CHROs Reveal Serious Gap In HR Talent

May 23, 2017 – Executive recruiters are in hot pursuit of chief human resource officers (CHRO) and other senior level HR leaders across the nation. The best HR chiefs are seen as strategic advisors to the C-suite, and the ones most in demand are those who are sounding boards for CEOs.

Why such pent-up demand for top flight HR experts? According to executive recruiters, corporate leaders are hiring more HR leaders who are like-minded, sophisticated, proactive, and strategic-minded, with strong business savvy to drive their people capabilities like they would a P&L. CEOs, in particular, want their HR leaders to proactively recommend a host of forward-thinking initiatives that will provide a competitive advantage.

A new Korn Ferry survey of CHROs shows that as the HR function becomes more strategic and high-profile, HR professionals must do even more when it comes to delivering business insights and achieving results.

When asked which skills are most lacking when searching for HR talent for their own teams, the top answer that respondents gave was business acumen (41 percent), followed by the ability to turn strategy into action (28 percent). Intellectual horsepower and analytical skills followed with 10 and seven percent, respectively.

HR Roles Gaining Complexity

According to the survey, 29 percent of respondents said that competitive pressure on the business is the top factor for the increasing complexity of the HR role compared to five years ago. Gaps in existing workforce/ shortage of skilled external talent (20 percent) and increased breadth of responsibility (12 percent) were also significant.

“Disruptors such as digitization and globalization are creating an environment of constant organizational change,” said Joseph McCabe, vice chairman in Korn Ferry’s global human resources center of expertise. “HR leaders must understand the business challenges that occur as a result of these disruptions, including the impact on the business strategy, and be able to quickly adapt and act.”

Chief Talent Officers Seen As Indispensable

CHROs are clearly in demand, but chief talent officers are just as valuable. Top talent officers may not always get the wider recognition they deserve, but as trusted advisors to executives at the top of the C-suite, they have become all but indispensable. Those who hold the position tend to understand their organizations inside-out, from a strategic overview right down to the individuals who carry out the mission. And though their views might occasionally make some leaders uneasy, few would want to do without them ….. Here’s some further reading from Hunt Scanlon Media.

Chief Talent Officer Delivers Pivotal Advice to the C-Suite
“I see the chief talent officer as being the person providing some of the most intimate business counsel to the CEO,” said Joanne Rencher, chief business and talent officer for Girl Scouts of the USA. “We see the business through such a different lens.

More than half of respondents (52 percent) said a tolerance for ambiguity, defined as the ability to work in conditions of uncertainty and change, is the most critical competency for a CHRO. Confidence and the ability to make bold yet informed decisions (20 percent) came next. And the ability to sustain analytical thinking and motivate others (11 percent) was the third highest response.

Nearly half (44 percent) of those surveyed said that creating an agile workforce to meet evolving demands is the top talent challenge organizations face. This was followed by building a strong leadership pipeline (20 percent) and enabling leaders in organizations to create real value and drive innovation (13 percent).

Creating an Engaged Culture

The top way to meet long term, bottom-line goals, according to the survey, is to create a culture where people are most engaged (59 percent). Leadership development (30 percent) followed next. One percent of respondents cited altering compensation and benefits packages as the best route to long-term success.

“HR leaders need to create a culture of allowing people to take chances, to be agile and adaptable to meet challenges of today and ‪tomorrow,” said Mr. McCabe, who specializes in the recruitment of senior executives in the human resources function.

The survey showed that HR leaders tend to have little patience for being unable to align talent strategy with their organization’s goals. When asked why a CHRO would voluntarily leave the company, the largest percentage of respondents (36 percent) cited the inability to directly connect HR efforts to tangible business outcomes. This was followed closely by the inability to align the organization around a change agenda that the CHRO was hired to drive (35 percent). Only three percent of respondents cited compensation.

When asked why a CHRO would get fired, inability to work well with or lead others (37 percent) was cited as the biggest reason, though not linking tangible business outcomes to HR efforts (34 percent) came in a close second. Inability to align the organization around a change agenda that the CHRO was hired to drive (21 percent) came next.

Taking Care of Business

“Today’s CHROs are judged both on what they do and how they get things done,” said Mr. McCabe. “While it’s critical that HR must act quickly to adapt to changing business strategy, it’s also important to take the time to align their team and other key leaders to foster engagement and a shared vision. It’s no surprise that CHROs reported aligning talent with business strategy (34 percent) and employee engagement and retention (24 percent) as the top things that keeps them up at night.”

The majority of respondents admitted that they have failed to make use of all available tools to align business and talent strategies. Two thirds (64 percent) said they lack strong HR data analytics integrated into their business planning process. When asked, “To what extent do you agree with the following statement?: “We have a strong HR data analytics function that is integrated into our business planning process,” 43 percent said they disagree, 21 percent strongly disagreed, and 18 percent agreed. Only one percent of respondents strongly agreed.

The study found that of all other members of the C-suite, besides the CEO, CHROs work most closely with the CFO (35 percent), followed by heads of lines of business (34 percent) and the COO (28 percent). Finances are also top of mind for boards of directors, as respondents cited executive compensation (40 percent) as the top board area of focus for HR, with succession planning and talent issues (33 percent) coming in second, followed by attracting and retaining talent to meet evolving business needs (13 percent).

“More than ever, CHROs play key roles at the highest levels within organization, leading critical talent strategies that are core to executing on crucial business priorities,” Mr. McCabe said.

HR Recruiters’ Perspectives

“CHRO roles are challenging in a way that is vastly differently from even five years ago,” said Shelli Herman, president of executive search firm Shelli Herman and Associates, a specialist in the field. “It’s not enough to just be good at traditional HR functions; you have to be good at the business side of things, too.” That seems to be the single most common denominator that headhunters acknowledge in recruiting for this key functional position.

Ms. Herman said CHRO search work has changed dramatically over the last five years. “CHRO leaders now get involved with every aspect of how an organization functions, often engaging in decisions around business practices that may have little to do with traditional human resources practice areas, but have everything to do with people,” she said. HR leaders, for example, must have insight and expertise around succession planning and talent management planning.

“Today, it is essential that a CHRO understands this work at the most basic and ‘boots on the ground’ level,” she said. That allows the best CHRO talent to take on bigger, broader and more strategic issues like culture shaping and change management, two areas once relegated to a search firm or management consultancy.”

Present-day CHROs are also bringing more skills to the table. “They bring a much stronger and acute business acumen,” said Tom Christopher, co-founder and CEO of The Christopher Group. “For years, CHRO directors have claimed to be business partners. Honestly, I think they’ve struggled in that area. But today we’re seeing a new generation, a new breed of business leaders, who really are business partners first and HR professionals second.”

The CHRO role, itself, has also changed in the last five to 10 years and that is expected to continue, Mr. Christopher said. “It’s clearly going through another evolution,” he said. “Today, there’s a new world order that centers around servant leadership. That is probably best displayed in the evolving role of the CHRO. Servant leadership is the new wave for the vast and most progressive CHRO officers that we work with.”

Contributed by Scott A. Scanlon, Editor-in-Chief and Stephen Sawicki, Managing Editor – Hunt Scanlon Media