The CHRO as the new X-factor in the Exec team

Who should lead the new talent war for your organisation to thrive in the future?

At one point or another during the Covid-19 pandemic, many employees realised that their relationship with work had become a bad relationship. And so “the great resignation” started.

In this blogpost I want to highlight how this is triggering an existential crisis for the modern organisation, and how solving this crisis will require a complete redesign of the organisation’s operating model; a redesign that can only be led by a new X-factor in the Executive team: a new breed of Human Resources leader.

Our relationship with work

I had an awakening during the long lockdowns in Melbourne, a new clarity on what I wanted my work life to be. And I’m not the only one apparently. Lots of employees across the world had an awakening as Covid-19 suddenly stopped the hamster wheel they were stuck in for a few weeks or months, depending on where they were. And the big realisation was that this non-stop run and this long daily commute was leading them nowhere. One day they woke up and could no longer escape the realisation that their relationship with work was in fact a bad relationship.

And that’s how what we now call “the great resignation” started. This is bad news for leaders. One more challenge to add to the list. As if they didn’t have enough on their plate with the recovery from Covid, a potential recession, new risks to mitigate ranging from political unrest to ecological collapse and cyber-attacks. Moreover, this talent challenge poses no less of an existential threat.

How come it took us all by surprise though? After all, one Gallup engagement survey after another has been highlighting low levels of employee engagement. It’s been obvious for a while that traditional companies are losing the hearts and minds of their employees. We all knew but did little to change things… as if our collective answer as leaders to disengaged employees was just “suck it up princess.” But it looks like employees have finally had enough. The whining has stopped, and the exodus has started.

When you look close enough you realise that for many organisations the situation is even more critical: not only can they no longer keep existing talent, they can’t attract new talent either. Many traditional organisations are losing the talent battle at both ends.

The new talent war

Some companies are well aware of what’s at stake here and are pulling out the big guns to secure the talent they’ll need in the future. Earlier this year it was reported that companies such as Canva, Amazon, Google, Atlassian and Jane Street are paying graduates salaries up to $350,000!

But it would be a mistake to think that money is the only solution here. There are many other things that those companies offer to attract talent. Every leader would be wise to unearth the most common reasons why employees are leaving organisations. After all, it’s hard to fix a problem that you don’t fully understand. The below visual shows the top reasons why employees are leaving workplaces according to a recent McKinsey study.

Screenshot 2022 11 28 at 4.18.32 pm

When you consider the types of reasons mentioned such as “uncaring leaders” or “lack of meaningful work”, it becomes obvious that winning the talent game is not going to be a quick exercise. It’s going to require the ability to design and navigate a transformation of a company’s culture, ways of working and operating model, that will make it radically different from its starting point. Not to mention the personal transformation required from those “uncaring leaders”.

Who can lead the change?

Allow me to digress for a minute. The leader overlooking tech in a large organisation in 2022 bears little resemblance to their predecessor from the nineties. If you had asked the CEO back then what his key expectations from their IT Director were, it’s unlikely that those would have been highly strategic. As long as emails were working and the lights remained on, the IT Director, who was often not even part of the Executive Team, had little risk of being engaged by the important people. The challenges and opportunities of the digital revolution changed that picture completely. In 2022 the Chief Information Officer or Chief Digital Officer sits proudly at the leadership table where she leads some of the most strategic discussions across the organisation.

Following the example of IT Directors 15 to 20 years ago, will HR Directors find a way to reinvent their role and step up to the employee challenge?

While HR Directors might have sometimes felt in the past that they were on the small stool at the end of the leadership table – compared to Heads of Business Units or the CFO for instance – the times now call for a truly powerful CHRO. To succeed in 2023 and beyond, every CEO will need an absolute A-player to lead Human Resources.  

So, welcome CHRO 2.0, a leader who understands the magnitude of the ongoing employee existential crisis, can connect with employees, make sense of their situation, and lead or facilitate the transition that will make the organisation one where people aspire to work. 

For a deep dive into the challenges of the CHRO 2.0 role and how to approach the changes required to improve employee experience, the operating model of organisations and our own leadership practices, watch out for the next blogpost by my colleague Rhonda on the Five Key Enablers for the CHRO in 2023.

The great resignation has made obvious the existential crisis the modern organisation faces. Solving this crisis will require a complete redesign of the organisation’s operating model; a redesign that starts with leadership and the critical role of the CHRO. In our opinion, there’s never been a more challenging and exciting time to lead Human Resources!

Author

Fred Etiemble headshot with The Invincible Company book
Frederic Etiemble

Executive advisor on strategy and innovation. Co-author of The Invincible Company, a guide to build resilience in organisations with corporate innovation, and shortlisted for the Thinkers50 Strategy Award in 2021.