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The role of the future CHRO will place greater importance on ESG

The role of the future CHRO will place greater importance on ESG

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The CHRO is expected to shape the corporate voice on social issues, articulate the company's mission and purpose, and communicate the people strategy to more stakeholders.

The events of the past two years — including a pandemic, social issues, and the Great Resignation — have, among many effects, opened new doors for CHROs around the world. Today, CHROs are being called on to play a greater part in addressing environmental, social, and governance (ESG) matters—both the risks and opportunities for companies.

In that vein, a recent report by The Conference Board, based on discussions with over 100 human capital leaders in Asia, Europe, and the US, revealed the increased pressure on companies to act on ESG issues, and the expanded role of human capital leaders in doing so.

Per the report, titled The CHRO's role in navigating the future of work, CHROs will need to — among other things in the ESG sphere — shape the corporate voice on social issues, articulate their company's mission and purpose, and communicate the people strategy to more stakeholders.

Additionally, the report also explores the challenges CHROs must navigate to successfully lead remote and hybrid teams and shape an organisational culture that both attracts and retains workers.

Read on for an excerpt on the key report insights, which include how CHROs will partner with their C-suite colleagues on social issues; ways technology and analytics will guide CHROs as they work towards business goals, and more.

The company’s mission and purpose should underpin not only company culture, but guide decisions about the work environment

CHROs can expect greater intention given to the overall purpose of the business, as well as the strategies used to deliver on that purpose.

This would also involve a strong culture, one where employees feel included, valued, and respected, as well as connected to something greater than themselves — and this will create a competitive advantage in both attracting and retaining talent.

How CHROs and their teams can prepare for this:

  • Clearly articulate both the connection to mission and purpose, as well as new cultural norms for creating a respectful workplace.
  • Develop a playbook on why an employee needs to follow a specific work model, including a clear rationale explaining the requirements to be in the office.
  • Give employees options for flexibility based on personal needs. By offering flexibility, organisations can meet the diverse needs of their workforce and boost retention.

CHROs will partner with C-suite colleagues and the board to help shape the company’s voice on social issues

As companies navigate the complexities of societal change and demands for transparency, CHROs will partner with their C-suite colleagues and the board to help shape the corporate voice on social issues.

The disclosure of human capital metrics and the shaping of the corporate narrative around people issues for a variety of stakeholders — both internally and externally — will become more critical.

The ability to work closely with, and benefit from, board directors in their human capital management oversight role will be increasingly important, the report added.

How CHROs and their teams can prepare for this:

  • CHROs should follow a consistent framework for their formal and informal communications with stakeholders on human capital management.

"The crises of the past few years have underscored why human capital management matters — it’s an essential part of the overall business strategy, including achieving a company’s ESG goals," said Rebecca Ray, PhD, Executive Vice President of Human Capital at The Conference Board.

"Board oversight of human capital management will continue to grow in importance. CHROs will need to ensure that directors understand the organization’s capability to execute the business strategy."

Technology and analytics will guide CHROs as they work toward business goals

The HR function will have a broader impact on people across the organisation (e.g., workforce diversity, predictive analytics) and a sharper focus on business outcomes. CHROs will leverage technology to track and measure progress on metrics related to human capital.

Additionally, roles within the HR function, such as HR generalists and specialty roles, will become more sophisticated as technology reduces administrative burdens.

How CHROs and their teams can prepare for this:

  • CHROs will need to develop new and wider skillsets, including analytics, business acumen, and high-level strategic skills.
  • Leaders should show a greater connection between HR processes and business results: Increase efforts to map talent to value, prioritise strategic workforce planning, and leverage the use of technology and analytics to make better people decisions.
  • Beyond simply ensuring fair and equitable treatment for all workers and alignment with organisational values, evaluate and refine programmes, policies, and actions to foster a culture of inclusion and belonging.

Apart from the above, CHROs should also be able to clearly define roles and responsibilities, streamline processes, and leverage technology to reduce "friction" in processes for employees.

CHROs will lead the organisation toward a seamless hybrid culture, offering flexibility and upskilling

As work-from-anywhere models expand, there will be a premium on the development of tech skills and infrastructure that support flexible teams. Workers will need support to be innovative, agile, and resilient.

How CHROs and their teams can prepare for this:

  • CHROs will need to reimagine the physical workspace, investing in and integrating technologies that promote productivity and collaboration.
  • Ensure teams are empowered to make decisions about how work gets done to maximise efficient time use and foster agility.
  • Hire for specific skill sets, not specific roles, and make mining internal talent a priority.
  • Assess capabilities across the workforce and fill skill gaps by investing in upskilling and reskilling.

Through successive waves of "black swan" events, CHROs will need to rethink leadership development

Successful leaders will need to thrive in virtual and hybrid environments with blended teams. CHROs should articulate the core values and principles of the organisation to all stakeholders, including the board, teams, customers, and suppliers.

Leaders will also be required to champion agile ways of working, drive digital innovation, and shape organisational culture and talent development, per the findings.

How CHROs and their teams can prepare for this:

  • CHROs can look to develop authenticity, empathy, and a growth mindset, coupled with a mastery of HR-related skills such as performance management, coaching, and development.

Additionally, increase the use of skill assessments and analytics to determine and revise criteria for advancement and succession planning.

Importantly, leaders at all levels should be held accountable for turnover, engagement scores, DEI goals, and other key metrics tied to corporate values and purpose.


Photo / 123RF

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