HR is not a back office anymore.

Over the last some decades, role of HR has transformed and moved closer to C-Suite.

HR managers traditionally reported to Chief Operating Officers and Chief Financial Officers. Now in majority of heavyweight companies they report to the CEOs.

The role of Chief Human Resource Leaders is gaining importance like never before. From support function, it has moved to strategizing and high-level leadership.

However still, often the answer to – who will be the next CEO – is sought among financial leaders, marketing professionals, and operations officers. CHROs are considered least likely to assume the position. This may change, as it should.

Culture and people, much like finance and brand positioning, are primary assets for a business. It puts HR leaders right at the core of business action.

Increasing responsibilities of CHROs

  • Relative to C-Suite positions, such as CEO, COO, CMO, CFO, CIO, and others, the role of CHRO is becoming central to business activities.
  • While CEOs and COOs are highest paid, CHROs are next to court highest salary according to the Harvard Business Review. Top CHROs are heavily compensated at high-performing companies as their talent and skillsets are hard to find.
  • CHROs are groomed to become people leaders. They are familiar with all the cogs of diverse departments and are best positioned to support the top leaders who may not be in proximity to the ground realities.

CHROs make quality leaders

Human resource leaders are best familiar with the workplace culture. On three main aspects of leadership, pertinent for successful CEOs, CHROs score highest on all.

  • Leadership style,
  • Thinking style, and
  • Emotional competency.

Leadership style stresses upon how an executive behaves and wants to be perceived in different groups; Thinking style is about how one approach situations; Emotional competency outlines how one deal with pressure, ambiguity and risks, in a workplace.

CHROs ace in these traits. They are at the people end of business spectrum. Being involved in employee engagement through training and development and building workplace culture, CHROs exhibit proficiency across the three verticals according to a study by Korn Ferry. Here are some quick ways how CHROs’ leadership abilities prove instrumental:

  1. HR leaders can enhance the success of M&A deals.

Mergers and acquisitions deals are becoming more prevalent. 70% to 90% of the acquisitions fail to realize the importance of employee management. According to Harvard Business review, most CEOs are unable to manage and motivate employees post a merger or acquisition. They are the biggest factors in the downfall of M&A deals.

Chief human resource leaders can steer human aspect of M&A deals.

  1. HR leaders make changes in their organizations swiftly.

With businesses modernizing with a cut-throat competition, organizations need to act swiftly and wisely to decide which technologies can best benefit their workforce, business and customers. HR leaders can successfully redesign their organizational structure to support the pace required in current times.

Top employees are more tuned to the company with new opportunities, autonomy and technology at place. CHROs are best positioned to take speedy decisions as they are connected with the employees as well as the top management.

  1. HR leaders can build trust in leadership – internally and externally.

Trust in leadership is vital for both external images positioning as well as internal environment of the company. When employees fail to trust the leadership, it leads to attrition and dissatisfaction. As organizational culture becomes sturdy and trustable, outside brand image of the company also improves.

CHROs fit the bill for CEO position

In the survey by Korn Ferry, except for COO, the executive who triumphs in possessing traits required in a leader is in CHRO. That’s closest to the role of CEO. Outside the mundane administrative tasks and managing compensation and benefits, CHROs can be highly-efficient, strategic and emotionally competent leader for a company.