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The CHRO role is changing.
As the HR function continues its shift away from administrative execution of basic service delivery toward operating models better placed to meet the challenges facing today’s workforce, the CHRO mantle grows in scope, value, and impact.
CHROs must now become the strategic partners that their organizations need: able to marry complex external conditions, critical business and financial objectives, and the core needs of their people. Business acumen, data literacy, relationship building, resilience, and confidence become crucial capabilities that will set elite CHROs apart.
Today’s CHROs are still adjusting to these new responsibilities. Mercer’s 2023 ‘Voice of the CHRO’ study found that current CHROs cite greater depth in HR data analytics and insights (41%), non-HR topics e.g., finance or operations (40%), and how to work with the board (39%) as the top three areas they wish they had more knowledge of.
Developing these skills should therefore become a continual priority for directors and VPs across HR, L&D, and talent that aim to become CHROs (or other C-Suite level roles.)
1. HR data analytics and insights
Like every other function across the business, the rise of data analytics and data-driven technology has transformed HR.
“Today, versus five or ten years ago, we can now get access to the type of data we need because technology is much more varied than it was before,” says Jane Datta, former Chief Human Capital Officer, NASA.
The rise of functions such as people analytics and sophisticated employee listening teams allow organizations to be closer than ever to the people insights that can, and should, determine HR and business strategy.
At NASA, for example, Datta recalls the transformation of her function from limited employee surveys to data-driven decision-making. Take the return-to-office debate.
“We were able to tell our leadership that people didn’t care much where they were working, they just want to have a say,” says Datta. “Our huge flexible working decisions were impactful because they were backed by qualitative and quantitative data we pulled through technology like natural language processors.”
Tools that can embed people data in all shapes and sizes into business decision-making are evolving more quickly than ever.
The ability to understand such technology, and to read, process, and translate data insights into actions, must be a core development area for HR leaders.
Forging close relationships with HR data analysts and other data teams within the organization can help build an understanding of core competencies. Building these relationships is also important, as such teams should be vital partners to HR.
Dedicated training courses are also a pragmatic step at any level of competency. Eventually, HR leaders should aim to revolve meetings, strategy, and planning around data insights.
2. Finance and operations
CHROs have historically struggled to forge close relationships with other members of the C-Suite. CEOs, CFOs, and COOs worked closely on business strategy with HR taking an administrative backseat.
There has been significant progress in recent years. Coordination, capability planning, and collaboration between departments increasingly sit with HR leadership. But to develop this relationship even further, and build greater trust with finance and operations, HR leaders prioritize relationship-building with their fellow leaders.
“Building coalitions is an ideal skill to have,” explains Datta. “Finance, sales, marketing…it’s about building relationships outside of their normal environment.
HR’s understanding of what occurs in finance and operations is often limited to the snippets of information and updates on performance.
This, argues Datta, is an area where current HR Directors and VPs must work to develop their knowledge. “You have to understand enough about what is going on in these areas. It’s not enough to just see reports.”
3. How to work with the board
Developing a close relationship with the board is a tough task for HR. Many HR leaders wish to eventually move into a CEO or Board Director role, an area where they have long been underrepresented.
This requires similar skills to forging relationships with operations and finance. “You have to know the things that matter most to them to be able to bring them information or make suggestions," argues Datta. "It’s impossible to be a senior advisor if you don’t work in their world.”
HR leaders can develop this knowledge and understanding by approaching board members for mentorship or engaging in formal coaching relationships. Building a network of board members helps immerse HR in the world of corporate governance.
Often starting on a smaller scale can give HR Directors and VPs a window into the language, topics, and metrics that matter in boardroom dialogue. This has the added benefit of helping HR to demonstrate its ability to impact financial performance, creating greater buy-in for further investment and large-scale transformation initiatives.
There’s plenty for HR to work on in 2024, but ambitious HR Directors and VPs should not be afraid to take the time to invest in their development journey.
So, what skills and capabilities are you prioritizing this year?
