CHROs and CEOs Look Differently at the Future

IBM just came out with a report on its new survey of more than 2,000 CHROs from around the world. (Full disclosure: I’m one of the report’s co-authors). Among the findings are that the biggest change they are planning for their function is rethinking performance management, and the most important opportunity they see for information technology is the development of individualized learning plans.

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Some of the most important results, though, aren’t in the report. Those concern the differences between how CHROs see the world versus how CEOs from the same set of companies see it.

For example, CHROs think many things are better in their company than the CEOs do. They are more likely to see their leadership as inclusive, collegial and solicitous of input. CHROs are also more likely to think that the company does agile or fast prototyping–a difference that is harder to understand because that is a question of fact. While neither group is particularly likely to report that their company invests in its employees’ skills, the CEOs are even less likely to think that they do (10 percent versus 15 percent for the CHROs).

The most important differences concern the future and the factors they see as concerns on the people front. CEOs are more likely to believe that people skills represent a challenge in the future (65 percent versus 57 percent for the CHROs), as will changing demographics (37 percent versus 28 percent, respectively). It’s certainly possible that the CEO is more plugged into a public-policy community that worries about these issues even if they turn out not to be a big concern for individual companies. A few years ago, we saw something similar in the field of education, when the public thought schools were going to hell in a handbasket–amplified by stories in the press–but also perceived their own schools as just fine.

But the biggest differences in the report had to do with future plans, with the CEOs thinking there would be more need to rearrange teams, hire for new skills and train than did the CHROs.

The reason this is interesting has to do with the debate as to why we aren’t seeing more progress in HR investments and practices. One of the arguments we often hear is that the constraint is with top leadership–that they just aren’t aware of or interested in workforce issues. The evidence above suggests otherwise: that the CEOs are, at least on these issues, more concerned about workforce challenges than CHROs. They also seem more persuaded that some investments are needed.

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Presumably, this is good news if you are in human resources. It means that there may be an audience in the CEO who is reasonably receptive to the notion that workforce issues are important and that change is warranted.

I suppose another way to look at all this, though, is to focus on the CHRO responses. How could it be that CHROs are less concerned about these issues than CEOs? One view might be that those issues really aren’t that important, and the CHRO has better insights on them than the CEO. Another possibility is that CHROs just don’t want to take these issues on. If you are running the HR function, of course, there are already a ton of things to do and big constraints on your resources and time. It is certainly easier to keep things running as they are. Maybe there’s a lack of ambition at play?

It’s certainly true that the lack of receptivity to people-management issues in the executive suite over the last generation has been a big hurdle to overcome. But maybe that has changed. Maybe we are holding back change now by assuming efforts to address HR concerns will be shot down.

Peter Cappelli, Wharton
Peter Cappelli
Peter Cappelli is HRE’s Talent Management columnist and a fellow of the National Academy of Human Resources. He is the George W. Taylor Professor of Management and director of the Center for Human Resources at The Wharton School of the University of Pennsylvania in Philadelphia. He can be emailed at [email protected]