Chief human resources officer (CHRO) services help businesses manage their workforce with strategic HR leadership that can help align your HR strategy with business goals, boost employee satisfaction, and ensure compliance with regulations. In this article, you’ll learn what CHRO Services are, how HR consulting has evolved, why businesses need CHRO services, and how to choose the right ones.
CHRO (Chief HR Officer) services allow businesses to tap into the expertise and guidance of an experienced CHRO without having to hire a full-time CHRO, also sometimes known as the VPHR or CPO (Chief People Officer).
In today’s business environment, having a good, strategic HR capability is no longer an option but rather an integral part of running a successful business. CHRO services have become a critical component of the HR function. In this blog we’ll cover:
The Role of the Chief Human Resources Officer
The Evolution of HR Consulting and CHRO Services
Why Businesses Need CHRO Services
Choosing the Right Chief Human Resources Officers
Now, More Than Ever, You Need a CHRO
What are CHRO Services?
So, what exactly are CHRO services? The capsule explanation is that they involve oversight of recruiting, onboarding, compensation and benefits programs, wellness programs, and employee policies and procedures.
As an alternative to hiring a full-time executive to head the HR department, chief human resources officers can provide these services on an advisory basis — through a consulting agreement to perform high-level strategy, an interim basis. At the same time, the company is looking for a permanent CHRO or a part-time basis for a limited number of hours per month or days per week.
There’s a simple business case for why CHRO services are necessary, and it refers back to the need for strategic HR direction. The common denominator in any company’s innovative genius, scalability, and competitive relevance is the quality of its workforce.
The CHRO is the strategic partner who ensures that a business attracts, retains and develops the talent to achieve its objectives. Chief human resources officers furnish services that drive employee engagement, foster a culture of performance excellence and collaboration, and ensure that leadership knows and supports their employees’ needs and aspirations.
They can anticipate and predict trends in human resource management and deployment and prepare the workforce to adapt to these changes.
That’s the quick-sketch view of who CHROs are and what they deliver to the HR portfolio. Now, let’s take a granular look at what a chief human resources officer does.
The Role of the Chief Human Resources Officer
During the last decade, the chief human resources officer has become just as important and influential within the business world as the chief financial officer (CFO). Both have critical oversight functions: I noted those of the CHRO in the introduction. CFO oversight and tracking responsibilities apply to cash, revenue, expenses, and investment. Companies that don’t have a CHRO may put the CFO in charge of HR, but many CFOs are ill-equipped to keep up with the constant changes in HR.
But before describing the CHRO’s contemporary role, it would help to contrast it with the traditional HR brief.
Thirty years ago, HR might have been mainly an administrative role focused on payroll, benefits, recruiting, and onboarding or offboarding employees. What was lacking was any strategic oversight and vision for the HR function.
But that’s not good enough in an HR environment that has witnessed major – and constant – shifts in employment regulations, social mandates, generational differences, competitive labor markets, hybrid and remote work, and changing employment laws.
Tackling these challenges requires the kind of talent management, culture development, employee engagement, and leadership coaching aptitude that a chief human resources officer possesses.
The CHRO’s strategic alignment of HR with business objectives – something beyond the pay grade of yesterday’s HR executive – is imperative in light of the emergence of generational work style differences and return-to-office mandates that were so heavily influenced by the pandemic.
Employees and managers have to learn new ways to work together and understand each other’s different work and communication styles, motivators, and work-life balance viewpoints. A chief human resources officer can help a company navigate these factors by providing training and implementing HR programs that incorporate the needs and preferences of all generations in the workplace.
The most critical asset CHROs must bring to the table is a business-oriented mindset laser-focused on the key metrics that the board of directors, shareholders, employees, and customers prioritize. The corollary to that is finding and nurturing the talent that can fully take advantage of the digital future and integrating new technologies – particularly AI – into HR functions with a human touch so workers know this brave new world is intended to support rather than replace them.
That’s the role of today’s effective CHRO, but how could HR consulting complement that role? The answer lies in understanding how CHRO services have evolved.
The Evolution of HR Consulting and CHRO Services
Since the role of HR consulting is no longer confined to purely administrative concerns – i.e., the day-to-day maintenance of the workforce resource at all stages of the employee’s company journey – it has morphed into a high-level strategic advice and support function that helps company executives make effective decisions in all areas of human resource management. In other words, it has dovetailed with the core mission of the chief human resources officer.
This kind of executive-level guidance happens:
- Through regular consultations that discuss HR challenges and how well initiatives are progressing
- Personalized senior-leadership coaching to hone communication skills and help manage complex employee situations
- Addressing specific HR issues with project solutions that could include workforce planning, organizational restructuring, or compensation reviews
More businesses are choosing an outsourced CHRO consultant instead of a full-time hire for several reasons:
- Flexibility – You determine how many hours per week you’ll require the CHRO’s time and expertise. You can hire a full-time chief human resources officer later if your company’s growth or budget would justify that.
- Speed and impact – A CHRO consultant can make an impact quickly — in areas such as reviewing and updating the employee handbook, improving the business culture, and ensuring compliance with all pertinent government regulations – so it’s not necessary to endure the usual cumbersome recruiting, interview, offer negotiation, notice period and onboarding process involved with hiring a full-time CHRO.
- Cost – A CHRO consultant may cost less than a permanent hire — especially when factoring in equity, bonus, benefits, payroll taxes, and other general benefits. In some companies, this per-employee overhead can be 125 to 135 percent of the employee’s annual compensation.
- Major change management – Companies that undergo life-changing, transformative events, such as mergers, acquisitions, restructurings, or enterprise-wide digital migrations, can benefit from the expertise that a part-time consulting CHRO provides over an extended but finite period — long enough to carefully steer employees through what can be a tumultuous transition. This chief human resources officer can advise on communication strategies, talent retention, and refitting the organizational structure to sync up with the new business model.
- Specialized expertise – Given the breadth and depth of their knowledge and experience, CHRO consultants can introduce innovative HR solutions, and their external perspective can help companies rethink HR strategies differently than an in-house CHRO. These people may also be familiar with your industry’s best practices and apply that awareness to developing competitive and effective HR policies for your business.
Today’s HR Consulting Services play a critical role in helping businesses gain the HR support they need, whether as a cost-saving measure or to gain more flexibility or specialized expertise. Similarly, businesses are turning to CHRO services to save money, become more agile, and import specialized expertise. However, chief human resources officers must also be able to meet several common but sometimes daunting HR challenges.
Why Businesses Need CHRO Services
All businesses confront several critical HR issues today.
Compliance with labor laws
Complex state and federal regulations and laws present many compliance requirements for businesses, which must keep track of and understand all those mandates and rules. Effectively complying with all these obligations is complicated because multiple stakeholders inside (departments and employees) and outside of the business may have necessary roles to play. Companies also need to know what they must report, how to report it, and the appropriate agencies to receive those reports.
CHROs are adept at managing compliance in several ways. They help companies:
- Stay abreast of and abide by current labor legislation
- Precisely oversee employee contracts and agreements
- Resolve disputes, including those involving litigation, with integrity and fairness
- Adapt companies to a shifting legal landscape so they remain in compliance with it
Talent retention
Keeping good workers in the fold is a tough HR assignment for a lot of reasons, among them:
- Fierce competition for top-notch workers
- Fear of being replaced by automation and other new technologies
- Lack of proper appreciation and recognition from managers
- Inadequate onboarding and training that set people up to fail
- A dearth of career growth opportunities
CHROs can tackle that assignment by creating a workplace environment that nurtures personal growth, recognizes performance, and fosters employment loyalty. They do this, in part, by:
- Offering continuous learning opportunities to support career development
- Installing systems that evaluate performance and mentor improvements
- Developing customized training programs that fit the different ways in which employees learn
- Building compensation and benefits packages that attract and retain the best talent
Culture-building
Developing a supportive, positive culture where employees are motivated and feel they have a stake in embracing the enterprise’s overarching business goals can face significant headwinds. These include people having trouble collaborating, a lack of trust, and problems giving and receiving helpful feedback.
Chief human resources officers can dissolve that negativity, supporting a culture of excellence and innovation that’s built on employee engagement, by:
- Establishing channels for open communication where everyone’s voice is heard and respected
- Developing recognition programs that boost morale by celebrating employee successes, contributions and milestones
- Providing career development paths for professional growth and skills improvement
- Introducing well-being initiatives to encourage a healthy work-life balance and support mental health
Leadership development
The main problem here is with businesses that don’t think leadership development is necessary, either because they assume leaders don’t require ongoing training or that they can learn everything else they need to know on their own. But that’s a prescription for employee-employer conflicts, workplace disagreements, toxic workplaces, and poor morale.
It’s far better to tap a CHRO’s ability to:
- Guide managers in creating a culture of empowerment and responsibility for their workforce
- Encourage decentralized decision-making, where the people on the ground can call the shots and be in a position to take quick actions
- Empower leaders to use digital tools and platforms that promote technology learning, development and integration among employees
- Clearly communicate the organization’s leadership strategies to everybody
Possessing this palette of skills is a tall order for a chief human resources officer, which is why it’s so critical to know what to look for in a CHRO services provider before you hire one.
Choosing the Right Chief Human Resources Officers
When determining which CHRO candidate is the right choice for your organization, there are several important aspects to consider:
Business and financial sophistication
While business and financial concerns typically aren’t part of the HR portfolio, chief human resources officers should be able to create and read profit and loss statements if they’re going to understand how the workforce can best serve business goals and impact its financial health.
Long- and short-term strategic mindset
To see a company’s big-picture landscape – knowing what it needs now and anticipating what it may need in the future – CHROs must be able to think strategically, emphasizing top-level immediate concerns while planning for tomorrow. They can apply a strategic mindset in areas such as succession planning, regional expansion, staffing new offices and departments, and product development.
Boardroom experience
Serving on a board of directors gives a CHRO insight into a company’s day-to-day operational decisions. It also helps them work effectively with the board to balance the needs of multiple employees, departments, executives and other stakeholders. Indeed, knowing how talent management and HR functions affect shareholders is essential for a chief human resources officer.
Data analytics savviness
Given the proliferation of data and the growing expansion and refinement of data analytics, CHROs must be able to use data analytics to guide decision-making, support project-funding requests, and identify talent patterns and trends, performance drivers, and areas for improvement.
Cultural stewardship
The chief human resources officer must be a cultural steward who aligns people with the organization’s strategic objectives. In that sense, the CHRO is:
- A culture leader – embodying organizational values in their words, actions, and decisions
- A cultural innovator – staying current with and implementing the newest trends and best practices in culture management
- A cultural facilitator – ensuring that the culture informs the organization’s reward and recognition systems, aligning the performance management system with the culture, and taking a lead in promoting diversity and inclusion
By getting the right CHRO for your business, you benefit from the kind of effective, strategic HR leadership that is foundational to long-term success.
Now, More Than Ever, You Need a CHRO
Given the increasingly complex and constantly evolving budgetary, compliance, and personnel management challenges facing businesses, it’s imperative that forward-thinking companies invest in the higher-level business expertise that a chief human resources officer can deliver.
After you evaluate your CHRO needs, consider employing an experienced CHRO on an outsourced, fractional, or as-needed basis.
Not only should that cost you less than a full-time CHRO, but it will also provide you with more flexibility to achieve your specific HR goals through a customized approach unique to your enterprise.
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