The chief human resources officer (CHRO) is relatively a new position. While it is up there with chief people officer and chief talent officer, the rising numbers underscore CHRO’s strategic importance for companies.
But that does not mean that the CHRO job is any more secure and defined. In fact, a recent study by Talent Strategy Group shows it is quite the opposite. CHROs, especially in Fortune 200 companies, face crucial challenges that has very little to do with their knowledge of the HR.
The first conclusion from the study, developed from conversations with the CHROs and analyzing public data, is that turnover is speeding up. While the job oversees talent management and strategy, the CHRO’s job itself is less than permanent.
When compared to 2018, there was a 16% increase in turnover in 2019. Nearly one in five (19%) of the Fortune 200 organizations replaced their CHROs.
Size matters. Larger companies were more likely to replace their CHROs than their smaller peers. In terms of sectors, finance and healthcare saw the most turnover.
Where are companies finding their new CHROs? Increasingly, they are looking outward, says the study. It notes that 2019 saw the lowest rate of CHROs (53%) coming through internal succession routes — this despite seeing high turnover. It underscores a preference for cross-industry knowledge and practices.
The fates of CEOs and CHROs are becoming more interlinked. The study noted that 2019 also saw a high CEO turnover of 40% compared to 2018. This turnover also resulted in the large CHRO turnover. Of the 35 new CEOs who came into the role in 2019, 40% replaced their Chief Human Resources Officer.
Women are starring in many CHRO roles, says the study. Nearly 4 in 5 (78%) of new CHROs in 2019 were female. It was the largest showing of female CHROs since the report's inception. In the Fortune 200 companies, over two-thirds (67%) of CHROs are female, a 12% increase over 2018.