’s to understand the importance of HR’s insight when making strategic business decisions. Once this revelation occurred, the CHRO was born.
Today’s Chief Human Resources Officer
CHRO’s have come a long way since their position’s inception. For a long time, the HR leadership role was kept at bay, while CEOs, CFOs, COOs, CMOs, and other C-Suite executives talked strategy. Nowadays, the CHRO has a seat at the table, with 94% reporting directly to the CEO. In conjunction with their role growing in importance and significance, the responsibilities of the CHRO have also expanded.
Before, the CHRO was mainly responsible for functions such as managing executive succession plans, creating strategic recruiting and retention campaigns, and developing comprehensive compensations and benefit packages. But a recent report by CEB Global states that 71% of CHROs are spending more time on business issues, unrelated to HR or Talent. The report also states that 70% of CHROs are spending more time participating in business projects in a leadership capacity. This is likely due to the organizational need for executives to align HR and business objectives.
This move away from being a solely HR related position has been facilitated by the help of technology. Various digital tools and strategies have completely disrupted and revolutionized the way HR operated. HR and Payroll software solutions have automated many aspects of HR that used to take employees hours to complete. Processes such as collecting and monitoring employee credentials, approving timesheets, onboarding new hires, and many more can be completed within just a few clicks of a mouse.
These sophisticated systems have freed up enough time for CHROs to step outside their HR bubble and better coordinate with other executives and department heads. By contributing to executive level discussions, CHROs can share data points from their department to formulate organizational plans, strategies, campaigns, and goals. The more the CHRO plays a role in the C-Suite, the more their position will continue to grow.
What’s to Come
According to many analysts and experts, the CHRO is on the verge of greatness. According to Deloitte’s “Disrupting the CHRO: Following in the CFO’s footsteps” article, authors Cathy Benko, Trish Gorman, and Alexa Steinberg write, “Much as CFOs evolved from their money-counter roots to become the CEO’s strategic partner, CHROs are on the cusp of a transformation as they focus on an asset that is critical for corporate growth.” The article later states that “the next several years will likely bring the imperative for transformational change to the role of the CHRO.” Clearly, we the CHRO role has yet to realize it’s true potential, and that the upcoming years are critical to the position’s future.
One change that some are predicting, is a change in title. Quantum Workplace remarks in an infographic that the Chief Human Resources Officer will soon be the Chief People Officer, indicating that the term human resources is becoming outdated. The infographic also goes on to predict a future change in philosophy for today’s CHRO. While today’s CHRO is concerned with how employees can develop in their roles and impact the organization, the future CHRO will be focused on educating managers on how to get the most out of their team members.
As technology continues to develop and automate many of HRs internal processes, CHROs will be more inclined to venture off into more projects outside of their normal scope. Once CHROs cement themselves as permanent C-Suite executives, they’ll be able to further expand HR’s influence on organizational decision-making. Research shows that the CHRO has risen fast in a relatively short amount of time, and many predict that their rise is far from finished.