CEOs Say HR Is Central To Business Success: 5 Critical Shifts (2023)

This is arguably the most challenging time—ever—to be in HR. It’s also the very best. With so many business issues driven by people, talent and workforce, the time is right for HR to finally have a seat at the table.

But despite the obvious requirement for HR’s role to create and sustain a positive and productive future of work, it’s not automatic. Five shifts will pave the way for HR to have brilliant impact and to thrive.

The good news is that 89% of CEOs say HR should have a central role in the business, according to new data from Accenture. The bad news is only 45% of CEOs say they are creating the conditions for HR to lead business growth successfully.

Clearly there is room for improvement.

5 Shifts for HR Impact

The opportunity facing HR is significant.

#1 - Not Just At The Table, Embedded Throughout the Organization

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The mantra of HR for decades has focused on the desire and imperative to be at the table. And this makes perfect sense. After all, the ability to lead, influence, solve and support requires knowledge of the issues and contact with other influencers.

But even more, HR must be integrated, embedded and intertwined with the organization. Knowledge of all kinds of areas will help inform comprehensive strategy. And a strong network of all kinds of influencers will help HR professionals expand their impact as well.

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The Accenture data found the highest performing CHROs were four times more likely to have strong relationships across the organization and especially at the C-suite. They were especially likely to have mutually influential relationships with the CEO and senior leaders of finance, technology, and operations. In addition, they were more likely to have strong skills in leadership generally.

Social capital refers to the resources, knowledge and capability people gain through relationships with others. It is the constructive netting and webbing within and across the organization built on collegiality, trust and reciprocity. It is channels of relationships which provide the opportunity for mentoring, learning, advice and recognition. When individuals and organizations have strong social capital, it contributes to positive feelings about work as well as greater effectiveness.

The greatest influence within an organization comes from both bonding and bridging social capital. HR professionals are well-served to develop relationships within teams and groups (bonding social capital), as well as across teams, bridging throughout the organization.

Think of the best networks as superhighways rather than dirt roads. Dirt roads represent the footpath of one or two team members who travel within and between teams learning and building relationships. But even better are superhighways in which plenty of HR professionals are connected throughout the organization both broadly and deeply—building awareness of issues, contributing as business partners, solving problems and having a place at multiple tables.

#2 - Not Just a Focus on People, Focus on Performance

HR employees are known as the people people. This makes for a strong brand and identity as a profession. But it can also be a liability among business leaders who believe people issues are soft.

Of course, the last few years have demonstrated people-related issues are anything but inconsequential. When the best performers leave the organization, when it’s tough to find great talent, when people don’t come into the office despite leader edicts, when people demand new models of work or when it’s challenging to inspire and motivate people—the whole business pays attention. Or it should.

HR professionals can increase their influence by clarifying the links between people and the organization’s performance. Starting with people and doing the right things for people are best for business results. While the connections may seem obvious, the investment in people-related solutions, technology and strategies may require strong business cases—which HR professionals are best-positioned to make.

The Accenture data found the most effective CHROs had greater skills in both financial acumen and business acumen—a clear nod to the need to be deeply knowledge about the business and the investments which result in the greatest returns.

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In addition, research is demonstrating strong correlations between happiness, engagement, productivity and performance. In the future of work, measurement systems will need to appreciate the links between these and their reciprocal relationships with each other—and recognize and reward people accordingly. HR can lead the charge in organizations which shift from measuring how much and how many to measuring broader sets of more meaningful outcomes for people and organizations.

#3 - Not Just Comfort with Tech, Leveraging Tech

CEOs are prioritizing technology and data. Their number one and number four (out of four) top focus areas for growth over the next three years are enhancing performance and productivity through data, tech and AI and enhancing their companies’ digital core. These were according to the Accenture study.

In addition, the research showed when companies were able to leverage technology, data and people, they benefitted from an 11% top-line productivity premium. This is compared to only a 4% premium when they leveraged technology and data without also incorporating the experiences of people.

Increasingly the core competencies of organizations are overlapping, and a great example is the need to understand the nature of tech, data and people—and how these interact. Increasingly, HR professionals need to develop not just a comfort with technology, but digital literacy and digital agility, as technology emerges and shifts at lightning speed.

HR must embrace and leverage technology within the department, but even more, HR must understand how tech will change the nature of work, workers and workplace. Technology will drive new ways of communicating, collaborating and performing. It will make some jobs unnecessary, it will create other jobs and it will replace portions of still others. HR will be critical in ensuring people’s skills evolve and their work continues to have meaning.

The data reinforces the need. The most effective HR leaders posses the best technology and data skills.

#4 - Not Just Hybrid Work, Fulfilling Work

This period will be the most significant reinvention of work in our experience—based on new levels of awareness and global dialogue about the nature of work. The discussion tends to become wrapped up in when, where and how people work, and certainly hybrid is here to stay. Different regions, industries and jobs will have a range of hybrid models and options, but flexibility and choice will be hallmarks of work going forward.

But more important (and more interesting) is the dialogue about why people work, what they do, with whom they work and for whom they work. This is the dialogue HR can spearhead.

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The talent revolution (aka the great resignation) is the best evidence that the ways work happened weren’t working for many people. Going forward, there is a terrific opportunity to consider (and reconsider) how to ensure work has purpose and meaning, how to create the conditions for connection among colleagues and how to foster learning, stretch and growth opportunities within the work experience. In short, HR has the opportunity to ensure work is fulfilling and inspiring as an important part of life, rather than something to avoid. HR is uniquely suited to ensure this dialogue stays at the forefront of board rooms, C-suites and all levels of the organization.

The data aligns with this opportunity. CEOs reported their number two and three top focus areas for driving growth over the next three years are accessing and creating top talent across the organization and driving connection and collaboration across the organization as well. And the best-performing HR leaders boast especially strong skills in strategic talent development.

#5 - Not Just Strong Culture, Sustained Culture

Unfortunately, the narrative around culture has become negative. As business leaders require people to come back to the office and identify strong culture as the reason, people hear culture-speak as code for an experience which benefits the company and its bottom line, rather than employees.

HR professionals have an opportunity to ensure culture is understood for its power in creating the conditions not only for organizational success, but also for great experiences for people. Culture can be a positive center of gravity for people providing energy and shared purpose. The most constructive, productive and profitable cultures boast inspiring vision and clear direction from strong leaders balanced with opportunities for people to participate and influence. They are characterized by clear processes and systems balanced with adaptability and agility in the face of change.

HR is in a unique position to hear and see across the organization and to connect dots in terms of how the challenges in supply chain may be linked with new approaches to hiring. Or how the barriers in the marketplace are connected with opportunities for development or career growth among employees. This comprehensive view can enable and empower both people and cultures. And again, HR is positioned to have an outsized constructive impact.

The data suggested that the best HR leaders had a propensity for systems thinking—an ability to see patterns and connections and to identify and solve problems across organizations.

This Is the Time

Charles Dickens’ quote is especially apt: “It was the best of times, it was the worst of times.” The recent past and the immediate future may be especially challenging for HR professionals. But these are also terrific times for opportunity. A CHRO at a Fortune 200 company said recently in a webinar, “If you’re an HR professional and you’re not at the table today, you never will be.” It’s a great time to face tough challenges and lead the organization to new solutions.

These aren’t easy times, but they will be the genesis of critical shifts in how organizations create value and in the meaning of work and the experience of people. Good times, important times.

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FAQs

What does a CEO need from HR? ›

Talent management is top of mind. The majority of CEOs, surveyed by Chief Executive, said that they want their CHROs to spend more time finding, retaining, and upskilling great employees. The pandemic proved that people are the key to achievement in business. Finding and hiring them isn't enough.

How HR can contribute to business growth? ›

The Role of HR in Business Growth

Treating your staff well may push your business to new levels, implying that strategic human resource planning is key. The HR's role in enhancing a company's growth and innovation is to design the talent management procedures and organisational atmosphere that support and reward staff.

What should HR focus on in 2023? ›

HR Trends like DEI, hybrid and remote work, employee skills management, employee benefits, company culture, engagement, technology, quiet quitting and focus on retention may represent significant challenges for HR professionals in 2023.

What are CEOs top priority? ›

A study by IBM, meanwhile, found that CEOs of more successful companies are highly focused on finding new ways to grow, including new products or services, new business models, deeper customer relationships, pursuing innovation as a long-term strategy, geographic expansion, and deeper ecosystems.

Does HR have authority over CEO? ›

The HR department can influence the CEO in terms of how to build an effective leadership team based on its expertise in talent management. HR staffers help the CEO design a succession plan that enables the company to develop a cohesive long-term plan.

Why a strong relationship between HR and your CEO matters? ›

It enables organizational transformation.

When your CEO values the relationship with HR — and HR has the opportunity to be a part of the planning, strategy, and development of organizational initiatives — the partnership can lead to organizational transformation.

Why HR is important to the success of a business? ›

A human resource department is also in charge of keeping employees safe, healthy, and satisfied. With proper HR management, workplace policies keep up with necessary protective measures and implementation and provide solutions to issues between team members, avoiding risk for the company and its employees.

How does HR impact business success? ›

HR plays a key role in developing, reinforcing and changing the culture of an organisation. Pay, performance management, training and development, recruitment and onboarding and reinforcing the values of the business are all essential elements of business culture covered by HR.

Why is HR so important? ›

Human resources management is a very important function in every organization. Without human resources management, companies would not be able to effectively recruit and retain employees, improve and enhance the organization, and they wouldn't be able to maintain a healthy, accepting workplace culture and environment.

How will HR change in the next 5 years? ›

Over the next 5 years HR will continue to integrate more technology. For example, new technologies may allow for a focus on real-time performance reviews. Additionally, HR will likely to continue putting emphasis on diverse hiring practices, as diversity in the workplace has proven to be effective.

What will be the role of HR in 2025? ›

In 2025, HR departments will have to understand better how technology is changing to embrace the changing industry standards. The future of HR will be driven by automation and innovation, with little human involvement needed for routine tasks.

What are the top 5 priority values? ›

What Are The Top 7 Priorities To Have In Life?
  1. Your Life Mission. Your life missions are priorities that give you meaning and happiness. ...
  2. Physical Health. Your health is highly crucial and should be first on your list of priorities. ...
  3. Quality Time With Family. ...
  4. Healthy Relationships. ...
  5. Mental Health. ...
  6. Finances. ...
  7. Self-Improvement.

What is a CEOs main goal? ›

CEOs are responsible for managing a company's overall operations. This may include delegating and directing agendas, driving profitability, managing company organizational structure, strategy, and communicating with the board.

What are your top five priority values? ›

Here are the top five things to prioritize in life:
  1. Good health. Health is wealth! ...
  2. Family and Relationships. Be social, dress well, go out with family, go out with friends, and have some fun. ...
  3. Confidence, Self-Investment, and Self-Improvement. ...
  4. Money / Work. ...
  5. Balance of mind, body, and soul.

Why does HR have so much power? ›

The most observant of HR careerists realizes that the power of HR ultimately lies in the ability to influence through building a trusted and respected reputation of discretion, discernment, judgment and business acumen over time.

How much power does HR have in a company? ›

HR's job is to support the company's managers, not to dictate how they operate. Some companies give HR more power than they should – such as letting them control how other departments hire or make promotion decisions.

Does HR have more power than manager? ›

Since the HR directors have the highest role in the human resource's hierarchy and they are the executives of the department, all the managers have to report to them for their work progress.

Why do more HR leaders need to be better business partners? ›

Strategic HR partners can help drive individual, team, and organizational performance by: Connecting HR efforts and initiatives to business goals. Collaborating with leadership to communicate the company mission and strategy. Building HR programs, policies, and initiatives strategically.

Should HR heads be succeeded to CEOs of the organization? ›

Yes.

There is absolutely no doubt that HR personnel can become CEOs of companies. But before answering the question, we should know what the HR or Human Resources department is all about. Also, we need to understand how the career growth of HR happens.

What are three 3 characteristics a successful HR manager needs to have? ›

10 Traits of an Effective HR Professional
  • Organization. Being an organized individual is an essential characteristic to have when you work in HR. ...
  • Effective Communication. ...
  • Problem-Solving. ...
  • Comfortable Making Hard Decisions. ...
  • Enjoy Data. ...
  • Multi-Tasker. ...
  • Kindness and Understanding. ...
  • Strong Ethics.
Dec 9, 2021

What do CEOs want from their employees? ›

Intelligence, energy, and integrity. And if they don't have the last one, don't even bother with the first two,” he recommends. Having integrity is more than just being honest. It also means doing what you think is right for the company, even if it makes you temporarily unpopular.

What CEOs expect HR managers? ›

  • Talent Management & Acquisition.
  • Risk, Governance, HR Effectiveness & Evaluation.
  • Organisation Development, Culture & Change.
  • Engagement & Employee Relations.
  • Diversity, Inclusion & Employee Wellbeing.
  • Business & People Strategy & Performance.
  • HR Operations, Technology & Analytics.
Feb 25, 2022

What can HR do for leaders? ›

HR can help leaders empower their individual teams by equipping them with processes for coaching, training and mentoring within teams. This also involves helping leaders learn how to identify potential future leaders.

What do business want from HR? ›

Human resource management helps improve the effectiveness of an organization. From improving company morale and developing methods to ensure high performance standards to resolving conflicts among employees and ensuring a company stays within its budget, there are many reasons why HR is important for business success.

What do CEOs struggle with most? ›

We have identified five key challenges faced by CEOs newly promoted from within a company and offer our advice for navigating them.
  1. Operating in the shadow of their past. ...
  2. Making tough calls that disappoint supporters. ...
  3. Leading former peers and being less accessible to former reports. ...
  4. Establishing the right pace of change.

What a CEO wants to hear? ›

They want to differentiate their organization in the market. They want to produce in the most efficient and effective way possible. They want to magnetize the very best talent. They want to empower that talent to contribute to company success in a meaningful way.

What are three 3 characteristics a successful HR Manager needs to have? ›

10 Traits of an Effective HR Professional
  • Organization. Being an organized individual is an essential characteristic to have when you work in HR. ...
  • Effective Communication. ...
  • Problem-Solving. ...
  • Comfortable Making Hard Decisions. ...
  • Enjoy Data. ...
  • Multi-Tasker. ...
  • Kindness and Understanding. ...
  • Strong Ethics.
Dec 9, 2021

What are the five major HR trends? ›

What are the new HR trends?
  • Navigating The Great Resignation Landscape.
  • Reskilling, Upskilling, and Flexible Development Opportunities Are Top Priorities For HR Leaders.
  • People Analytics And Automation Are On The Rise.
  • Workplace Diversity, Equity, and Inclusion Stays At The Forefront.
Jan 8, 2023

What CEO behaviors generally lead to success? ›

The CEO behaviors that generally lead to success

Charismatic. Team Oriented. Participative. Humane Oriented.

What are the 3 main functions of HR? ›

The three major roles in human resources are; administrative, change management, and people management. Administrative tasks include hiring and monitoring of employees, managing payroll and benefits, and development of policies and guidelines.

What is the most important role of HR? ›

One of HR's primary roles is managing payment and benefits for an organization's staff. Proper management of compensation, time off, and insurance is what keeps employee satisfaction high. As a human resource manager, you'll be in charge of distributing, communicating, and improving compensation and benefits packages.

What are the three most important functions that HR performs? ›

What does HR do? 7 important functions of human resources
  1. Recruiting, hiring and retaining talent. Talent acquisition is one of the more well-known functions of any HR department. ...
  2. Employee engagement. ...
  3. Performance management. ...
  4. Compensation and benefits. ...
  5. 5. Development and training. ...
  6. Risk management. ...
  7. Audits and legal compliance.

What is the key to success in HR? ›

The right job placement is a vital part if any firm's success. Hiring highly-skilled people is only part of the equation. Positioning the appropriate individuals in the right position is valuable as well. Screening and recruiting highly-qualified workers is a core responsibility of the Human Resource department.

What value does HR bring to a company? ›

Identity: HR can clarify the meaning of purpose, value, and culture. Companies that execute with purpose have greater odds of creating significant long-term value generation, which can lead to stronger financial performance, increased employee engagement, and higher customer trust.

Why HR is the heart of an organization? ›

HR or Human Resources can be considered as the heart of an organization. All the primary employee-centric needs are taken care of by HRs. They make sure that the workflow stays smooth and everyone stays updated with the organization's policies and requirements.

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