CHRO concerns have migrated to the core of the corporate agenda 

“The top layer has to encompass a strong culture, values and a sustainable strategy and vision,” says one Amrop Managing Partner. “And that’s going to be key for whatever you do. Be it composing your management team, your workforce planning and so forth.”  

Today’s fittest organizations know that organizational success rests upon human shoulders. Furthermore, purpose, ethical values, principles and culture are critical in attracting and retaining today’s executives. They rank high for 90% in deciding whether to join an organization1. 

An Amrop Board Member cites a toy company. “We started working with them as a 100-million-dollar business, who many years later went public as a billion-dollar business. We helped them to appoint an HR executive from a major bank. She’s been instrumental in helping change the culture and driving this business to its next iteration as a public company.” 

Shining examples aside, has the HR role really grown in importance? “Yes, for sure,” says this Amrop Partner. “Five to ten years ago there was a discussion as to whether HR or ‘People’ should be on the executive agenda or whether it was more of a compliance, contractual, legal discussion. Many times we saw CHRO role positions put under the CFO. We rarely see that anymore.” 

The Amrop Board Member explains: “You might have the best strategy but unless you have the right people who can implement it’s all for nothing. It takes a CHRO to be a true business partner, to think strategically…to engage the CEO, board and C-suite around what it’s going to take to bring in the necessary people.”  

But for one Amrop Managing Partner, the human domain still faces a mountain: “It hasn’t really evolved, that’s the problem. There has been insufficient integration and strategic learning.” Why? “CHROs are still busy with payroll, hiring and admin, and there may be some succession planning, but they do it all in the traditional way.” Culture, sustainability and vision are often undercooked. 

This Amrop Managing Partner is cautiously optimistic: “I have seen some front runners doing really well. Invariably wearing the business hat —very strategic. This is “transformational HR.” What should the ultimate mission of the CHRO be? “To help the company to move from good to great. The best are helping the owner or the CEO to attract, develop and retain.” 

Right arm of the CEO 

As we have seen2, the CHRO/CEO is one of the critical  C-suite 'binomes'. The high-performing CHRO is “a well-rounded business partner who can truly complement a CEO,” says this Amrop Board Member. This has implications for the CHRO development track: “Someone who has grown up with just one discipline is probably not well rounded enough to be the CHRO of the future.” Instead this has to be “a deep generalist, with gravitas and credibility.” An Amrop Partner confirms that “the CHRO has a huge agenda, typically delegated from the CEO, for executing on the policies of the organization, generating an inclusive environment of freedom of thought, of being.” 

Hand in hand with the CIO  

But the relationship with the CEO is not the only important one. An Amrop digital specialist sees the Chief Information Officer as working closely with the CFO, CEO — and CHRO: “at the highest level of the organization. If technology is becoming more and more important it should move from the executive leadership team to the board.” 

The CIO/CHRO collaboration is twofold: Firstly, talent strategy must embrace digitization in individual components of a business, or in changing the whole model – even more so for organizations transforming to digital service providers. Secondly, the collaboration concerns the automation of talent management processes, once the most human of all activities. Today, AI is joining the hiring team. “Many Fortune 500 companies employ AI-based solutions to weed through the millions of job applications the companies receive every year,” the WEF confirm.3 

No forward-looking CHRO can ignore the time and cost-saving benefits of AI at the candidate-entry end of the recruitment funnel. And its sophistication and reach are growing as machines progress from content analytics (such as CV scanning), to more interactive processes (such as real time candidate interviewing and assessment). AI is also widely used in internal talent management: employee evaluation and compensation setting. 

But the problems are stacking up. A global Amrop study4 revealed that while around half of senior executives would trust an AI to specifically assess their technical competencies or scan their CV, only around 15% generally trust it to intervene in a recruitment process. Around half would seriously mistrust a machine to conduct an interview. 

Regulatory scrutiny is intensifying. As raised in a previous Amrop article5, “An AI may have serious difficulty explaining how its results were derived, turning the algorithm into a black box.” There are also deepening concerns about fairness: “amplifying bias and discriminatory practices,” as the WEF reported.6 

AI use will require holistic leadership, not only complying with regulatory guidance, but aiming for moral excellence7 ‘beyond the letter of the law, to the spirit of the law.’  

The Information Commissioner’s Office in the UK (ICO) recently updated its guidance on AI and data protection, raising the use AI in recruitment as a reason.8 The New York City Department of Consumer and Worker Protection (DCWP) has adopted final regulation on automated employment decision tools (AEDT) in hiring.9  

“Ultimately, employer branding is one of the key things going forward,” says this Amrop Managing Partner. “A great place to work is connected to culture, values and sustainability, and success of course is connected to that.  

“If your senior management team and CHRO are unable to build that great place to work, you will fail. So that’s the total focus: a community of people rather than just ‘staff’. That needs to be fostered by the whole management team and orchestrated by the CHRO.” 

And if these initiatives fail? An Amrop Managing Partner echoes Amrop’s research11 — sub-par organizations will continue to lose people to smaller equivalents where they can make more impact; sustainable organizations with “better values, a more reliable culture.”  

Another sees a more insidious problem. Without a strong culture, an organization is merely a series of short-lived transactions with a procession of disengaged new entrants. And relying on superficial data sets will not solve the problem: “My interviewees often talk about employee satisfaction ratings, engagement ratings… It’s mostly HR people copying HR people. They do the surveys, and they are happy.” Furthermore, as the failings of AI quantifiables emerge, so do the limits of ‘spot checks’.  

Purposeful leadership 

One answer to winning the talent war - and federating a new generation of employees who no longer feel married to the firm - lies in a magnetic raison d’être. “Part of that is purpose-driven leadership; how to engage people differently,” says this Amrop Board Member. “All too often, companies don’t pay enough attention to the disruption caused by people leaving and constantly on the spinning wheel of replacing them. It’s not just about the costs of an executive search firm, it’s the integration of people into the organization, the onboarding, and what has to take place in the first few years. And if you don’t get it right, you’re constantly churning through people. Too many organizations still do that.” 

Derived from its extensive groundwork on wise decision-making, Amrop proposes a holistic approach that balances a leader's individual, socio-environmental, and business purpose. Purposeful leaders display five competencies and mindsets: vision, courage, integrity and authenticity, learning, empathy and accountability. 

Going with the flow 

When it comes to organization design, CHRO’s need to oversee shifts towards greater agility and fluidity. They must also address their effects on people. These are not always positive, says this Amrop Partner. “Even though we say, “it’s great, agile, with these loose organizational definitions”, many people actually find them fragile and hard to navigate. They’re comfortable knowing ‘I report to this person’ ‘this is our defined space’ ‘this is my box’.”  

There are similar HR implications for remote working “and what that does to an organization in terms of culture, how leaders communicate, the dissemination of knowledge, of training and development.”  

In this mobile landscape, an Amrop Managing Partner points out that a front line CHRO presence remains vital. “They have to be part of the strategy, of the business success, which means being connected with the customer team.”