In the rapidly evolving corporate landscape, Chief Human Resource Officers (CHROs) have garnered considerable attention within leadership circles. Faced with the constant influx of digital transformation, organizations are increasingly directing their budgets towards HR initiatives.

At its core, a CHRO is an executive responsible for prioritizing employee effectiveness, overseeing areas such as employee benefits, payroll management, and compliance with company policies and labor laws. In today's business landscape, the role of CHROs has transformed into one of the most crucial executive positions across various companies.

This transformation can be attributed to a shift in growth priorities. The dynamic changes observed in recent years, including talent shortages, unconventional hiring trends, retention challenges, and the global balancing act of talent demand and supply, have reshaped the function and purpose of CHROs. What was once perceived as a diminishing role in the face of technology and automation has now become a vital conduit for growth.

A PwC Pulse Survey reveals that 77% of executives consider the ability to acquire and retain talent as a critical component for achieving growth. Despite this, McKinsey and the Conference Board rank CHROs as the eighth or ninth most crucial role in a firm.

Unveiling the Underappreciation of CHROs

Paradoxically, while stakeholders consistently prioritize human capital, one in ten HR executives feels undervalued, with nearly half believing their function is considered less critical than finance by the board. A 2015 Harvard Business Review study highlighted the undervaluation of the entire HR function, including the CHRO, by CEOs. However, recent disruptions underscore the critical role CHROs play in organizational success.

CHROs are often perceived as operational, focusing on tasks such as onboarding, recruitment, benefits administration, and employee relations. However, in practice, HR professionals serve a strategic role in addressing broader business issues, from evaluating competition in hiring practices to implementing talent management procedures.

Despite their strategic contributions, stakeholders may view CHROs as cost centers that do not generate revenue, overlooking their role in transforming people into valuable organizational assets. Failure to communicate the importance of human capital and the contributions of CHROs in talent attraction and retention perpetuates this undervaluation.

Elevating CHROs to Strategic Leaders

Amidst the buzz surrounding digital transformation, it is essential to recognize that people remain pivotal to a company's progress. This realization has elevated the CHRO to a central position in driving corporate growth, emphasizing the importance of their presence at the executive table.

The role of CHROs has evolved from execution to strategy, especially in addressing challenges such as the great resignation, talent scarcity, inflation, and shifting work trends. Beyond addressing talent crunch issues, CHROs must stay abreast of the latest trends to attract top-quality talent.

To quote Steve Cadigan, LinkedIn's first CHRO, "If you have trouble recruiting, you have a creativity problem." CHROs must focus on fostering employee happiness and motivation, as a positive organizational culture becomes a crucial factor in attracting and retaining talent.

CHROs now have the opportunity to create value across the organization. Leaders like Moderna's CHRO, Tracey Franklin, exemplify this shift by taking ownership beyond traditional HR roles, contributing significantly to the company's growth and success.

The Strategic Decision-Making Role of CHROs

Reports, such as those from PwC, emphasize the pivotal role of CHROs in hiring and retaining talent, making them influential leaders within the C-suite. The contemporary corporate environment presents diverse challenges, from the great resignation to the emergence of the metaverse, demanding proactive responses from organizations.

As disruptions continue to reshape the business landscape, CHROs must play a central role in anticipating challenges and steering their organizations towards a future-ready state. Their involvement is critical not only for addressing current issues but also for navigating the complexities of talent shifts and educational changes on the horizon. In essence, CHROs have become indispensable decision-makers in ensuring organizational adaptability and success in the face of evolving corporate dynamics.