Female CHROs in greater demand

While men easily make up the majority of executive positions in the corporate world, a recent report finds more women are taking up the role of CHRO at Fortune 200 companies.

Seventy-eight per cent of new CHROs in 2019 were women, found the Talent Strategy Group. That’s up from 65 per cent in 2018 and 67 per cent in 2017.

And from 2018 to 2019, female representation increased by 12 per cent, to 67.3 per cent from 60 per cent overall.

“The CHRO role continues to be what I would call a beacon for female representation on executive teams: The majority of the CHROs are female,” says Zac Upchurch, COO at the Talent Strategy Group in New York and author of the study.

“The pronouncement of female representation is a really fantastic one, especially in light of perhaps less-than-optimal female representation and executive teams across these Fortune 200 companies.”

Welcome change in ranks
For one CHRO in British Columbia, the numbers represent a welcome change.

“What resonated for me is probably about five or six years ago, I remember going to a CHRO event. And literally I walked in and it was all men in suits. My first thought was ‘Where did all the women go?’” says Leslie Mitton, CHRO at the Insurance Corporation of British Columbia (ICBC) in Vancouver

“HR is primarily female. But, all of a sudden, when you get up to senior roles, it was all men.”

More recently, she’s seen a change.

“I’ve seen the visible shift year after year going back to the same event and now you’re starting to see some of those CHROs retire and I think now there’s a different generation of CHRO and it’s visible, the difference in the number of females going into those roles.”

Some biases remain in some organizations’ hiring practices, according to one Toronto recruiter.

“There are certainly some clients — whether they say it or whether they look at you [a certain way] — that would prefer a woman over a man in that role when push comes to shove. Whether they’re right or wrong, it just happens to be and it is natural that more women, generally speaking, have always tended to have softer, more interpersonal skills when it comes to people,” says Randy Quarin, a senior partner at IQ Partners.

But because of post-secondary school populations, the level of women occupying C-suite jobs will rise in the years to come, he says.

“As we all know, in the last 10, 15 years, a lot of those females have a far greater number of postgraduate degrees than men have, which has given them the ability to now be at the table to have a choice of getting the job. Before, they didn’t have the degree to complement that.”

External recruitment rises
The report also found fewer internal candidates are replacing the departing executives: 53 per cent of new CHROs were hired internally, which continues a downward trend from past reports (61 per cent in 2018 and 70 per cent in 2017).

However, the pathway for a first-time CHRO role still predominantly flows through internal succession, finds the Talent Strategy Group, as 85 per cent of first-time CHROs come to the role through internal succession.

And, for these successors, tenure within their organization is still important: Two-thirds of internal successors had 15 or more years of tenure within their company before their promotion to the top role.

“We’ve likely made progress, perhaps in CEO roles, but as we’re looking at our own ability to succession plan, for whatever reason, we’re seeing that decline in that internal CHRO succession and a desire or aspiration, perhaps, to go more externally within that space,” says Upchurch. “I would hope that we are looking internally to ourselves and saying, ‘How are we developing our own folks in the HR space and are we setting up people one level or two levels down in the organization to be successful?’”

This trend is not new, says Quarin.

“That’s what I’ve seen before, where you’ve got a depth of people with experience that you can look at and go, ‘OK, we’ve got to pick from three of them here because they’ve all been chomping at the bit to take this position over,’ [but] there’s a lot of companies that probably want somebody from the outside that brings in two or three experiences or qualities that they haven’t had before,” he says.

“For example, when we get asked to do senior-level HR searches, most of them now want somebody that generally has luxury-brand experience versus automotive experience.”

Another possible reason is embedded within the general culture of HR, according to Mitton.

“People tend to go into silos in HR: There’s people who go into recruitment, there’s people who go into labour relations, there’s people who go into pension and benefits and into people and culture work. What I’ve seen is people go into those roles because they love that work, but they don’t necessarily want to bridge across other disciplines within HR.”

To be a fully rounded and successful CHRO means familiarizing yourself with all aspects of the core business, not just narrowly inside human resources. It ranges anywhere from bargaining a collective agreement to overseeing a pension plan, which are large, substantive parts, she says.

“The person that’s in OD [organizational development] doing people in culture is really not interested in bargaining or collective agreement or compensation as an example,” says Mitton. “You have to have people who are curious and are interested in the business, not just the business of HR.”

CEO and CHRO closely aligned
The survey also highlights the effect CEO churn can have on CHROs: 19 per cent of CHROs left their jobs in 2019, representing 16 per cent more than in 2018. And of the 35 new CEOs ensconced in 2019, 40 per cent replaced the CHRO, says Upchurch.

An internal CEO successor was two-and-a-half times more likely to replace the sitting CHRO in 2019 than an external CEO successor, finds the Talent Strategy Group. When hiring a new CHRO, an internal CEO successor was more likely to look internally than an external CEO successor. An internal CEO replaced the sitting CHRO with an internal CHRO successor 64 per cent of the time, while an external CEO replaced the sitting CHRO with an internal CHRO successor only 33 per cent of the time.

“One of my emerging hypotheses is that a new CEO coming into the organization provides an opportunity to essentially reset executive teams. It’s probably not unique to the chief human resources officer role; it’s a natural changing of the guard that comes into play,” says Upchurch.

But it’s the “unique relationship” between CEO and CHRO that may also be a major reason for some of this turnover.

“The trust and the personal relationship is different than it is with some of the other functions like finance or marketing or IT, some of the other disciplines that are in the C-suite, and because of that, there’s a trust level,” says Jon Hamovitch, senior vice president HR at UJA Federation of Greater Toronto.

“There is a unique relationship, typically, between this HR role and the CEO role, which is different from many other people on the executive team [in terms of] the nature of the discussions that you have, because you’re often talking about your peer group; you’re the one person that gets to [provide] input on your colleagues.”

C-suite executives moving out during a change cuts both ways, according to a former CHRO.

“We’ve experienced it with our peer group from a different perspective, which is actually it’s HR professionals who have chosen to leave when they have a new CEO in place,” says Suanne Nielsen, president of the Strategic Capability Network (SCN) in Toronto.

“It’s not like the CEO came in and gave them the boot because he wanted his own person or he wanted something different in the role. Our experience has been where there’s been a change of CEO and the HR professional is taking the initiative that ‘I’m not sure this is something I want to do. This isn’t someone I really want to work for.’”

INTERNAL RECRUITMENT DECLINES

53%
Number of new CHROs hired internally in 2019

61%
Number of new CHROs hired internally in 2018

70%
Number of new CHROs hired internally in 2018

83%
Number of new CHROs with HR experience

Source: Talent Strategy Group