The Growing Demand for Chief Human Resources Officers

Recently, the Ultimate Fighting Championship (UFC) organization partnered with Hanold Associates to find a chief human resources officer (CHRO). The organization has never before had a CHRO, pointing to the growing need for specialized chief executives across a range of industries. Through a strategic CHRO hire, UFC plans to prioritize the needs of its people to drive market growth and differentiation. The UFC CHRO will hold responsibility for talent acquisition and retention strategy development to ensure that the organization meets its long-term goals.

The demand for CHROs has grown significantly in recent years, especially in the mid-market. Many companies—even those with significant market share, such as Patagonia or UFC—are recruiting individuals for newly created roles. The commitment to hire a CHRO speaks to the desire to make talent practices more sophisticated as companies continue to scale and shape their distinctive organizational cultures. Because each of these organizations already has a developed culture and different long-term goals, their criteria for a CHRO vary quite widely, and many of the people considered for these positions do not have extensive backgrounds in HR.

What Makes a Great CHRO?

A recent survey of HR professionals, including CHROs, conducted by Aon Hewitt found that nearly three out of four responders had changed their career paths at least once before landing in HR. About a third of CHROs interviewed had no background in HR before assuming their chief executive role, and more than half of CHROs did not identify as career HR professionals. These statistics speak to the various methods companies have gone through to identify a CHRO that meets their needs, including going outside of traditional search strategies.

Many companies have identified the CHRO as a critical stakeholder in strategy development as employee expectations change rapidly and company policies must adapt to a dynamic workplace. CHROs must have a diverse skillset to handle the various challenges that might arise and adapt to changing situations in an efficient, speedy manner. The Aon Hewitt survey identified the following six key attributes of successful CHRO candidates:

A deep understanding of technology

chief human resource officerHR technology is evolving rapidly, and the best CHRO candidates understand the critical importance of keeping track of these developments and implementing software that makes sense for the company’s vision. The advent of software as a service (SaaS) has made it much simpler and easier for companies to quickly adopt new systems and technologies into their workflow. HR technology can bolster analytic capabilities while streamlining typical HR processes to maximize the amount of time the CHRO has to handle face-to-face responsibilities.

Making decisions based on data and analytics

All members of the C-suite rely on data and analytics to make crucial decisions. Historically, HR departments have not collected enough data to perform analyses on them. Moving forward, this system will no longer hold. CHROs will need to understand the right questions to ask and collect the appropriate data to make analytics-supported decisions that will benefit the company.

Asking questions specific to the organization

CHROs must understand how the unique culture of the organization impacts workflow and employee relations. Industry questions become less important than organization-specific questions. What works for one company may not work in another. Focusing on the needs of a specific organization do not mean that CHROs do not need to keep in touch with the larger HR industry, as lessons learned by other CHROs can inform the framing of questions at a different company. However, CHROs must keep in mind how their companies may have radically different answers to the same question.

Assuming the role of organizational culture architect

architect blueprintWorking within the framework of a corporate culture may involve changing that culture. A CHRO is the primary architect of a new culture and the individual who must inspire cultural shifts in the employee base. Cultures naturally change over time whether people guide them or not. The CHRO must make sure that the culture evolves in a productive manner and create plans for putting it back on track of it seems to move in a negative direction. The critical elements of culture change are managers and leaders. Great CHROs must understand how to get these individuals on board with their visions.

Scouting for talent within and outside of the organization

HR is responsible for supporting the growth of an organization by finding the best people for the tasks that need to be done. Excellent CHROs look for talent within the organization as well as outside of it. Finding talent involves a mixture of both intuition and analytics. While internal assessments can point to the people deserving of promotions, these reports do not always tell the whole story.

Mapping gaps in the organization’s future needs

CHROs need to understand an organization’s strategy for future development and anticipate the new skillsets that it will need before those abilities become vital. By identifying these gaps, the CHRO can search out internal individuals they can train to meet the upcoming needs or look for new hires from the outside so that the company can continue to grow. Scrambling to make a last-minute hire for an unforeseen need can cause a variety of problems.