The Importance of Chief Human Resources Officers

The position of chief human resources officer (CHRO) is growing in importance in corporate America. The importance of finding and retaining talented individuals increased in the wake of the COVID-19 pandemic, where a surge of people leaving their jobs voluntarily to seek alternate employment left some companies struggling with how to the fill the vacant positions, as well as find out why their employees left. A good CHRO hire can stabilize a company’s workforce and better place that company to be competitive in hiring for years to come.

What Is a Chief Human Resources Officer?

Ideally, the CHRO is a part of the C-Suite, a senior executive with considerable decision-making power within the company. This has not always been the case in corporate America, where oftentimes the head of HR has been a secondary position that did not have direct communication with the CEO and the Board of Directors. Without access to the very top of the company, a CHRO lacks the influence to set and maintain the company’s culture. As more younger workers take a greater interest in workplace culture and cite it as the most important factor in their decision on where to work, the CHRO position is evolving into a key element in the C-Suite.

The CHRO is responsible for overseeing all aspects of human resources for a firm. This means they are in charge of both acquiring and retaining talent and making sure that talent is evaluated for promotion. Further duties of the CHRO are to ensure compliance with local, state, and federal hiring and employment practices, helping to determine salaries and compensation for all employees, continuously using and modifying the means of evaluating success or failure of company initiatives among the workforce, and overseeing training programs for new employees. They are also tasked with developing and managing the company’s culture. This puts the CHRO in a position to continually evaluate and address employee morale and engagement.

CHROs are especially valuable in the talent acquisition area. The increasingly competitive marketplace for talented and qualified workers puts special emphasis on having excellent hiring practices. The CHRO needs to be aware of future staffing needs well ahead of time to be able to plan a hiring strategy properly, and understand the current compensation packages being offered by competitors so that the firm is able to attract the best talent. Data on all aspects of human resources needs to be compiled and analyzed by the CHRO so that the company can optimize its efforts to attract and retain a strong and effective workforce.

Do Companies Need a CHRO?

A decade or so ago, the answer to the above question would probably have been “no.” In fact, the vast majority of even mid-sized companies did not have a CHRO, according to a 2018 survey of 1,000 such firms. Things have definitely changed, however, especially since the COVID-19 pandemic. Now the importance of company culture and the fight to land the best talent have elevated the role of the CHRO. While a CHRO sets the direction for how the company deals with its employees, he or she also serves as the voice of those employees in the C-Suite. The CHRO should have a very good understanding of the morale and needs of the workforce and be able to consider those factors when the C-Suite is planning strategic initiatives for the firm.

The CHRO can assist in making sure that people are in position to contribute the most to the company. Recognizing where talent will be most effective takes serious time and energy and the authority to make personnel moves when required. Along with this is the ability to ensure that the personnel have the proper tools and resources to be able to do their jobs. A CHRO at C-Suite level will have the ability to carry out these tasks without getting bogged down in having to “send it up the ladder,” which can cause delays and frustration and lower company morale.

The presence of a CHRO sends a message to prospective hires that the company is serious about culture and values its employees. Treating human resources as such shows that the C-Suite understands the importance of their workforce and is committed to making the work environment a positive one for all employees. Conversely, a firm without a CHRO can seem out of touch to younger job seekers. Expanding the C-Suite entails an outlay of additional monies for a CHRO’s salary and compensation. It also brings in another executive with the authority to mold the company’s culture and direction, but ultimately the investment in a CHRO at the C-Suite level will pay off in the long run by creating the conditions that appeal to the young and talented looking to start or continue their career.