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Human capital has become central to corporate agendas as the dynamic between employees and employers has shifted in recent years. CEOs continue to view talent as a top concern even in the face of a slowing economy. This has elevated the strategic role of the Chief Human Resources Officer (CHRO) as a critical leader in the C-suite. Together, CEOs and CHROs are tackling critical talent management issues from developing the leaders and managers they need to drive the business to advancing Diversity, Equity, and Inclusion (DEI) initiatives to keeping factories and stores fully staffed with an engaged workforce. All the while, they must jointly tackle the pressing tactical issues related to returning to the office, managing hybrid and remote workforces, and supporting an ever-growing need for health and wellness support as burnout, mental health challenges, and other personal health issues have risen to the fore on the HR agenda.
Sometimes, managing these elements can create tension in the relationship between these two C-suite leaders. While the word "tension" often carries a negative connotation, in practice it can be productive and used to strengthen the CEO-CHRO partnership and propel their organization forward. The debate about whether workforces should return to the office full time or on a hybrid basis is a particularly timely example of this tension. Many CHROs are walking the tightrope between representing the needs of employees, who desire flexibility, with the needs of CEOs and upper management, who are concerned with the need to promote in-person collaboration for innovation and culture. The trend of "quiet quitting," the ongoing Great Resignation, and a looming economic downturn leave leaders with little margin for error.
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An integral part of being a CHRO is gaining the trust of the entire company as empathic to and an advocate for the needs of employees. As a problem solver for all employee related issues, the CHRO is typically the first person the CEO turns to for counsel when managing delicate situations and navigating highly sensitive issues related to leadership, talent, and culture in the organization. Deciding whether to return to the office is no exception. However, the final decision is often being made by CEOs given its enterprise-wide impact. If the CEO feels that the CHRO is advocating for the interests of the employees above the health of the organization, tension in the working relationship grows.
How do these two leaders navigate high-stakes issues when corporate strategy and employee sentiment may not align? Below are three strategies the CEOs and CHROs can try to cultivate a more successful, synergistic partnership.
Elevate the CHRO role to report directly to the CEO
Heidrick & Struggles places CHROs at private and public companies across all industry sectors, and in recent years one of the first questions CHRO candidates consistently ask is who they would report to. Given the critical talent management issues impacting company strategy, the CHRO reporting directly into the CEO ensures the partnership and access needed for the CHRO to influence strategic decisions critical to the organization's future. If the role doesn't report to the CEO, it could be an indicator to the best candidates that the HR function has not yet earned the seat at the table needed to drive impact.
Have the CEO drive the recruitment and onboarding of the CHRO
When hiring a CHRO, it's imperative that the candidate and the CEO see eye-to-eye on the nature of their relationship and have good chemistry with one another. The two should have open and honest dialogue about whether the CEO is truly looking for in a CHRO. Do they want a partner who will challenge them and who can stand up to challenge? Do they share common mind frames and values about the role of HR, culture, and talent to the future strategic success of the business?
Once hired, the CEO must clearly define their expectations and "what success looks like." From there, they must set the CHRO up to be a key player in decision making within the C-suite by treating them as a critical business leader with a true "seat at the table."
Support each other in becoming better leaders
The CHRO-CEO relationship should be a durable partnership with implicit, reciprocated trust and transparency to talk about anything, and even disagree, so that both leaders can drive each other (and subsequently the organization) forward. High-stress situations will inevitably arise, and the ability to navigate difficult conversations and ultimately come back together will be what makes the partnership a lasting one. By establishing trust despite conflict, the two executives can channel tensions to empower each other to be better leaders. It's also key that the CEO isn't the only leader giving feedback, rather the CHRO and CEO should establish a regular cadence to review each other's performance. The CHRO should have the space and opportunity to give the CEO feedback and strategic guidance informed by what they're hearing from employees, so the CEO can continue to grow as the main leader of the organization.
Today, the pressing question for many corporations is if, and when, employees should return to the office, and if not, what the model should be. Where there will likely be a new employee-related, hot-button issue facing executives in the near future, the strength of the CHRO-CEO relationship will be crucial in finding solutions that benefit employees and inspire companies' long-term success no matter what they may be facing.
Lisa Baird, Global Human Resources Office Practice Leader, Heidrick & Struggles
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