From Day One

Who Are the Next CHROs? A High-Stakes Recruiting Task Gets Serious Attention

Not long ago, if you’d asked someone what the most conservative part of an organization was, chances are the answer would be the HR department. Well, maybe tied with the general counsel’s office, but the image of the top HR officer as a high-ranking paper-pusher or disciplinarian carried on for decades.No longer. In the information age, when companies are increasingly investing in human capital over physical capital, the chief HR officer plays a pivotal role in a company’s fate. Today’s CHRO is a business leader, operating what Deloitte named “boundaryless HR,” in which “the traditional people discipline itself starts to merge with other related disciplines like decision science, behavioral economics, and academic disciplines such as psychology, sociology, and anthropology.”The question now becomes: Where can companies find a person like that for such a high-stakes role? Turns out, CEOs are far more proficient in CHRO selection today than they were a decade ago, says John Bremen, a managing director at consultancy WTW, where his job is to imagine the future of the C-suite. “People issues today are so much more pronounced and so much more prominent than previously.”From Day One spoke with CHROs in the Fortune 1000 and the consultants who recruit them to find out what it takes to be a CHRO at the world’s biggest companies. What do CEOs look for in an HR chief? And who’s next in line for the job? No one single formula emerges, but several key attributes emerge, including previous experience as a CHRO, demonstrated HR savvy plus a law degree, or a proven track record of adaptability across multiple industries.All Eyes on the CHROCHROs are experiencing unprecedented attention, thanks to their inestimable value confirmed by the pandemic, economic swings, social unrest, return to work, and now the global skills shortage. Dan Kaplan has spent 15 years recruiting CHROs at consulting firms like Heidrick & Struggles and Korn Ferry, where he’s currently a senior partner. He told From Day One that private-equity firms, in particular, have homed in on the position as they restructure companies, assessing not just CEOs and CFOs rigorously, but now the CHRO as well. Some PE firms replace the CHRO first, he said, “with a view that that person becomes the catalyst to assess and replace the rest of the leadership team.”Given the scope of the role, executives are appointing fewer first-timers than they have in the past, according to the CHRO Turnover Index by Russell Reynolds Associates. The number of rookie CHROs has been decreasing globally since mid 2022. Among S&P 500 firms, first-time appointments are down 19 percentage points since that year. This is even more true for FTSE 500 companies–the UK’s answer to the S&P 500–where for nearly a year in 2022-23) every incoming CHROs was a veteran of the role.Maral Kazanjian, the CHRO at the credit-rating agency Moody’s (company photo). Featured photo at top: Kate Gebo, CHRO of United Airlines, spoke at From Day One’s Chicago conference this springThere’s also an appetite for highly varied professional experience. The lion’s share of CHROs today are cross-industry hires. Analysts at Heidrick & Struggles examined the 2024 Fortune 1000 companies and found that more than 77% of external CHRO hires were from other industries. With a few exceptions, the CHRO is an “industry agnostic” role, said Kaplan, and HR chiefs tend to glide easily between industries. Among the most coveted qualities in a HR chief is agility, and cross-industry work naturally develops that skill. Now companies recruit CHROs with much of the same criteria they use when recruiting business leaders: experience with mergers and acquisitions and the grunt work of combining workforces, knowledge of a P&L, plus familiarity with thorny issues like labor-union negotiations. “At a company juncture—say, a new CEO comes in and they’re tasked with some turnaround—they often need a different type of CHRO for that phase of the company,” said Jennifer Wilson, co-head of the global HR officers practice at Heidrick & Struggles. “With the amount of M&A and cost-cutting, and then getting back to growth, they want to find somebody who’s been through that cycle.” Why Your Next CHRO May Also Be a JDIf you’re looking for a CHRO with cross-industry experience, plenty of exposure to the C-suite, plus experience with assembling multiple companies and quelling labor disputes, a labor-and-employment lawyer often satisfies the brief. With greater exposure to risk (as a sample: reputational, environmental, technological, privacy, and supply chain) it’s reassuring to know there’s an attorney occupying the seat. “There’s the employee-engagement lens, and there’s the productivity lens, there’s the regulatory lens, and there’s the profitability lens,” said WTW’s Bremen. HR is no longer a static department, now it has to make things happen.Law practice also develops the confrontational confidence CHROs need. “You need to have had the experience of walking into a senior leader’s office, closing the door, giving them feedback, and challenging them on an issue where you think there’s a pretty good chance of getting fired today,” Korn Ferry’s Kaplan said. At times, it’s as diplomatic as managing the CEO’s personality and presenting even the most uncharismatic leaders to the workforce as people who can be trusted, which sounds a lot like what might happen in a courtroom.Before Claudia Toussaint became the chief people officer at the global water-technology company Xylem, she was the company’s general counsel. CHROs can’t afford to be intimidated by hierarchy, she said. They have to be prepared to tell the CEO that they’re out of line, and why it matters. The professional training of an attorney comes in handy too. Lawyers gather evidence, make conclusions, and present a case. “That skillset, I think, is far more valuable today in the HR function than five years ago or ten years ago,” Toussaint said. “I think that’s why people are increasingly saying, ‘These people that have a law degree and have been trained to think systemically, to take data, analyze data, reach conclusions from it, and then drive impact from those conclusions—that’s actually not a bad background for leading HR function.’”HR and the general counsel’s office have a natural relationship. Maral Kazanjian, the CHRO at the credit-rating agency Moody’s, felt she was effectively moonlighting as an HR professional while working as the firm’s attorney, applying the law to all kinds of employment matters. “I was really lucky because Moody’s is a very successful company and also has a really fast-growing information-services business within the traditional ratings agency. Because they were growing so fast, a lot of employment issues arose,” she told From Day One. “We were in different jurisdictions. We had different questions we wanted to answer about ‘How do we do hiring right? How do we handle performance management? How do we maintain a focus on being inclusive? How do we do promotions right?’ There are legal questions, then there are operational and human capital questions.” Kazanjian’s first time leading the people function was at WeWork during the dog days of the pandemic. In February 2022, she returned to Moody’s, where she occupies the chief people officer job today.Jennifer Manchester, the CHRO at Fiserv, is a relatively new arrival to the C-suite, and like Kazanjian, has jumped industries. Manchester first crossed paths with HR at her former employer, the Dow Chemical Co., where she worked in the general counsel’s office on mergers, acquisitions, and other corporate transactions. “I always loved the employment piece and the people side of things the best. That’s where I figured it out: That was really ultimately what I wanted to do.”Manchester moved over to Fiserv in 2015, working closely with HR as a labor attorney, and ascended to the CHRO seat last spring, “I’ve always gravitated toward people issues, trying to solve problems. It’s such a dynamic role.” But about this she was clear: You can’t just pluck any attorney out of the legal department and promote them to the chief position. “You have to have some substantive core expertise in HR or employment. HR is a real science, and I don’t think anyone can just do it.”Deep, Successful Experience in HR Counts TooA background in HR is hardly irrelevant. Among the 10 highest-ranked companies on the Fortune 500, most of their CHROs have spent decades as HR practitioners. Melissa Hagerman, CHRO at insurance firm Genworth, came up through the HR department, and, like many of her peers in the Fortune 500, has worked across industries, including consumer and automotive retail and healthcare. She joined the HR field when it was still known as the personnel department. Being an effective CHRO takes compassion and diplomatic agility, she said. And it can’t be done without a natural curiosity for businesses. “As a CHRO, you have to really genuinely care about what the business is doing and where we’re heading, and you have to care about the people that are on the path to get us there. That is something that I really try to embrace and live by every day.”Hagerman is also a keen scout, continually monitoring what’s going on both inside and outside the organization, “understanding what’s happening politically and socially in the markets so that I can weigh in, whether that’s with our executive team or with our board of directors, or being able to think about how those may impact eventually our workforce.”HR has far more credibility and influence than in the past, Hagerman said, reflecting on her decades in the department. “The world now understands that people resources are really fundamental to the bottom line. Succession planning, development of associates—the focus on those things is far greater now than they ever were. Of course, cybersecurity, protection of data–all of those things–are more in the limelight now than ever.”Yet Your Next CHRO May Not Be Working In HR Right NowA career in HR can win you the seat at the top now, but that may not be true for the next generation of CHROs. Today, businesses seldom want an HR executive who has spent all their time in the department, said Wilson at Heidrick & Struggles. “In the companies we work with, it’s often said that if you can find somebody with a business background who’s either been in management consulting or held either a P&L role or a functional role outside of HR, that’s more interesting to us.”The next crisis is always around the corner, Korn Ferry’s Kaplan told From Day One, and HR has to be there to meet it. He rattled off a list of recent trials, from financial and economic wobbles, political unrest, racial injustice, reproductive rights, return to office, artificial intelligence, and gun crime. “If you are not prepared to put on your dance shoes and figure it out, you can’t do this job. More than academic credentials, intellect, or experience, you have to be able to tap dance.” As a result, people aren’t exactly grappling for the seat, he said. It’s a big job and it’s tough to recruit for. Some people get too close to the sun and opt out; others don’t realize what they’re signing up for before it’s too late.Everyone is looking for agility in the role. Bremen at WTW speculated that consumer-oriented industries–like retail, fast-moving consumer goods, cosmetics, or fashion–may be developing tomorrow’s most coveted CHROs. Tech firms develop great HR talent too because they have to marry operational complexity with consumer demands. Regardless of industry, he believes the most successful future CHROs are schooling themselves in the application of new technologies, particularly artificial intelligence, and have analytical capabilities far superior to their predecessors.In case you were thinking of plucking your next CHRO from the Wharton School, however, Kaplan cast doubt on the wisdom of choosing an MBA for the job simply because they’re a whiz at business. “If someone says to me, ‘I’m not an HR person, I’m a business person,’ that is a sign that I’m wasting time. I’ve never heard a CFO say, ‘I’m not a finance person, I’m a business person.’”Disciplines like finance can be taught in school, Kaplan argued, but HR is learned through apprenticeship. Management consultants who spoke to From Day One predicted that the future chiefs who are coming up through the HR department are leading complex functions at the moment, as heads of talent or directors of compensation and benefits.As today’s CHROs consider their potential successors, what are they looking for? At Moody’s, Kazanjian wants someone who is open-minded, bold, and analytical. She imagines that person might be in law, or they might be in management consulting. Toussaint wants someone who deeply understands the company culture at Xylem as well as how the business makes money, someone who’s good at data analysis, and someone who is a “truth teller,” uncowed by hierarchy. Manchester hopes her Fiserv successor has financial acumen and an always-learning attitude. At Genworth, Hagerman wants a values-driven, business-minded leader with deep knowledge of HR and a knack for diplomacy. Someone who is willing to uphold integrity, “above all else.”“Once upon a time, it was possible to be the most senior HR leader in a company and not have a grounding in the business fundamentals,” Bremen said. “That skillset is a necessary, but not sufficient, condition.” Yet business acumen alone isn’t enough without a deep understanding of the CHRO discipline, though he’s seen it happen. “They struggle. Just as you would struggle if you put someone in a chief marketing officer role who did not have a background in marketing. Sometimes leaders take those HR skills for granted.”Emily McCrary-Ruiz-Esparza is a freelance journalist and From Day One contributing editor who writes about work, the job market, and women’s experiences in the workplace. Her work has appeared in the Economist, the BBC, The Washington Post, Quartz, Business Insider, Fast Company, and Digiday’s Worklife.

By Jenny Sucov | September 23, 2024

Election Stress in the Workplace: How Leaders Can Respond Without Taking Sides

Business leaders don’t need outside research to tell them that anxiety around the coming Presidential election is high–and that the stress can impact employee well-being and productivity, but here are some sobering stats:•73% of U.S. adults say they are anxious about the election, according to the results of the 2024 American Psychiatric Association’s annual mental health poll.•55% of Americans surveyed by Pew Research always or often feel angry about politics.•8 of 10 in the Pew survey used a negative word or phrase to describe how they feel about politics, with “divisive” being the most used.•Nearly two thirds of workers (65%) surveyed this summer by the Society of Human Resource Management (SHRM) said they have experienced or witnessed incivility in their workplace within the past month. And more than a third of workers (34%) said they believe the November election will trigger additional incivility in the workplace.In fact, psychologists and researchers are now studying a distinct form of anxiety called “political anxiety” and the unique way it harms both physical and mental health. The stress has been building since the 2016 election.The good news: executives, HR teams, and managers can—and should—prepare (now) for the November election. With just a few weeks until workers head to the polls, From Day One reached out to HR experts to learn about their strategies to diffuse stress and political polarization in the office, and, if necessary, address conflicts that may arise. Among the takeaways:Encourage Employees to VoteOne simple and non-controversial step companies can take is to promote voting. While there’s no federal mandate that employers give workers the day off to vote, some states do, and many companies provide flexibility on election day. Encouraging workers to vote is a good way to acknowledge what’s on their minds without taking a political position.If you’re curious about what other organizations are doing or need to back up a recommendation to leadership, check out Time to Vote, a non-partisan business group launched in 2018 that believes “workers shouldn’t have to choose between earning a paycheck and voting.” With more than 2,000 member companies including VISA, P&G, and Target, the organization is attempting to bridge the legislative gap and increase voter turnout. Patagonia, one of the companies that founded Time to Vote, has been giving its employees Election Day off since 2016. This year, the outdoor apparel company will close stores, offices, and warehouses on Oct. 29, national Vote Early Day, to allow workers to vote and volunteer in support of the election.Acknowledge Political Differences, But Don’t Take Sides“Some leaders want to take a stance, but I would caution them not to impose their political views. Your job is to stay neutral,” says Deb Josephs, an HR consultant and executive coach. You can take a stand, without taking a side, she adds, “as long as you support the individual as opposed to an issue.” When Roe v. Wade was overturned in 2022, for example, one of her HR colleagues said their company put out a statement to let employees know that they could come to HR if they needed support for reproductive health. Large employers like JPMorgan Chase and Meta and others announced they would cover travel costs for employees who are seeking legal abortions out of state. Keep the Focus on Empathy and Employee Support “Organizations need to say it’s a polarizing time, and that could be impacting how you show up at work,” offers Tracy Avin, Founder of TroopHR, a human resources peer group with more than 1,300 members and 15,000 LinkedIn followers. Avin says the topic of how to address the election has come up often in the TroopHR message boards, so much so that she decided to host a fireside chat called “Leading with Empathy in Polarizing Times” with an outside expert this September. One piece of advice from the virtual session: Develop an "Allyship Series" or similar educational program to foster understanding and empathy for different experiences and perspectives within your organization.She advises HR leaders to do what she does for her members: create a supportive environment where all viewpoints are welcome. “It’s an opportunity for managers to know how to respond. It’s not about opinions,” she said. “You can say something like, ‘It seems like you’ve been upset lately,’ so that person can express that they are stressed out. Then you can tell them to take a day off or provide mental health resources as needed.”Additional outlets for employees might include a moderated Slack channel or an employee resource group (ERG). “What’s most important is that employees know where they can go for support,” says Leonora Wiener, an executive leadership coach and former chief operating officer of Consumer Reports. Communicate Early and OftenAt Consumer Reports, Wiener helped lead teams through the 2016 and 2020 elections, the racial-justice reckoning after George Floyd’s murder, as well as the pandemic. She stresses the importance of listening to employee concerns and actually asking your staff what kind of support they are looking for. “Oftentimes organizations aren’t that good at finding out what their ‘internal customers’ need,” she said, adding to make sure any feedback groups are diverse and include representatives from all generations and backgrounds. In terms of communications, her philosophy is lather, rinse, repeat. “People need to hear the same message many times, and it needs to be said through different channels. Not everyone reads Slack or emails, and not every manager delivers the message in the same way.” Start that election communications drumbeat today, she says.Don’t Go It Alone Josephs echoes that sentiment, recalling how much “over communication” was required during the pandemic and other recent events. She also points out the added pressure and increased responsibility borne by HR and people leaders as social and political issues continue to divide the country and tensions spill over into the workplace. Her tips: find support, leverage your professional networks, and share information with your peers. They are likely also engaged in scenario planning and reviewing their employee handbooks to ensure current policies are being followed. Revisit and Reinforce Your Corporate Values Speaking of employee handbooks, now is the time—not the day before the election—to take a good look at your organization’s values and what employee behaviors are and are not tolerated. “You want to support employees,” said Wiener, “but you also need to be prepared for [how you will respond to] conflict.” Once you review your employee handbook, it’s important to figure out how the company will act if one of those values is violated. “Leadership needs to decide if they have zero tolerance or if they will put an employee on probation, and they need to be consistent.” Get Input From the Legal Department But Don’t OvercorrectShould you involve legal? Yes, says Wiener. “It’s important to be prepared and understand what you can and cannot do.” Scenario planning, she says, is critical. Ask yourself: How will either election outcome affect my products and services (supply chain, tariffs)? What are the risks and mitigants (for any immigrant workers)? How will employees be impacted (job productivity, mental health)? How might you handle immigration issues, or a harassment claim? But don’t go down a legal rabbit hole. Alison Taylor, a clinical professor at New York University’s Stern School of Business and author of Higher Ground: How Business Can Do the Right Thing in a Turbulent World, weighs in with a word of caution:“The main thing I’m seeing out there is that corporations are overreacting to advice from their legal teams, and dialing back on DEI and ESG because they fear legal retaliation under a Trump presidency,” said Taylor. “But they seem to have forgotten how angry the public and employees were over issues like climate change and racism under the last Trump presidency.” She continued: “A laser focus on legal risk is not a good idea. There needs to be broad scenario planning, certainly caution over sustainability commitments, but also care and restraint about overreacting to rhetoric from either side.”Jenny Sucov is a journalist and editor who focuses on health and well-being. She has worked for companies and publishers including Hinge Health, EverydayHealth.com, Canyon Ranch, Real Simple, and Prevention.(Feature photo by Adamkaz/iStock by Getty Images)

What Makes Skills-Based Hiring the Most Effective Approach

Many positions remain vacant in the workforce, even though there are qualified workers available, which is why many companies are removing degree requirements and relying heavily on skills-based hiring. During a From Day One webinar, Dan Miller, solutions architect for SHL discussed how skills-based hiring is transforming the workforce. In a conversation moderated by journalist Emily McCrary-Ruiz-Esparza, Miller shared why it's a better approach for companies to acquire new talent.While the resume remains an important tool, the days of gaining job candidate’s qualifications solely from a resume are gone. A skills-based hiring approach provides organizations and workers numerous benefits. Hiring managers can look at applicants’ LinkedIn profiles and other accompanying information to learn more about the worker and make an inference. “[Skills-based hiring] involves inferring someone’s skills based on their previous experiences and what’s been posted,” Miller said. In other words, rather than looking at just the resume, managers can look at the bigger picture before they come to a conclusion. According to Miller, the first step to prioritizing skills is removing educational requirements from job postings, which sets the stage for further changes to the hiring process. To further implement skills-based hiring, organizations should define key skills and competencies for each role, use assessments and testing to determine skill level, utilize AI-powered hiring tools, and train hiring managers on what to look for.Companies struggling to keep workers long-term benefit from a 20% higher retention rate over two years when utilizing skills-based hiring, says Miller. Workers gain access to higher paying jobs, and receive an average pay increase of 25% without a college degree. “Given the high costs associated with attrition, skills-based hiring confers business impact even beyond expanding the size of the eligible talent pool or demonstrating a commitment to social progress,” according to the Harvard Business School. “Skills-based hiring strategies are designed for the roles that fall in between those where degreed and non-degreed workers have long labored together and where the degree is a matter of employer preference and not of necessity.” Dan Miller of SHL spoke during the From Day One webinar (company photo)These benefits demonstrate the positive impact of skills-based hiring on both employees and organizations. Organizations implementing skills-based hiring methods are doing so for three reasons: agility, agency, and equity, says Miller. Agility involves having employees who can fluidly transition to different areas and positions, enabling companies to effectively utilize internal candidates. Agency empowers individuals to shape their own career paths by recognizing and developing measurable skills for future roles. Equity ensures that all qualified candidates are considered for open positions, helping to prevent discrimination in the hiring process.“There’s overarching reasons that skills are becoming important. Part of it is that roles are rapidly evolving,” said Miller. “It is a shift from work-focused to person-focused,” he said. As companies shift toward skills-based hiring, it's essential to understand the skills necessary for success in each role. Miller said SHL's Global Skills Assessment, which collected data from over 10,000 individuals, identified various skills indicative of success at work. Some companies will need personalized skills to fit their roles and positions. These skills include taking action, striving to achieve, establishing credibility, taking ownership, among others. When skills-based hiring is done right, both companies and applicants experience the benefits. Companies secure capable workers for essential positions, potentially for years to come, while applicants and employees have the opportunity to earn higher wages and develop skills that advance their careers both within the company and beyond.Editor's note: From Day One thanks our partner, SHL, for sponsoring this webinar. Mary Jones is a freelance writer out of Ohio. Her work is featured in several publications including The Dallas Express, NDash, and The Daily Advocate.

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