If you called a plumber to fix a broken pipe, would you trust him if he had no prior experience actually plumbing? What if you found out he’d been a construction worker for 10 years, and knows enough of the basics to get the job done—would that change your mind? If this seems like an odd scenario to you, it shouldn’t; it’s business as usual for the majority of companies hiring CHROs. That’s because more often than not, CHRO positions are being filled by people outside of the HR realm.
A study by Aon Hewitt found that “more than half of participating CHROs revealed they are not career HR professionals.” It seems that the shifting nature of the business landscape, and a perceived lack of business acumen among HR professionals, is leading organizations to turn to other areas of the organization (think accounting and revenue-focused departments) to fill senior-level roles in HR.
But is this the right call, or is it a totally wrongheaded approach that’s bound to make existing problems worse? To find out, we spoke with some HR vets to get their thoughts.
Required Skills Have Evolved
Nancy Harris, founder and principal consultant at Restart Consulting in Chicago, says she’s not surprised by the Aon findings. “We’re at a juncture in the HR function,” she said. “The skills needed for HR professionals are different than in years past. This is not to say there are no business-minded [HR] professionals; there are — but they’re in the minority.”
“I’m actually a little insulted, but frankly not surprised to hear of this trend,” said John Herath, partner and director of human resources with Orion International in Cary, North Carolina. But, he added: “Unfortunately, some HR professionals have not proved to be good business partners. Sometimes we get so wrapped up in the ‘human’ aspect of the job that we forget to focus on the ‘resources’ aspect.”
As both an HR executive and a partner-level consultant, Ronald Recardo has a unique perspective on the subject. Though Recardo, managing partner of The Catalyst Consulting Group, LLC, thinks the Aon study is flawed (“It represents a snapshot in time and is reflective of their sample characteristics”), he acknowledged the “general trend of more and more CHROs coming from outside HR.”
But why, exactly? “HR in most companies is still perceived as an administrative, tactical, and touchy-feely function,” says Recardo. In many organizations, he says, it takes on too much of an employee advocate role instead of finding a balance between being both an employee and a business advocate. The result: lack of credibility across the organization.
Also, many HR professionals lack an understanding of business. They understand the specialties of HR: compensation, training, employee relations, etc. But, says Recardo, they “don’t understand how the organization makes money and how HR can impact that.” They can’t, he says “even read an income statement.”
The Perception of HR Needs to Change
HR pros need to shift from being policy-driven to being purpose-driven, says Harris. “The legal stuff will always be there, but does it need to be part of HR?” she asks. “Take away the policy, procedure, legal, benefits, et cetera, and focus on the mission, metrics, and organizational structures that align and drive the business.”
That shift is critical and relates to Recardo’s point about moving away from a singularly employee-driven focus to a more business-minded focus. According to Steven Rothberg, president and founder of College Recruiter, HR pros need to be “more focused on the information that other chief-level leaders need” if they truly want to be considered for CHRO roles. That means a shift from focusing on efficiency to focusing on effectiveness.
“So, rather than the HR leaders providing her chief-level leaders with efficiency metrics such as cost-per hire, if she wants to become the next CHRO she needs to provide them with forward-looking metrics such as labor participation rates, salary trends, and other workforce planning metrics,” Rothberg says.
Herath offers what may be an important shift in perspective for HR leaders. “Perhaps we, as senior HR professionals, should adjust our thinking rather than asking the CEOs to adjust theirs,” he said. “We should pick our heads up out of the legal briefs and government updates and take a look at the business where we work.”
The more HR professionals can be seen as working to move the business forward, says Herath, the more likely they are to be promoted into that CHRO position. And, once they’ve landed that spot, even greater exposure may be on the horizon.