The HR function has completely transformed in the last few years, and CHROs have gone from minor players to C-suite masterminds.
But in order to stay on top, HR leaders will need to do more than just oversee day-to-day operations like administering payroll or managing disciplinary actions. "I firmly believe the job has gotten harder and bigger," says Steve Patscot, who leads Spencer Stuart’s North American human resources practice.
Fortune spoke with industry experts to get their take on the modern HR industry. They said these are the skills that top-level CHROs need to bring to the table.
Data and analytics
Generative A.I. has taken the business world by storm and HR leaders have a huge role to play in acclimating their workforce to the new technology. But that means they must also have a strong knowledge of data systems and how to use them.
“Data is the new intangible gold, or workforce gold,” says Kyle Forrester, a principal at Deloitte’s U.S. human capital practice. “And the ability for a CHRO to understand how to link internal and external data elements that drive insights that help impact business operations and business outcomes is an incredibly powerful skill to have.”
Those data chops are also critical for HR leaders to make the case to their C-suite colleagues about the kind of initiatives they want. It allows them to detail the kind of ROI they can get on various tech programs, and explain why they’re important to the company at large.
“You need data, rather than just this gut instinct or sentiment,” says Liana Passantino, a senior principal at Gartner’s human resources practice.
Design work with the employee in mind
While the Great Resignation has subsided in many ways, the labor market is still tight, and HR teams have to cater to a new level of worker expectations. Workers are demanding more from their employers than ever and HR leaders need to know how to manage those elevated expectations.
“We are compelled to create those experiences that make them feel like they're fulfilled, that they're getting their job done, that their job makes them happy or satisfied, or whatever their goal is,” says Jacqui Canney, ServiceNow’s chief people officer. “That to me is the human-centered design, that frankly, 30 years ago, no one taught me how to do that.”
Knowing how to leverage internal communications is also a major part of the employee-centered approach, according to Patscot. HR leaders often have to act as internal chief communications officers, using several different channels, like videos and emails, to get their message out to different teams in different time zones and languages.
“No one reads a memo anymore,” Patscot says. “It used to be, you write an organizational announcement. Now you’ve got to have videos, interactive websites, and mobile push alerts.”
Business strategy
Any corporate executive worth their salt is involved in developing their company’s strategy. But HR often can get isolated from business strategy discussions, and branded as a cost center.
“I think HR people have always been good at HR strategy. But it doesn't matter if you're not tied to what the business is doing,” Tom Wilson, managing director at Gallagher’s executive search practice says. “You can have great programs and all that, but if your company is evolving in a way that’s not what you're looking at—that's trouble.”
HR leaders should be sitting in on strategy meetings with CEOs, CFOs, and other executives, Wilson says. And they should ensure they are deliberately building their HR strategy to support those broader business goals.
Building relationships with the C-suite, board, and investors
Multiple HR experts Fortune spoke with stressed how crucial it is that HR leaders know how to build relationships with their fellow C-suite colleagues.
Around 22% of HR leaders said they wish they’d known how to collaborate with the C-suite before starting their role, according to a survey of more than 100 CHROs conducted by HR consulting giant Mercer in fall of 2023.
“A good HR leader is going to be a mix of hard and soft skills: The data, the analytics, the analytical pieces of the business strategy. The soft skills are coaching, conflict resolution, how to get the best out of individuals and teams,” says Tom Wilson at Gallagher. “That's a hard skill to master and be very effective at.”
Each year, Josh Bersin’s eponymous consulting firm does an HR capability assessment. According to Bersin, he consistently finds that HR leaders at fast growing companies have an edge over their counterparts at slow-growing organizations: they have the ability to assess, develop, and coach leaders.
Most HR people “are constantly dealing with leadership issues,” says Berson. “How do we train and enable and support leaders?”
Learning how to work with the board is particularly critical—39% of CHROs in the same Mercer survey said they wished they knew how to work with directors before taking on their role.
Many first-time chief people officers who work with Jennifer Wilson, the head of Heidrick & Struggles’s global human resources officers practice, say the biggest step for them when starting was earning credibility with the board because they had little previous exposure, and underestimated the power of that relationship.
"You’ve got one chance to prove yourself with the board: That first meeting,” she says. “They don't give you a second chance.”
How can CHROs pick up these skills?
To hire CHROs with more modern skills like data and business strategy, many companies have taken to hiring people from outside the HR sector.
But for CHROs who want to grow along with the role itself, rotational programs are one way to gain experience in a different part of the business. Mariana Garavaglia, chief people officer at DoorDash, participated in those programs while working at Amazon, one of which was helping run logistics at a warehouse. Separately, for a few years after, she stepped into business operations at the e-commerce giant and took over as general manager for Amazon’s brick-and-mortar stores.
“Anytime that you have the opportunity in your career to experience a different function firsthand, it ends up being really, really helpful from a professional development standpoint and rebuilding or expanding your toolkit,” Garavaglia tells Fortune.
CHROs should also consider building their own teams to meet these new needs. For example, they could recruit an HR operations lead who ensures the HR function’s day-to-day operations stay in line with the broader business.
“No one individual will ever have the complete set of skills,” says Forrester. “And that's where it becomes balancing on your individual leadership team, to make sure you've got the right leaders with the right skill sets and focus areas that allow everyone to lean into their strengths.”
