Q&A with Anna Penfold on the changing role of the CHRO

18 August 2021 Consultancy.uk 5 min. read

The role of Chief Human Resources Officer (CHRO) has evolved over the years and even more so since the start of the pandemic. A discussion with Anna Penfold, partner and co-leader of Russell Reynolds Associates’ global Human Resources practice, on the CHRO’s growing prominence and their main areas of focus in the coming period.

How important has the role of CHRO become in today's corporate office structure? 

The CHRO has become a particularly important function within the boardroom as organisations increasingly dedicate resources to non-financial issues like corporate purpose. Many of the most pressing issues in the workplace like DE&I, ESG, talent management and retention are firmly in the remit of a CHRO.

In fact, boards are scrutinising candidate credentials for the role in more detail as an increasing number of appointments are for those with on-the-job experience in addition to commercial know-how such as consulting expertise. As boards increasingly focus on key issues like ESG and DE&I, the job of the CHRO will become even more critical within the corporate office structure.

Anna Penfold, Co-leader of Human Resources practice, Russell Reynolds Associates

Has the pandemic accelerated the CHRO's influence in the boardroom and, if so, how important is it?

Absolutely, the pandemic has put CHROs on the front line in some of the most pressing boardroom issues of the pandemic. They have had to keep their workforces safe, motivated and productive through lockdown while being involved in tough decisions around salary cuts, furloughs and redundancies. And these questions are not going away. The success or failure of hybrid working will be one of the most important tests for the board in the years to come.

Additionally, some functions that used to sit at the HR organisational level have shifted to executive teams and boards. Employee wellbeing, the future of work and engagement are areas that now command scrutiny, investment and action. Hence, we now see a growing trend for workplace representatives on boards in UK PLCs and other organisations providing further evidence of the role becoming central to strategy.

Talking about the role itself, what are the top three things CHROs need to address in today's workplace in preparation for current and future needs?

Today’s CHROs have quite a few elements to juggle in addition to being advisors to the board on matters of compensation, governance, succession planning and talent management. Some of these elements we have touched on already. Firstly, the future of work and how the modern office will change for many after the experiences during lockdown. Organisations will have to ensure employee wellbeing and support their workforce as it adapts to a new way of working.

Secondly, diversity, equity and inclusion and how to ensure equity and representation for all in the workplace. From racial and gender disparity to inclusion, there is a lot to be done in this area now and going forward.

And finally, sustainability. As ESG gains momentum and becomes more defined, the question remains, how are organisations placed to manage their sustainability ambitions in the face of scrutiny from boards, employees and from external influences?

Diversity and sustainability have been ongoing talking points for many organisations. How do you envisage the role of CHROs will change to take action in these areas?

Traditionally the CHRO has been an entirely internally facing leader, the agent for change within an organisation. But today these issues are not just internal. The public, regulators and investors all want to know where organisations stand and the CHRO now increasingly has an external facing role as the voice of the company, employees, its wider community and customer base on social issues.

This is an enormous change for Chief Human Resources Officers and requires a very different skillset.

One of the most talked about workplace trends is the future of work and its impact on work/business culture. How can the CHRO help businesses transition to new ways of working?

The future of work is a contentious subject for organisations, boards and leaders. The CHRO’s role is to develop a sound understanding of the business itself, build credibility with business leaders to design workforce strategies which match business needs, suit employee wellbeing and meet local safety standards.

Collaboration with other members of the c-suite is crucial. CHROs must be agile and partner with CFOs, CTOs, GCs, and others to design solutions that are dynamic enough to meet organisational needs over time and across regions. This is especially true when designing a hybrid workforce plan.

CHROs must also be the ones who set the tone and act as the face for change, alongside the CEO. It is crucial that these two figureheads work together effectively as they will be the organisation’s cultural barometer when it comes to the future of work.

What are the main opportunities and challenges CHROs face as the workplace structure shifts and the talent pool increases to potentially include international employees?

Several current practices and issues will evolve and so too will their solutions. For instance, CHROs will be charged with developing flexible and location-agnostic approaches to compensation which reflect the performances of the individual and that of the business as well as values and behaviours. These new reward approaches will undoubtedly include ESG metrics.

An international workforce will also mean a change in an organisation’s DE&I approach. Solutions must evolve to meet the needs of the new workforce, the business culture as well as its customer base.

The main challenge will be effectively managing apprenticeships, talent development and talent mobility in a hybrid world where there are fewer opportunities to have face-to-face interaction and communities of practice.