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The 21st Century
Chief Human Resource Officer

April 4 2006 - Senior HR leaders have a changing role to play with the rise in prominence of issues such as:

  • workforce demographics and global talent trends
  • corporate scandals and intensifying regulatory challenges
  • rising costs of health care and pensions
  • technology innovations enabling new ways of working
  • increasing globalization
  • endless pressures to boost workforce profitability and performance

Meet a developing 21st century professional: the Chief Human Resources Officer (CHRO).

A new report from Deloitte Consulting, Strategist & Steward: The Evolving Role of the Chief Human Resources Officer, outlines the challenges, processes and performance measures facing today's CHRO. According to the report, the modern CHRO is required increasingly to act as both strategist and steward. To quote Deloitte's media release, they are 'leaders who not only manage the HR function and operations team, but also collaborate directly with the CEO and board of directors on a range of critical business issues.'

Jeff Schwartz, principal and national co-leader of Deloitte Consulting's CHRO Services said:

"The requirements and perception of HR are changing dramatically as this function's leadership is now expected to play a central role in building and shaping - not just staffing - the enterprise strategy."

"This is an environment that HR leaders have longed for - where their executive peers would view HR as a business partner, rather than as a back-office administrator. Now CHROs must make sure that they are up to the task. The central challenge for CHROs is to view themselves as business leaders first - i.e., senior business executives responsible for the HR portfolio."

Deloitte Consulting's framework categorizes the CHRO's roles and responsibilities in four major ways:

  • Workforce Strategist: Integrating business strategy and overall performance are increasingly important tasks. As well as supporting and implementing overall workforce strategy, CHROs also have a significant role in developing and informing HR strategy - helping the CEO and other senior managers design strategies that are consistent with global labor trends, available talent and next-generation leadership and employees.

  • Organizational and Performance Conductor: How do businesses get the best performance from their employees? Organizations are increasingly complex and performance improvements can be required from departments involving:
    • operations across geographic boundaries
    • virtual teams
    • contingent workforces
    • telecommuting
    • job-sharing
    • flexible hours
    • workforce diversity

    Modern CHROs need to be able to navigate all such options, acting as change masters and architects of organizational structures and rewards programs.

  • HR Service Delivery Owner: Despite the increasing focus on wider business issues, CHROs must still provide cost-effective, day-to-day HR administration and operations. But they need to devote less time to overseeing their own HR systems and processes and spend more time managing a complex mix of in-house, self-service and external resources. Internal and external services must be blended into a cohesive and seamless working operation..

  • Compliance and Governance Regulator: CHROs must work directly with their boards on employee issues directly related to the critical areas of:
    • risk management
    • regulatory compliance
    • ethics
    • integrity

    Additionally, they are expected also to assist with a wide range of board-related issues, such as board member selection and orientation, executive compensation and succession planning.

"The role of the CHRO as an enterprise business leader is still evolving - but this transformation has never been more timely or relevant," said William Chafetz, principal and national co-leader of Deloitte Consulting's CHRO Services. "As human capital-related issues, such as Baby Boomer retirement, generational differences, skills gaps and workforce globalization, continue to challenge a company's overall strategy and bottom line, the CHRO must become an increasingly familiar face and, in many companies, a potent force in the boardroom and executive suite, paving the way toward change, performance and new ways of working."

Deloitte Consulting's "Strategist and Steward" report is available at http://www.deloitte.com/us/strategistandsteward.


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