To whom do C-level executives report
Uber, Binary Capital, Google, SoFi - just four company names that are representative of the sensational HR disasters of the past few months. Such events not only have a negative impact on brand perception and the morale of the workforce (and their commitment), but also on the ability to attract and retain young professionals in the long term.
Of course, the responsibility for the individual incidents rests with those who enabled or covered up cases of inappropriate behavior. But the fact is: A strategically aligned HR department with a C-level representative would have been helpful in each of the cases. In line with this, a survey by HR software company Namely shows that out of 1,000 medium-sized companies, only seven percent employ an HR representative at C-level.
(Not) a case for the CHRO?
The importance of the human resources department has changed dramatically in recent years. After all, the fight for skilled workers is at the top of the priority list for many companies. Matt Straz, CEO of Namely, is also convinced of this: "For decades, business leaders have perceived the HR department as an administrative or compliance function. And far too many people still consider the HR department to be a complaints office."
Many decision makers do not have the same appreciation for human resources management that they place in other C-level roles. Or they see an HR department as a necessity when the company has reached a certain size.
“Instead,” explains Charlie Gray, CEO of Gray Scalable, “they have a HR manager or vice president who reports to the CFO or COO, even though this naturally creates strategic tensions over the various responsibilities. Responsibilities are often only viewed through the tactical lens. The importance of leadership development, people analytics and organizational planning for corporate success, which should not be underestimated, is all too often neglected. "
The role of the Chief HR Officer
A CHRO or CPO (Chief People Officer) is responsible for human resources management and is located at the C level. He sets the agenda for the corporate culture, knows how to value employees with experience and allows his company to take a strategic, long-term perspective when it comes to personnel.
"Between the management of compliance, performance, benefits and payroll, most HR teams have neither the time nor the resources to keep an eye on the big picture," says Straz with conviction. Of course, using technology can help save time. "A CHRO, on the other hand, is responsible for the well-being, development and professional success of all employees and at all levels," says Charlie Gray, who also considers this to be an essential success factor for any company. Finally, the employees also received a voice at the C-level through a Chief Human Resources Officer. In addition, business decisions and their impact on individual teams and areas can be weighed more carefully, the CEO said.
"A CHRO could help create real communication within a company. In this way, everyone could benefit from everyone's knowledge."
What a Chief Human Resources Officer can do
The day-to-day administrative tasks that the HR department has to deal with are of enormous importance. The HR team develops and implements the company's HR strategy according to its values and sets guidelines and processes when it comes to new commitments, staff development, promotions, etc., as Radoslaw Nowak, Assistant Professor for HR Management at the New York Institute of Technology, explains :
"The goal of the HR department is to improve the quality of management decisions at all levels that are related to management. To this end, clear processes must be created that act as control bodies and protect against decisions that are based on prejudices, for example. In practice This can mean, for example, that certain criteria must be met for a promotion, which the HR department defines. "
Nevertheless, Nowak is convinced that this is often difficult to achieve in practice. After all, prejudices are simply human and there are many cultural and structural social barriers that reduce the opportunities for minorities. Companies that have a CHRO on board at this point bring this problem to the board of directors and thus have someone responsible for equal treatment in the company.
The mandate of the CHRO
A Chief Human Resources Officer (or Chief People Officer) goes hand in hand with the increasing importance of issues such as diversity, gender pay gap or dealing with sexual harassment. A HR manager at C-Level can underline the company's commitment to diversity - both from a tactical and a strategic point of view.
And because these topics have a direct influence on the culture in the workplace (and thus on the success of the entire company), it is important that these topics are prioritized from above.
What a Chief HR Officer should bring
If you want to hire a CHRO, he or she should have specific skills, extensive know-how and experience. The specific needs differ depending on the type and industry of the respective company.
In general, a Chief Human Resources Officer should be relatively broad-based, as Matt Straz advises: "In my opinion, the ideal CHRO has a wide range of experience and skills. Because even if that is a strategic position - that Practical tasks such as compliance and payroll processing still have to be right. You need someone who knows and understands the functional HR tasks in order to be able to develop strategically in the personnel area. For this it is also essential that the CHRO knows how to handle data with the highest possible efficiency evaluates and develops strategies on this basis. "
Because the HR boss at C-level sometimes has to implement unpopular guidelines in order to drive the change forward, leadership qualities are also a must for anyone who wants to take on this role. Communication skills are also useful, after all, the CHRO should also "sell" the vision of its company to the employees.
Who the CHRO should report to
A CHRO or CPO should report directly to the CEO. Or to the COO. Under no circumstances, however, to the CFO, as his priorities are often in direct strategic conflict, as Charlie Gray knows: "Most veteran HR professionals immediately decline such a constellation: If the HR department reports to the CFO, it loses theirs strategic function. "
Assistant Professor Nowak also sees the CHRO's direct access to the CEO as critical to success. But that's not all: "A chief human resources officer must also have the ability to convey to the board of directors to what extent investments in HR processes will pay off in the future," says Nowak.
Placing the focus of a company on the commitment of young skilled workers and transforming your own company into a "great place to work" is always a good investment. And by setting up a CHRO (or CPO), you not only signal to your competitors, but also to your own (and future, potential) employees that your company values people, atmosphere and culture.
This article is based on a contribution from our US sister publication CIO.
- Case 1: Underestimate the importance of the inaugural address
It is helpful to invite the team to a come together and to officially introduce yourself again. In a short speech you should on the one hand tell something about yourself and your career and on the other hand give an insight into the management style as well as values and goals.
- Trap 2: Immediately turn everything upside down
Because of the high expectations, new executives often lapse into blind actionism. It is better to use the first few weeks for employee appraisals. This gives you an overview of expectations, tasks, cooperation, processes and possible sticking points. Changes should only be initiated with the involvement of the employees after the inventory has been taken.
- Trap 3: Let employees use it as an instrument
When a new manager arrives, employees tend to call them in for unexplained and unsatisfactory issues, so that they can speak up about these issues to third parties. But caution is advised here because often only the subjective perception comes to light. So you shouldn't make promises and make hasty decisions, but first get a comprehensive impression of the status quo and responsibilities.
- Trap 4: Form intense friendships with co-workers
If friendships develop with individual colleagues, one should question what influence the relationship has on day-to-day business in the company and what impression colleagues and superiors get when they find out about the friendship. To protect managers and employees, it therefore makes sense to keep a sufficient distance.
- Case 5: Be right and not admit mistakes
Admitting mistakes and accepting criticism from employees is often interpreted as a weakness in leadership. However, the opposite is true. True size and competence proves who is open to justified criticism and, if necessary, cancels a decision. This is how you gain credibility and trust as a manager.
- Trap 6: avoiding conflicts
Managers in need of harmony are usually also conflict-averse. They secretly hope that problems will solve themselves and often address grievances far too late. Whether it is wrongdoing by employees or conflicts in the team - you should state expectations early on, always give constructive feedback and take corrective action in good time. Clarity in leadership is a key success factor. And clarity and friendliness are not mutually exclusive.
- Trap 7: Always have an open door
A statement like "You can come to me at any time" is fatal. The reason: Unplanned conversations mess up the daily routine and tear managers out of focus on their respective tasks. In other words: Leading "in between" is not advisable. After coordination, take your undivided time for employee appraisals.
- Trap 8: Wanting to outperform experts in technical knowledge
It is a fallacy to believe, as a manager, to have an answer to every technical question or to be able to solve every problem. The specialists are responsible for this, namely the employees with their corresponding specialist knowledge. The superior's job is primarily to perform management and control tasks. Anyone who feels responsible for it as a boss quickly becomes a "senior clerk". Tip: Delegate so that you gain freedom and achieve your goals.
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