What Is a CHRO? And Why Does Your Organization Need One ASAP
"Businesses don't create value; people do," explain strategic advisors Ram Charan, Dominic Barton, and Dennis Carey. "It's time for HR to make the same leap that the finance function has made in recent decades and become a true partner to the CEO."
Why do Charan & co say this?
They each have significant corporate and strategic experience and appreciate the complexities and challenges of modern organizations. As HR's role is evolving from setting the terms of employment and overseeing people administration to a more forward-looking and strategic perspective, they understand the power of a strong people function led by an effective Chief Human Resources Officer (CHRO).
CHROs are grounded in their unique organizational position, i.e., C-Suite leaders and enablers of human capital and talent as fundamental drivers of business outcomes.
In this article, we'll look at:
- What is a CHRO.
- What they do.
- Why they're essential for your organization in an ever-changing workplace full of opportunities and complex threats.
🧍What is a CHRO?
An organization's Chief Human Resources Officer (CHRO)—sometimes referred to as a Chief People Officer—is responsible for the strategy, management, oversight, and outcomes of the organization's people.
Their scope of activity includes:
- Leading the people function, i.e., HR.
- Talent development and succession planning.
- Training and development programs and systems.
- Salary compensation structures.
- Stewardship of company culture.
- Owning your company's people strategy.
Closely related to these is HR technology—the systems, infrastructure, and automation of HR operations—that CHROs oversee.
CHROs focus on bringing out the best in people by setting the conditions for their success and guiding them toward strong personal and business outcomes.
And the benefits that CHROs bring to organizations are increasingly being recognized—they are proving invaluable in the face of:
- Increased competition for employee talent.
- Rapid development and adoption of HR software and systems.
- Increased government compliance requirements.
🦸 The 9 strategic roles of CHROs
So, how do CHROs make an impact on organizations? Here are nine strategic roles that they fill.
1. Strategic advisor
CHROs contribute to the organizational strategy through:
- A deep understanding of the capabilities and potential of an organization's people, knowing how to align them with business priorities.
- A human-centric perspective during periods of change and disruption, understanding the key drivers that sustain organizations through their people.
- Facilitating organizational design, knowing how to prioritize the elements that matter most from a human-led perspective toward meeting business goals.
Through these and other perspectives, CHROs contribute to organizations' strategic direction and positioning in more prominent ways than ever before.
And CEOs are actively encouraging CHROs to play their part—70% of CEOs expect their CHRO to be a key player in corporate strategy, according to Gartner.
2. People troubleshooter
CHROs are adept at identifying systemic issues in workforce practices and management. They strive to recognize and address problems early before they become more serious.
Workforce cultural issues, when left unchecked, can be harmful to organizations. The recent experience at Uber is a case in point: a non-collaborative, "dog eat dog" culture in which favoritism and a lack of accountability took hold in an environment where harassment, aggression, and misconduct threatened the company's very existence.
By recognizing signs of cultural deterioration early, CHROs address and mitigate issues like those experienced at Uber.
They do this by establishing:
- A sufficient number of HR representatives who are well-trained to support and empower people.
- Open communication channels to encourage feedback that flows freely between HR and others.
- A clear set of core organizational values to help to reinforce positive cultural traits and make it easier to identify behavioral deficiencies.
3. Talent architect
Talent management is a widely used term and captures several dimensions, including:
- workforce planning;
- employee engagement;
- learning and development (L&D);
- performance management;
- succession planning;
Overseeing such a complex set of activities requires strong leadership and clarity on attracting and retaining talent and providing a competitive edge—CHROs are well-equipped to do this.
CHROs guide the talent strategy at organizations by shifting the focus away from people operations and processes towards a framework that highlights the potential of an organization's people. As a result, they promote better outcomes for people and organizations alike.
4. Organizational culture advocate
"Organizational cultures are far more plastic than we might wish: given the heat of necessity (and crisis), they can change for the better or the worse," explains Meghan M. Biro, a leading author and brand strategist.
HR has a fundamental role to play when organizations respond to changing circumstances, as was highlighted during the pandemic-related disruptions of 2020 and 2021.
HR was responsible for boosting engagement and morale during a period of isolation, breaks to routine, and (in some cases) radical changes to work practices.
CHROs lead HR's efforts in these areas by establishing and overseeing the policies and systems that support people during their times of need, such as:
- caregiving and parental leave policies;
- technology assistance;
- guidelines for emergency assistance.
CHROs also support organizations by creating a culture of learning to cultivate a growth mindset and foster productivity and innovation.
CHROs provide the overall strategy to guide HR teams and managers in their day-to-day interactions and during times of need. They are instrumental in empowering people to bring their best selves to work, whatever the circumstances.
5. Change management facilitator
During times of rapid change, organizations need to respond quickly and effectively to stay competitive. Most organizations, however, do not manage change well—only around one-third of organizational change initiatives succeed, according to Gartner.
CHROs make a difference by spearheading HR-led change management programs that focus on the employee experience.
People's engagement, motivation, and well-being during change are paramount for the success of organizational change initiatives.
CHROs lead HR during times of change by:
- Communicate the change, why it's occurring, and its benefits.
- Promoting trust between management and employees.
- Identifying change-related risks for people's careers, well-being, and the organization.
- Monitoring and addressing employee satisfaction with the change.
- Supporting people with training and skills development.
6. Diversity champion
CHROs play a prominent role in championing diversity, equity, and inclusion (DEI) in organizations.
As DEI is becoming more central to how organizations function, CHROs provide the leadership that drives a more inclusive, engaging, and meaningful work culture.
CHROs ensure that DEI permeates the whole employee journey, from recruiting and talent acquisition, onboarding, and compensation structures, to the complete employee experience.
Through their visibility over a range of functions and their positions as senior leaders, CHROs provide the vision that drives DEI efforts through the sometimes complex and nuanced considerations of DEI.
7. High-performance advocate
A key challenge for HR, while supporting people with a strong organizational culture, is to promote and maintain an environment of high performance.
A high-performance culture keeps people motivated, engaged, and productive through various circumstances and CHROs are instrumental in this effort.
McKinsey describes six ways to promote a high-performing culture:
- Define behaviors that unlock business performance—communicate productive behaviors clearly, so they're easy to understand.
- Uncover root-cause mindsets and reframe them—help to re-position the beliefs and values that underpin how people approach their work.
- Role-model and reinforce the desired organizational culture—highlight the behaviors and mindsets that deliver the most business value.
- Create a coherent employee experience—articulate, role-model, and establish the skills and processes required for a positive workplace culture to flourish.
- Provide opportunities for overcoming personal barriers—encourage individuals to make conscious choices about what drives positive change.
- Lead the journey—Take an employee-centric view and act as a role model in a high-performance culture.
By advocating an approach that features these elements, CHROs set the conditions for high performance to flourish in their organizations.
And it's worth the effort—McKinsey's research shows that organizations with a high-performing culture generate 3x stronger shareholder returns than those that don't.
8. Data-driven strategic leader
Decision-making in modern organizations is driven by data more than ever before. Senior leaders today rely on curated, relevant, and meaningful data to help their organizations succeed.
The people functions of modern organizations are integral to this effort as HR increasingly relies on data to produce better outcomes.
"Understanding data that can help support areas such as recruitment, retention, workforce planning, and training is crucial for organizations," explains David Green, a respected commentator on HR analytics.
As senior leaders, CHROs leverage data to guide their decisions and shape their strategic thinking. Taking full advantage of data is an emerging trend in organizations.
In 2015, a survey of executives at large organizations found that 80% of respondents agreed that their company could not succeed without an assertive, data-driven CHRO.
And this trend has strengthened into the 2020s as CHROs rely on data-based evidence to form conviction in their stances on talent and other issues.
"We want to enable data-driven decision-making to create a distinctive customer and employee experience. Hence data is important for us at ING and is a crucial part of our larger business strategy", says Ruth McGill, CHRO of ING Group.
9. Open communication and continuous feedback advocate
"We all need people who give us feedback. That's how we improve," Bill Gates famously said.
Good communication and feedback promote loyalty and productivity in organizations and are essential elements of HR's remit.
- Capture employees' wants and needs.
- Identify skills gaps.
- Highlight areas that need attention and portray a reliable picture of people operations.
There are several tools that CHROs can use in employee feedback systems, including:
A 360-degree-feedback approach, in particular, is a powerful way to capture feedback from multiple perspectives. It's also less subjective, more development-focused, and more candid than traditional one-way feedback. It offers an unbiased, comprehensive, and holistic view of people's performance.
When combined with regular, real-time feedback, 360-degree feedback generates real-time insights and encourages frequent engagement that can significantly impact people's performance.
CHROs play a crucial role in modern performance management's multi-perspective, continuous feedback approach.
➡️ Discover ten proven steps to building a continuous performance feedback culture that works.
⌛ Why your company needs a CHRO ASAP!
Still not convinced about the benefits of having a CHRO at your organization?
- The recent pandemic has accelerated the shift to remote and hybrid work and the use of technology to communicate, share data, and boost productivity. McKinsey estimates that 20% of the workforce can now work remotely, three to five days a week, as effectively as they could if working from an office.
- There's an increasing need to promote DEI in the workplace.
"The work of promoting diversity, equity, and inclusion must be ongoing and far-reaching," writes Ashley Stahl, an experienced career coach. "[I]n assessing the data and listening carefully to individuals of diverse identities, it is clear that there is much more work to be done."
- Employee well-being underpins job satisfaction, productivity, and retention. It needs particular attention in the face of ongoing logistical and cultural changes in the workplace.
- There's a need to improve performance management and measurement. CHROs will lead performance management toward more real-time, multi-faceted feedback systems, leveraging technology to garner better insights.
- Some industries have seen unprecedented change in recent times, so the agility to respond to changing circumstances—and to thrive—is paramount for organizational success.
A strong, purpose-driven, and focused HR function is central to all of these developments. A CHRO's purpose is to ensure that this is the case.
The CHRO is as vital to your organization's success as traditionally dominant C-Suite roles are.
"CEOs must redefine and elevate the CHRO role," argue Charan, Barton, and Carey, "[t]hey should spell out their expectations in a new written contract … the CHRO can contribute to the organization just as powerfully as the CFO can."
Can you afford not to have a CHRO in your organization today?
➡️ Check out our comprehensive resource on onboarding your new CHRO and uncover the best practices that your CHRO can leverage to build a high-performing organization.
🌡️ 4 Metrics every CHRO should track
Your CHRO will use metrics and indicators to monitor your people's progress in the areas that matter.
- Are more productive and enthusiastic.
- Provide better customer service.
- Are more loyal.
One of your CHRO's main objectives will be to motivate your people and keep them fully engaged.
Keeping your people engaged isn't always easy, as it draws on subtleties of communication and human behavior.
But there are helpful employee engagement techniques that can help. Also, an essential part of any engagement strategy is monitoring your people's engagement level over time.
So employee engagement surveys are indispensable, as they assess your people's engagement levels in real-time.
Your CHRO will gain insights into their sentiments, feelings, and perspectives about your organization.
Recent Gallup research shows that only 30% of US employees feel engaged at work. So your CHRO has to be laser-focused on using actionable metrics to help boost engagement.
➡️ See how to use employee engagement surveys to take the pulse of engagement at your organization.
Are your people satisfied at work?
Your CHRO will want to know the answer to this question, and a helpful way to assess this is by using job satisfaction surveys.
Through job satisfaction surveys, your CHRO can gather feedback on your people's satisfaction with:
- their roles, organization;
- compensation arrangements;
- whether they feel valued and appreciated at work.
Insights into these areas can make a real difference in addressing your people's motivations and connections with your organization.
➡️ Get direct feedback from your people on how satisfied they are at work using job satisfaction surveys.
When your people's needs aren't fully met, i.e., their engagement, satisfaction, and well-being (amongst other factors) are below par, they become a "flight risk."
By monitoring employee attrition and turnover rates, your CHRO can assess the trends and levels of retention—and potential flight risk—at your organization.
CHROs support employee retention by:
- Monitoring if attrition is occurring in "waves," i.e., are there systemic issues at play in your organization, or are departures more isolated and based on individual circumstances?
- Looking for patterns in departures, e.g., if employees tend to leave after around a year, may indicate inadequacies in working conditions relative to what's available at competing firms.
- Gauging the sentiment of your people by using surveys or other tools to get their feedback.
- Promoting the growth and development of your people through training programs, career advancement opportunities, and knowledge sharing, amongst other approaches.
➡️ See how to boost employee retention through effective people development plans.
Your people's well-being underpins how they perform in their roles and how they feel about themselves.
HR leaders understand the importance of well-being.
A recent Future Workplace HR Sentiment survey found that over two-thirds of HR leaders consider employee well-being and mental health a top priority.
Your CHRO will be keenly interested in how to monitor and improve your people's well-being.
However, it can be challenging to monitor well-being, given its holistic nature.
Gauging engagement, satisfaction, and retention levels can help, as can tracking absenteeism and productivity and collecting employee feedback using surveys and other tools.
Using a variety of indicators, your CHRO will assess the well-being of your people. They gather insights on addressing shortfalls and improving well-being through carefully designed programs.
➡️ Check out these seven programs to improve and sustain your employees' well-being.
➡️ Enable your People Executives with Zavvy
At Zavvy, we understand the impact that a strong CHRO can make for your organization, and we know how to support them in their strategic priorities.
Our employee enablement platform has the tools, programs, and templates to facilitate your CHRO in bringing out the best in your people. These include:
- Tools for talent management, including, onboarding, L&D, and succession planning.
- Compelling 360 degree feedback and employee development software.
- Blueprints for a high-performance culture.
- and much more
Book a free 30-minute demo to see how to bring out the best in your people by enabling them with a strong people function led by a dynamic CHRO.