State of the CHRO 2015 – The CEOs Perspectives
CHROs need to contribute to the future of the organization and be a part of the business progression along with strategically partnering with the CEO
For our June 2015 issue, we did a research on the role of CHRO in businesses today, which showed us that the need, demand and importance of this role is critical in organizations. CEOs of various business organizations unanimously point out that CHROs are needed to lead organizational change and transformation. However, it was also observed that the gap between CEOs’ expectations and the capabilities that CHROs have is widening. The survey distinctly demonstrated that 8 out of 10 CHROs have studied HR and 6 out of 10 have experience only in HR roles. Moreover, CHROs today, struggle in bringing innovation in talent attraction and retention, while maintaining their HR operations efficient and compliant.
Let us look at what the CEOs of the companies have to say?
CHRO function will be double and paradoxical
Nicholas Jachiet, Chairman and Global CEO of Egis Engineering Consultant
The market today is constantly evolving and the CHRO is in charge of the most difficult aspects of this ongoing change such as employment and skills. At Egis, the CHRO has been managing this process very efficiently and we truly see his role bring high proposition. As a CEO, my job is to keep close contact with all the roles, but at times I interact more with my CHRO than my CFO.
However, there are three major competencies that CHROs must develop. Firstly, they should have the capacity to lead the change. They should be able to help our people to adapt efficiently to the changing market environment. Secondly, they must be focused on business and keep up with the emerging market trends. Paying attention to the trends of evolution that are taking place at a fast pace is an absolute must for CHROs. Lastly, he/she should have a sharp sense of the corporate values. The CHRO requires capacity to contribute efficiently to the commitment of our people.
The CHRO function will be double and paradoxical. CHROs will have to portray a real ability to anticipate the needs regarding all aspects of human resources in relation to the trends of the market and how it can contribute to business growth. Further, as the evolutions are often discontinuous, the CHRO will also require a strong capacity to react and to efficiently face short-term requirements such as staffing, mobility etc.
Caliber of talent is important for CEO
Arvind Pandit, Co-founder and CEO of VIA HRx
All aspiring CHROs must move to a business role. CEOs have very clear expectations from their CHROs—they must be business partners who will help them propel the business from where it is today to what they foresee it in the future. HR needs to have a cross-functional view of the problems business faces and find solutions that will deliver results.
Caliber of talent is important to create the right peer group and for the CEO to see the CHRO as an equal. Further, my take is that 1 in 7 or may be even 1 in 10 is actually ready to fulfill the expectations of business. So, the size of a quality talent pool available is very small. There is also a flipside to this problem–CEOs actually do not fully acknowledge the fact that the HR function is not an HR person’s job alone; the HR person’s job is to facilitate HR processes, but the real owners of HR need to be the business leaders, including the CEO.
My recommendation to all aspiring CHROs is to move to a business role. Plan it (especially, within your company it will be a lot easier) and make it happen. That is actually the only way to get a cross-functional view of your role.
For the younger generation, I will recommend spending more time on generalist roles, which can contribute in building strategic and analytical thinking as those skills need to be nurtured over time. The other more technical aspects of HR can be learnt later as the role evolves and demands.
The role of HR has to gradually shift
B Santhanam, President and MD, Flat Glass – South Asia, Malaysia & Egypt - Saint-Gobain
In a world characterized by Volatility, Uncertainty, Complexity and Ambiguity (VUCA) the role of Human Resources has to gradually shift
Therefore, the CHRO must connect the emerging talent world trends with the changing business context. She must anticipate the long term impact of trends in leadership styles, generational shifts in aspirations and expectations, changing cultural norms of diversity and inclusion and society’s expectation on the role of business. She must be in a position to suggest options, persuade and influence business leadership to fine-tune structure, systems, staffing and skilling, keeping in mind the dynamic nature of the talent world. She must possess a clear vision of HR trends, understand its impact on business, bring clarity of thoughts on key issues and be agile in a constantly changing world.
Analyzing Big Data will be a core competency
Smita Jatia, Managing Director at Hardcastle Restaurants
HR needs to devise efficient methodologies to identify talented individuals, but pinpoint those with the right skill sets. Human Resource functions have steadily grown in influence and relevance over the past few decades. The HR Department is no longer relegated to a supportive role within the organization and instead participates in and contributes actively to organization functions and business strategy.
As a result, it is no longer sufficient for HR chiefs to channel their operations through the COO or the CFO, as used to be the case. Instead, organizations such as ours have incorporated a senior Human Resources role on par with other senior executive functions, who reports directly to the CEO.
With the role of the CHRO becoming increasingly crucial to an organization’s success, the competencies required of them are also evolving. In addition to possessing good business acumen and executive capabilities, a CHRO needs to be a charismatic leader with great inter-personal and communication skills who inspires confidence and trust among the employees and is capable of motivating them to perform. Moreover, since the CHRO is often engaged at the Board level, prior Board experience is usually very helpful. Executive presence and strong platform skills can hence become critical to connect with Board members.
As more players enter the industry, demand for competent professionals keeps growing. HR needs to be able to quickly and efficiently comb applicant pools to identify those who will be the right fit for various roles within the organization. Further, CHROs will also need to incorporate in their core competency the ability to analyze and draw actionable conclusions from Big Data.
The majority of India’s population is younger than 30, an increasing number of which is getting access to education and professional degrees to compete for employment. Presented with ever larger applicant pools, it becomes essential for HR to devise efficient methodologies to not only identify and court talented individuals, but specifically pinpoint those whose skill sets match with the organization’s requirement. Today organizations in India are increasingly coming to value the role of the CHRO and this is a great progress we are seeing in India Inc.
CHROs will be owners of Human Capital
Dinesh Mirchandani, Managing Partner of Boyden India
The CHRO role has to get more specialized in the future. Aspiration always lags reality. This stands true even when it comes to CHRO hiring. In the last decade, we have seen an increased focus on CHRO hiring as it was seen to be strategic and contributing to the organization’s future as a whole and not just focused on short-term goals.
While CEOs expect the CHROs to have deep insight and knowledge of how the business functions, the reality is far from the truth. Not many candidates make it to the level of the CHRO as they do not have the exposure, acumen, or the experience. There is a real need for CHROs to move out of their comfort zones and build out their broader strategic and operational business capabilities. In the last 15 years I had thought that many more CHROs would have moved to the corner cabin as the level of impact that this function brings to business is tremendous but that has simply not happened. When a CEO has a good CHRO, the tendency is to keep him or her in that role rather than to rotate them around. CHROs also have not pushed back enough on their CEOs demanding this change either as their plates have been quite full.
Today, HR is redefining itself. CHROs will focus on being the owner of Human Capital. They will also carry a specialization like OD, talent management, IR, C&B along with a country-specific responsibility. For example, if I’m looking for a CHRO for India, then I would make sure that the person brings a specific specialization, say on IR, and head IR for the region at the same time. A matrix organization is also likely to emerge with local leaders having a regional responsibility driven by the area of expertise they bring to the table. Salary-wise HR has outpaced most functions in terms of growth in the last five years. I would say it is now easily at par with Finance perhaps 10-15 per cent lower or higher. My underlying message for HR professionals would be to ‘Stretch and learn, for all roles but more so for HR’.
In India, the mission critical jobs in HR are likely to be in the manufacturing industry. Many manufacturing companies (both MNCs and Indian) are looking at HR leadership positions. We also see a huge increase of interest in IR skills, especially people who understand the strategic side of IR. These trends are probably derived from the ‘Make in India’ campaign, which is yet to bear fruit.
People connect is a crucial competency for CHRO
Anurag Goel, Co-founder and CEO of CACTUS Communications
It’s not necessary for an HR person to have HR background, but should have the skillset. Companies that are progressive and people intensive are now investing a lot in the HR function. Today, HR is a lot less about processes and compliance and more about understanding business and strategically partnering with the CEO. However, the value of the CHRO differs from organization to organization; if companies have understood the importance of HR and people, HR becomes integral to the growth of business. However, if an organization has not understood the value people bring to organizational success, HR could still be delegated as a support function.
People connect is a crucial competency for all CHROs. Today the dynamics of the workforce is changing and Gen Y forms a major chunk of the workforce. CHROs have to connect with this younger generation be intuitive in this regard. CHROs should also develop the ability to lead change and should be able understand and break down cultural barriers. Lastly, they have to develop business acumen. S/he has to understand business and take measures to increase organizational growth and profitability and foresee the challenges that the organization can face few years down the line. For all of these, it’s important that CHROs do not just have an HR perspective but also understand business.
The HR function is not just about transactional work anymore. The role of the CHRO is changing from a process-based role to a strategy-based role.
Get the full coverage of the State of the CHRO 2015 through the links below:
Summary: State of the CHRO India 2015
1st Annual Study on State of the CHRO India
Where do CHROs stand today? - Infographic
State of the CHRO 2015 – Service Providers' Perspectives