“Nearly 1 in 5 new CHROs were not deep HR experts. None of these companies had a CFO who did not have deep financial experience when appointed.”
—2018 CHRO Trends Study by the Talent Strategy Group
It is hard to imagine a company hiring a CFO with little prior experience in finance. Or hiring a CIO with little experience in information technology. Yet it is relatively common to hire CHROs with little experience in HR. I do not believe someone has to have worked for decades in HR to be an effective CHRO. But the fact HR experience is often viewed as not important suggests people fail to appreciate or respect the depth of applied expertise and scientific understanding that goes into building an exceptional HR function.
HR experience is often viewed as a weakness.
One occasionally hears presenters at HR conferences say things like “I’m not from HR,” as if this somehow makes their views more business relevant. There is nothing wrong with not having HR experience. But it should not be treated as a badge of honor. It would be a fool who tried to gain respect from a group of sales professionals by pointing out that they had no actual sales experience. In contrast, some people act like not having HR expertise makes them more qualified to advise HR professionals. These people take pride in pointing out that they are not from HR based on an implicit assumption that people with extensive HR experience tend to lack business understanding.
This negative attitude toward HR experience reflects a broader issue plaguing the field of HR: the profession of HR struggles to get respect as a profession. People even question the value of having HR departments at all. Why is this and how can it be changed? The answer requires understanding why HR expertise matters and why it is perceived as being unimportant.
HR addresses highly complicated problems but does nothing to own its expertise.
Whenever someone says something like “I don’t care about HR,” I wonder “do you care whether employees execute on your business strategies?” HR is about a lot more than following employment regulations and paying employees on time. It is about creating methods to predict and change human behavior to support business goals. This requires addressing highly complicated problems such as:
- Restructuring organizations to account for radically shifting skill requirements, labor markets, and technologies that are transforming the nature of work.
- Attracting specialized talent from diverse sources around the world.
- Predicting how people will perform in jobs that they have never done before.
- Recognizing high performing employees without making lower performing employees feel underappreciated.
- Helping people change behaviors and develop skills to meet new business demands.
- Overcoming cultural stereotypes to create inclusive, supportive organizations.
- Finding ways to manage talent that comply with a constantly changing set of complex employment regulations.
Doing these sorts of things in an efficient, effective, and sustainable manner requires a combination of business insight, technological savvy, psychological knowledge, administrative excellence, legal awareness, and change management savoir fair. This is not the sort of expertise one picks up in just a few months on the job.
Saying someone can be a CHRO because they have experience managing people is like saying someone can be a CFO because they have experience managing budgets, or that someone can be a CIO because they have experience using computers. There is a big difference between being familiar with HR methods versus understanding the rationale underlying their design and knowing how they are impacted by technological innovations and shifting socio-cultural norms and expectations. Most people do not realize how much knowledge goes in to building, deploying, and maintaining effective HR practices (note the emphasis on effective). Nor do they appreciate what it takes to stay on top of the technological, cultural, and economic forces that constantly reshape the nature of HR.
The problem is HR professionals struggle to communicate their expertise in an effective manner. As a result, many people think HR is simpler than it actually is. HR professionals must be bolder in owning their professional expertise. This is not about overwhelming people with HR theories and minutia. It is about engaging business leaders in a collaborative manner that clearly conveys “I know a lot more about attracting, developing, motivating, and retaining people than you.” This includes constructively educating leaders when their actions indicate a lack of understanding related to employee psychology, HR technology, organizational culture, or employment regulations.
HR is a critical function that often fails to demonstrate its impact.
The reasons we need HR departments are similar to the reasons we need financial departments. If someone asked why companies force managers to track budgets and money under the guidance of a centralized finance department, people might respond that finance is a specialized area of expertise. It is unrealistic to expect managers to create effective accounting and budgeting processes on their own. Furthermore, financial resources aren’t owned by managers. They are owned by the company. Managers are just allowed to use them. As such, the organization needs centralized processes to ensure managers are allocating and using financial resources appropriately.
These are the same reasons why companies need HR departments. HR is a specialized area of expertise. Most managers do not fully understand how to effectively hire, evaluate, motivate, and develop employees. Nor do managers own the talent in their departments. Employees are far too costly a resource to risk being mishandled by managers who lack knowledge and expertise in HR methods.
When it is done well, HR involves engaging business leaders to define and implement talent strategies focused on the needs of the company. This involves getting leaders to view the workforce somewhat in the same way they view money: a highly flexible and powerful resource that is critical to supporting business needs, but also a highly sensitive resource that must be managed appropriately to be effective. Unfortunately, some HR leaders in the past failed to take ownership for this role. Instead of focusing on driving effective use of people, these leaders focused on managing administrative tasks associated with fulfilling basic employment requirements. As a result, HR is often seen as being more about managing administrative processes than addressing business needs.
To gain respect as a critical business function, HR professionals must take the lead in helping business leaders define what talent is needed to execute the company’s business strategy. They must also take ownership over creating and deploying methods to acquire, develop, retain, and motivate talent. And they must show the impact these methods have on business outcomes. This last part can be particularly challenging. CFOs have the advantage that it is fairly easy to quantify the value of money. In contrast, it can be difficult to quantify the value of talent. Nevertheless, HR professionals must find ways to demonstrate the financial value of their work if they want to be recognized as being business relevant.
Results drive respect.
The best way the field of HR can earn respect as a profession is to demonstrate the value that comes from using HR expertise to drive business results. This will change existing perceptions of HR as a profession of administrative experts focused on compliance. And perhaps someday the following statement will be included in all CHRO job descriptions: HR experience required.