Why Great Human Resources Leaders Are in Short Supply and How to Fix It

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Why Great Human Resources Leaders Are in Short Supply and How to Fix It

The role of HR is changing. We, as HR professionals, are continuously being called upon to show up in a leadership capacity. Yet, organizations often do not effectively equip HR with the relevant skills, exposure, and experience to step into the role of Human Resources leaders.

Similar to the cobbler’s children who don’t have shoes, HR is often overlooked in leadership development programs or assumed to know how to lead, given our expertise in advising other business leaders. This, however, is a limiting perspective, as preparing and equipping HR professionals for leading bigger teams and functions requires more investment.

Contents
The current reality of HR leadership bench strength
The changing scope and contribution of HR leaders
4 key actions we need to take to set future HR leaders up for success

The current reality of HR leadership bench strength

When the pandemic hit, Human Resources leaders had to handle many extraordinary situations they had never navigated before. These included workers passing away due to Covid-19 complications, moving employees to remote work overnight, and implementing procedures and policies to deal with vaccinations. HR teams also had to be managed remotely. New collaboration tools had to be quickly incorporated into HR service delivery.

As we now head into unchartered waters in the post-pandemic workplace, CHROs are being challenged and expected to lead in different capacities than before. A recent survey by SHRM and Chief Executive Group stated that 3 out of 4 CEOs are looking towards their CHROs for views on future strategy, addressing the future world of work challenges while also thinking about more traditional topics such as Talent, Digital, and Reskilling. The evolving role of the CHRO is an HR trend we expect to see more of in 2023.

However, organizations often overlook investing in developing a healthy and robust HR leadership pipeline.

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Even though investment in learning and development is increasing, fewer than 2 out of 10 executives believe they have the leadership bench strength they need. This situation is even more dire when we focus specifically on future HR leadership capacity. Given that some CHROs also stepped up during the pandemic, we are also seeing them moving out of HR into becoming CEOs and into other executive roles. Even though this is positive, the question remains whether this is not further depleting the HR leadership talent pool.

Businesses shouldn’t underestimate the consequences of not having strong HR Leadership. With the rise of social media, employees publicly expose HR failures, as was the case recently with Uber and Google regarding harassment, bullying, and discrimination. These are not isolated instances, with many other examples becoming more commonplace. A survey from Namely, an HR software company, also found that only 7% of midsize organizations have an HR Executive in the C-suite.

Beyond the perspective of consequences, the lack of strong HR Leadership also poses serious challenges to creating workplaces where people want to join and stay. Movements such as the Anti-work and Quiet Quitting (also known as active employee disengagement) have highlighted a need to reshape how organizations think about the employer/employee relationship. In other words, organizations without strong Human Resources leaders will struggle to compete in an already volatile talent market.

So, what can we do about this challenge? First, we need to acknowledge:

  • the changing scope of the HR leader,
  • the new expectations of what HR leadership entails,
  • and how organizations are contributing to a complex and often unforgiving stakeholder environment.

The changing scope and contribution of Human Resources leaders

When considering the scope of the modern HR leader, let’s start by identifying the increasingly complex stakeholder environment that most HR leaders face. Below is an overview of some key relationships the HR leader needs to manage. It also outlines the expectations these stakeholders hold of the role in today’s workplace. 

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Human Resources Leaders' Evolving Role

Let’s break this down further.

Relationship with:ExpectationExample
External StakeholdersReputation and Employer Brand ChampionMore CHROs are asked to speak publicly about how companies are addressing the challenges of the future of work. They also need to discuss how they are dealing with challenging issues and moral dilemmas.
BoardCustodian of Ethics and ContinuityCHROs play a key role in managing C-suite succession. For many Boards, the role of the CHRO has significantly increased with more legislation on ethical conduct and governance being introduced.
CEOTrusted ConfidantCEOs and CHROs form a “triangle of trust” together with the CFO or COO. For the CEO specifically, the CHRO has to be a trusted and knowledgeable sounding board. They have to have enough courage to call the CEO out where appropriate and stand up to confront, voice, and think collectively about tackling rising business and people challenges.
Executive LeadersAdvisor and MentorExecutives often look to the CHRO as a coach and advisor, asking for advice on not only their HR practices but often for feedback on them as leaders. In this role, the CHRO plays the role of mentor and becomes a “source of truth” to help executives obtain feedback and grow.
EmployeesCulture CustodianEmployees often, even though unfairly, hold the CHRO responsible for culture (it should be a joint leadership responsibility), ensuring that the people’s voice is heard at the executive level and that the organization is authentic in how they treat and manage people. Realistically, very few employees have a direct relationship with the CHRO. Yet, they still hold perceptions of what they believe the HR Executive should be contributing.
Direct HR ReportsGuide and CoachThe HR leader is becoming a guide and coach to their direct team leaders. As HR becomes more complex and dynamic, the CHRO has to play a role in developing continuity in terms of people strategy and practices. They are also pivotal in integrating HR across functions, regions, and priorities. Within this responsibility, there also lies the focus on developing HR leadership bench strength and thinking about the long-term continuity of the function.
HR CommunitySponsor and Moral CompassThe broader HR community looks towards the CHRO in a similar way to what other employees perceive the CEO. They are the sponsor and role model whom they can trust regarding decisions and moral and ethical conduct. 

Beyond these relationships and expectations, the emerging world of work is also shifting the focus and priorities of the CHRO. Hybrid work, digital business models, vaccination mandates, well-being and productivity, social responsibility, and future ways of work are only some of the conversations currently occurring around the CHRO table.

The changing nature of why, where, and how people work will significantly influence the employer-employee relationship. CHROs are expected to lead those conversations and find new innovative solutions as the basis for building more humane workplaces that are productive, sustainable, and profitable.

We are asking more and more from Human Resources leaders. However, without a focus on robust enablement, the function will struggle to live up to all the above expectations. Even though these solutions will focus on the longer term, we need to start taking action today.

But where do we start?

4 key actions we need to take to set future HR leaders up for success

Action 1: Make HR succession a priority

HR succession planning needs to be prioritized, and in a sense, we need to “eat our own dog food.” We demand business conduct talent reviews and have regular succession discussions. Yet, in most HR functions, we “never get to it.”

HR succession planning should carry the same level of priority and attention as other business functions. According to the Talent Strategy Group, 2021 saw external placements for CHRO roles outpace the appointment of internal successors for the first time. Again, that indicates that internal pipelines are not robust enough.

More organizations are starting to incorporate different pathways to reach the CHRO role. Traditionally, the majority of CHROs had a generalist or business partner background. However, we have recently seen more diverse pathways to include talent, organizational development, or “outside of HR” experience as a pre-cursor to the CHRO role. 

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We need to go deeper when considering HR succession pipelines. It’s vital to look broader than the traditional development paths and throw the net wider on possible candidates that can be developed into that role over time.

Action 2: Consider future-focused HR leadership competencies

Most HR competency models do not incorporate the unique perspective of HR as a leader amidst the current changes in role expectations. We need to broaden our perspective on HR leadership skills and competencies. At AIHR, we build upon our T-shaped competency framework that positions business acumen, data literacy, digital agility, and people advocacy as core competencies, to also include the following specifically for Human Resources leaders:

  • Setting direction – Providing clear guidance with the ability to translate strategic priorities into actions and achievable steps
  • Inspiring and motivating – Driving commitment towards organizational purpose and helping employees understand why they matter
  • Leading with empathy – The ability to see matters from different perspectives and make the tough decisions while remaining “human”
  • Building trust – Creating trusted relationships and cultures where people can feel safe
  • Managing conflict – Providing clarity during difficult situations and not shying away from the difficult discussions
  • Self-awareness – Reflecting, understanding themselves and who they are as a leader and continuously seeking feedback from others to further develop

Given the changing nature of work, the ability to apply these competencies in remote and hybrid work environments will become crucial for success.

AIHR’s Dr. Dieter Veldsman discussed how to become an effective remote leader with Darren Barrett, who’s held senior leadership positions in a remote setup at organizations like The Body Shop, Nike, and Peloton. See the full interview below:

Action 3: Rotate future HR leaders into the business

As part of developing future HR leaders, it is crucial that they spend time in business outside of their HR responsibilities. Future HR leaders need more exposure to managing operations, leading strategy, and driving commercial revenue. This is already a reality in organizations such as Johnson & Johnson, Amazon, ASML, and Nestle, which have implemented these job rotations.

As part of your HR succession and development plans, HR rotations in and out of business have to be a top priority. This will not only build an understanding for the individual of business realities and hone their skills, but it will also provide an opportunity to build credibility as a future leader.

These rotations could include time spent in Business Operations, Customer Service, Product Design, IT, Finance, and Marketing, to name a few. Within these rotations, internal secondments and gig-type assignments could also be viable options to explore.

Action 4: Create a coalition responsible for developing HR leaders

Lastly, organizations should consider creating multi-disciplinary coalitions responsible for developing future HR leaders. This coalition needs representation from across the business and is sponsored by the current HR Executive committee. Cross-functional mentorship and coaching programs need to play a vital role here, and if we want a different type of HR leader in the future, we need a different perspective on steering HR careers. 

Over to you

The horizon is one of opportunity, change, and transformation for leadership in HR. On the one end, a turbulent storm with rising expectations, new priorities, and demands, while on the other, an invitation to reshape and reposition the next era of human resources – an era with the potential to reshape why, how and where people work, redefine how organizations contribute and above all, how we think about humanity and sustainability. 

Our call to action to those privileged enough to lead HR functions today: How many future HR leaders are you nurturing to take up this challenge?

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