The evolving role of the CHRO

Just a few years ago, having a robust HR team led by a capable head of HR was a top priority for many companies. Emerging from the pandemic and contending with the phenomenon of the "great resignation," the role of the head of HR and the entire HR function became increasingly vital for organizational functioning.

During this period, companies boasted fully-staffed talent acquisition departments, compensation teams, and HR business partners, rendering HR operations akin to a "Golden Age" within the discipline. The value of HR was indisputable and integral to the company's success. However, as with any golden era, its gleam can fade swiftly.

Fast forward just three years, and what seemed like the zenith for the head of HR and the HR department may have marked their swan song. The traditional chief human resources officer (CHRO) perched atop the organizational hierarchy is undergoing a significant transformation. What exactly does this entail?

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In many companies, the role of the CHRO or chief people officer (CPO) is being phased out, along with the entire HR department. Various factors contribute to this trend, including overstaffing, economic downturns, or a deceleration in hiring.

This signals the dawn of a new era for HR leadership. The future CHRO must embrace the concept of an "Extended Team" and incorporate AI tools into their arsenal. An Extended Team comprises resources external to the company, capable of executing tasks on-demand. Whether it's compensation or talent acquisition specialists or services, these resources can be activated or deactivated as needed. The reality is that there exists a wealth of world-class expertise outside a company's HR organization, which can be harnessed more efficiently and affordably than maintaining an internal team.

Additionally, the advent of AI is revolutionizing the HR landscape. The modern HR leader must leverage AI tools to streamline departmental operations. Success in HR will hinge on adeptly managing external support and utilizing AI to expedite traditional tasks at a lower cost.

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In recent times, many highly-compensated CHROs have faced redundancy as companies prioritize cost-cutting and operational efficiency. Looking ahead, the ability to utilize fractional or fungible resources alongside advanced AI may render the expense of a C-suite executive untenable for cost-conscious companies. Building and maintaining monolithic departments, such as internal talent acquisition teams, only to disband them post-hiring boom, appears increasingly unsustainable for most companies.

Moving forward, there will be a greater reliance on external sources for talent acquisition support and expertise to fully leverage invested tools. Many companies have acquired robust talent acquisition tools but failed to optimize their utilization, prompting a reevaluation of core versus context functions. Outsourced firms specializing in hiring practices and cultural alignment may offer a more efficient solution.

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Moreover, the modern head of HR must anticipate how AI adoption will reshape organizational skill sets and competitiveness. As Inc. Magazine notes, companies like Cisco are realigning their focus towards AI, leading to job transformations and eliminations across departments.

In essence, the adage "the days are long, but the years are short" aptly encapsulates the seismic shifts witnessed in HR over the past three years. It underscores a fundamental reconfiguration of HR's present and future operational landscape.