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Chief Human Resources Officer | CHRO Role | Executive Recruiters

The Role of the Modern CHRO: Unlocking the Value of Human Capital

Written by Thomas Paik, Human Resources, Diversity and Inclusion Practice Leader

Historically, HR has garnered a reputation as a purely administrative function. Apart from the work they do in onboarding/offboarding talent and ensuring everyone toes the line, there’s often a temptation to see little else. In fact, some go so far as to tag HR as “the complaints department” and no more.

Unsurprisingly, this view tends to detract from the premium placed on the work that HR does and the value of its personnel. For context, a survey by HR tech firm, Namely, found that, out of 1,000 midsize organizations surveyed, just 7% had a C-level HR executive. Worse, when asked what departments they felt were most valuable to their organization, CEOs ranked HR in ninth place, according to research from McKinsey and Conference Board.

Yet, the imperative for proactive, multi-dimensional recruitment and talent management is only increasing. As we are seeing, the human resource is emerging front and center as a critical concern for organizations, and the majority of CEOs now see attracting and retaining talent as a top challenge.

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Considering this, it may be time to rethink these dated perceptions about the HR function and what it brings to organizations, as well as the role a Chief Human Resources Officer plays in unlocking this value.

Chief Human Resources Officer Job Description: What Does the CHRO Do?

The Chief Human Resources Officer (CHRO) operates at an executive level and is primarily concerned with running point on human resources strategies. While HR traditionally deals with the functional aspect of managing an organization’s workforce, the CHRO brings on board a business-critical aspect to the HR function.

The role of the CHRO is particularly valuable in:

Bringing a strategic focus to recruitment, company culture, and talent management
Coordinating the overall execution of HR functions to ensure they align with broad organizational objectives and aspirations, from the C-level down

Described in this way, the CHRO role almost seems to add a different characterization to what HR does and how it functions. In fact, this might actually be the case. As the Harvard Business Review points out, the modern HR function can be split into two – administrative and strategic.

The administrative function is essentially HR in the traditional sense, although augmented by modern technology and a data-oriented approach. But in the strategic sense, HR becomes not just an expense, as it was considered in the days of “personnel management”, but a critical player in aligning an organization’s workplace environment with its key business aspirations – and the CHRO is key to achieving this.

Since HR teams rarely have time to focus on the bigger picture, the CHRO provides top-level guidance on core HR functions while adding an external perspective backed with an understanding of market dynamics and the competitive landscape.

CPO vs CHRO vs CAO: What’s the Difference?

Why the CHRO Role Is Critical

As we gradually transition into the future of work, organizations are finding that the human resource is rapidly ascending the pyramid of key business assets. While AI and automation have radically altered the complexion of several jobs and will eliminate others, they only serve to highlight the dynamic nature of the roles that remain (and will emerge).

We are already seeing a mismatch in available talent and open roles in many industries, including sports and entertainment, finance, health care, hospitality & tourism, retail, insurance, legal, technology, real estate, and more. Plus, even when supply increases, there will still be stiff competition for the best.

It is organizations that are able to draw up and implement an authentic, well-considered approach to designing an environment where people want to work that will compete in this rapidly approaching future. Put this way, it’s easy to see why being able to call on an executive who can bring the strategic perspective of the C-suite into the HR function is so important.

CEOs around the world already see human capital as one of their biggest challenges, and leaving a CHRO out of the C-level equation is unlikely to solve that problem. With a CHRO who possesses proven experience in hard-core HR functions balanced with extensive exposure to business strategy, organizations can evolve a strategic approach to their human capital outlook while also meeting their recruitment challenges.

CHRO Challenges

Despite their clear importance to organizations, CHROs continue to face multiple challenges. As Boyden indicates in their report on the state of the CHRO role, these challenges are “numerous and complex” and often vary depending on how much support HR receives from management. These challenges include:

Compensation mismatch: According to Boyden, compensation and representation on C-suite committees differs for CHROs, compared with equivalent C-level roles. Although the degree of variance depends on the level of buy-in that the role enjoys from the Board of Directors and other executives, it is still a concerning phenomenon for senior HR practitioners.
Misalignment with CEOs: As mentioned earlier, CEOs generally do not rate the HR function, or CHROs, very highly. A common complaint is that CEOs believe that, being more pre-occupied with processes and rules, the CHRO does not make for a good strategic partner. The expectation is that a C-level role should bring broad strategic benefits to the organization, but HR is too mechanical a function to provide this. But this is unfair, as CHROs clearly play a critical role in tying broad organizational goals to administrative functions across HR. What CEOs need instead is to clarify the expectations they have of their CHRO right from the recruitment phase.
Perception issues: In many ways, the value attributed to HR is limited by the perceptions and long-held beliefs of senior-level colleagues. Senior HR practitioners vying for a seat at the C-table have to work hard to make the case that talent is an organization’s greatest asset and that managing this properly is key to profitability.

While these challenges are concerning for HR practitioners, it is clear that we are on the cusp of another paradigm shift in the general perception of HR. With the rapidly-evolving concept of the modern workplace, employee satisfaction and engagement is beginning to rank as high as (if not higher than) customer satisfaction. As a result, we expect these challenges to be short-lived as more organizations awaken to the value in their human capital.

CHRO Competencies

When hiring a modern CHRO, organizations need to look out for specific competencies. These CHRO competencies will vary across organizations, depending on their unique needs and culture. Nevertheless, prior experience in business-related functions, as well as HR competencies, will be critical.

CHRO Skills

Since the role of chief human resources officer is inherently strategic, CHROs need practical skills, like payroll processing and compliance. They should also be data-minded leaders and exceptional communicators who excel in:

Crafting and fine-tuning broad, data-oriented strategies
Overseeing short- and long-term strategic planning
Measuring, analyzing, and communicating the impact of initiatives
Tweaking strategies and initiatives, as needed

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Our hands-on HR executive recruiters have experience working with private, public, pre-IPO, and non-profit organizations. Clients are typically $50 million in revenue to Fortune 1000’s or have assets between $500 million to $15 billion.

Successful placements span the entire C-Suite – CEO, CHRO, Chief Operating Officer, Chief Administration Officer, Chief People Officer, Chief of Staff, and include vice president human resources, general counsel, and other director-level leadership roles.

Check out our industry-leading resources to see why Cowen Partners is a top human resources executive search firm in Anchorage, Seattle, Houston, St. Louis, New York City, Chicago, Atlanta, Miami, Dallas, Los Angeles, and beyond:

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What Is a Chief Administrative Officer (CAO)?

A chief administration officer (CAO) manages the day-to-day operations of a company and acts as the go-between for the CEO and senior-level management. A CAO also helps lessen the burden on a CEO by taking over time-consuming managerial tasks. By relieving the CEO of executive-level administrative duties, the CAO provides the chief operating officer with more time to focus on business strategy and important business relationships.

Main CAO responsibilities and duties usually include:

Ensuring compliance with all laws, government regulations, and other mandator rules.
Managing communications between top-level executives and management.
Supervising operations of various departments such as sales, HR, marketing, and finance.
Reporting performance metrics to the CEO and other top-level executives.

3 Qualities of a Top CAO

A chief administrative officer must be able to juggle multiple tasks and projects at one time while acting as a critical liaison between the C-suite and top management. To be successful in this role, CAOs need to be:

Highly effective communicators
Exceptionally organized
Compelling leaders

Here’s more on how each of these skills and qualities is essential to the success of the chief administrative officer role.

1. Highly Effective Communicators

The CAO has to manage messages to and from the CEO as well as effectively relay orders to department leaders. Clear communication is required to give concise messages and instructions without confusing any parties involved.

2. Exceptionally Organized

Many administrative and managerial duties involve tedious paperwork and other menial tasks. Organizational skills are vital when performing these duties to ensure nothing slips through the cracks.

3. Compelling Leaders

While the CAO relays information to the CEO for department leaders, the chief administrative officer also has to wear a leadership hat when supervising various departments. The ability to lead people with professionalism and charisma is an ideal quality you want in a CAO.

CAO vs COO: What’s the Difference & Why It’s Important

A chief administrative officer and a chief operating officer have very different roles, but both are valuable to a company. Understanding the difference between these two positions can provide insight into your hiring decisions and help you look for the right talent for your business. Below are the main differences between the two roles.

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The Role of a CAO

A chief administrative officer is responsible for day-to-day operations. The CAO typically reports to the chief executive officer and acts as a go-between for the CEO and upper management. By taking on the daily operations of the company and fielding questions from management, the CAO provides the CEO with the space needed to explore new business strategies and other important company matters. If you’re looking for someone who can help lighten the CEO’s role, a CAO is an excellent hiring choice.

The Role of a COO

A chief operative office is an executive position responsible for improving efficiency. The COO often works with personnel management, sales, and production. By engaging with these departments, the COO finds areas for improvement and works to implement procedures and practices that will increase efficiency. If you need someone to conduct performance reviews and audit business processes, a COO can create a strategic plan to improve operations.

The Importance of Hiring for the Right Role

Carefully review the tasks typically assigned to a CAO versus a COO to determine which position is most important to your company. You may need both a CAO and a COO but understanding the different roles will help you prioritize the positions and focus on the pain points of your business.

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Our hands-on HR recruiters have experience working with private, public, pre-IPO, and non-profit organizations. Clients are typically $50 million in revenue to Fortune 1000’s or have assets between $500 million to $15 billion. Successful placements span the entire C-Suite – CEO, COO, CFO, CHRO, CMO, and include vice president human resources, general counsel, and other director-level leadership roles.

Read more of our industry-leading diversity recruiting resources to see why Cowen Partners is a leading diversity and inclusion executive search firm in New York City, Chicago, Seattle, Dallas, Los Angeles, and beyond:

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CHRO Role: Unlocking the Value of Human Capital | HR Recruiting Firms