Role of a CHRO – Why Your Company Needs One

If the late 20th century saw the rise of CFOs, then the 21st century is the playground for the CHROs where they get to be the main striker in a corporate field. Today, when human capital has become one of the biggest conundrums in an organization’s growth, and HR functions can seal that problem, CHROs will have to turn over a new leaf. The HR department in your organization should move up the ladder. And who can make this happen? The CEO of a company. If you are the CEO of a company, like how you elevated the role of a CFO decades ago, you can bring about the same transformation in the role of a CHRO today by setting clear expectations and results.

Role of a CHRO: Ought to do

Your CHRO is here to create value for your organization and as the core of every successful business is people, who best but the CHRO to better understand people. The Harvard Business Review article ‘People Before Strategy: A New Role for the CHRO’ by Ram Charan, Dominic Barton and Dennis Carey highlights three crucial roles and responsibilities of a CHRO that will be a key value-add to any business.

Predict outcomes: How many times has your organization failed to assess the right candidate for the right role during the time of hiring? Lost your count? With the success of an organization tightly bound around the type of employees they hire, it is crucial for any organization to hire the best fit. This is where the role of a CHRO is crucial as they have insights on the business requirements and also the knowledge on people skills to help determine the best fit. If ever there is a knowledge gap between the leader and the job requirements, then the repercussions will not only be on the leader but the reporting manager, the entire team, the entire process and the deliverables. All these collectively will thereby lead to a negative impact on the overall business growth.

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Identify issues: When an organization puts together their annual report and there is a year-over-year decrease in growth, what do you do as an organization? Try to analyze the inadequacy in the process and the misses? This is where the role of a CHRO comes in as he can sit with the CEO and CFO and assess where the company failed to hit. Most of the time it is people-related problems. This being his jurisdiction, the CHRO can determine whether the slip is made by the leader and whether there is any gap between the leader’s skills and the job requirements which could have led to bad judgment by the leader. Aside from assessing faulty leadership judgment, the CHRO can also look into the social system of the organization and identify whether process roadblocks are occurring due to some activities within the organization.

Another key role of a CHRO is to maintain a keen observation and recognize the employee who is the driving force of the process, the initiator, and help develop his/her skills better with appropriate guidance in the form of leadership skills or knowledge enhancement training modules.

Action planner: Companies willing to change according to where opportunities lie remains productive and progressive and the human capital segment is one that should always move in tandem with opportunity. The CHRO of a company should be in a position to recommend an action plan to bring more value to the table. For instance, if there is a new technology in-house, bringing someone from outside with expertise in the field is always a smart move. Even placing a potential leader in a new position to tap new growth avenues is considered sharp-witted. With digitization hitting every industry by storm, companies will have to be equipped with the latest technology and tech-savvy employees.

CHRO’s role is to identify the individual with the talent that might be hidden underneath. His responsibility also lies in advising the CEO about making the workplace millennial and generation Z friendly and include promising young minds in the leadership meetings as the current young workforce have the potential to bring in new innovation to the table.

Why a must-have for every company

The main objective of a CHRO is to simplify the complexities of a business hence he should be directly aligned with the CEO in making informed decisions. Some organizations are aligning CHROs and CFOs for better business performance; bringing people and numbers together — the two main protagonists in every business growth. It becomes imperative for the CHRO to understand every nook and corner of the business and sometimes stay prepared for things that aren’t necessarily core HR. However, his main focus should not deviate from people and talent.

The role of a CHRO is of great importance as the workforce becomes larger. With company culture gaining a great degree of importance, the significance of a CHRO continues to mount. With that being said, if your organization is functioning without a CHRO then you might want to look for one. And if your organization has a CHRO in place then you might want to revisit these aforementioned roles and responsibilities and whether these have been set in place when you appointed a CHRO for your company.

Reference: People Before Strategy: A New Role for the CHRO – Harvard Business Review

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