CHROs on Boards Help Companies Increase Talent Engagement

Listen to article

The need for hiring and retaining key employees has pushed HR to the leadership forefront.

The pandemic brought on the rise of several workforce issues that sat below the surface for many years. Now these issues can’t be ignored, since the environment has become more complex, with some employees experiencing burnout, while others are choosing to disengage or rapidly switch jobs. Then there’s the problem of cultural unrest, with employees increasingly seeking employers who stand behind them on a range of social issues.  


The Prominence of HR

A public company is judged largely on its stock price, but its most valuable asset is its employees. The changes taking place in how a new generation of workers evaluates their employers has given prominence to the role of the chief human resource officer (CHRO). HR is no longer an afterthought. Given the risks companies now face in securing the right employees, and retaining them, HR has earned an important place in the C-suite.  

This newfound appreciation for HR has elevated the role of the CHRO. In many situations particularly at public companies, this has taken the form of a board seat.


How CHROs Help Boards

CHROs are helping boards, employers and employees navigate this new era, advising boards and ensuring that employees’ voices are being heard, supported and appreciated. These executives serve as a bridge between employees and board members, especially given their access and ability to openly communicate with managers and articulate their insights to company leaders. 

Human resources was once viewed as an administrative position to check boxes, hire employees and fill out paperwork. It’s now a strategic function and an organizational lifeline. The convergence of cultural and economic trends has led to the redefined role of the CHRO and the emergence of their board presence. This is due in part to the need for more time and attention to be spent on talent management, with 34% of respondents to PwC’s 2021 Annual Corporate Directors Survey saying it is an area that requires increased focus.

Why should a company consider seating a CHRO at the board table? Data analytics has equipped these executives with the capabilities to provide insights into hiring, talent management, labor and turnover costs, employees at high risk of leaving and how to sustain productivity in difficult times. Most important, CHROs are helping boards make key business decisions to promote high-functioning and productive work environments. In turn, companies are strengthened as they compete and pursue their goals.


A Shift in the Workplace

Today, we see dramatic changes in workforce trends that are hard to navigate. According to McKinsey, 58% of Americans have the opportunity to work from home at least one day per week, while 35% say they may opt to work entirely from home. 

This is where the CHRO plays a role in defining a strategic and concrete plan to optimize employee well-being, productivity and company culture. Gallup reports that a resilient company has a successful employee engagement level of over 70%, yet in the United States only 32% of employees feel a sense of engagement – a historically low figure. So, how does a company address this issue?


Recognize the Value of Your Workforce

Organizations have to value human capital on the same level as they do financial capital. They have to recognize that employees are in closest contact to customers, which ultimately affects revenue and the bottom line. With the guidance of a CHRO, the voice of the employee can be woven into critical discussions and decisions that pave the future of the organization. 

While the pandemic and the Great Resignation were certainly catalysts that elevated the role CHROs play in an organization’s success, we’re still in the early innings. Over the past three years, HR departments helped to keep companies alive and boardrooms open. We have to keep moving forward in terms of incorporating the strategic insights CHROs bring to boards and companies.  
Steve Arizpe is president and chief operating officer for Insperity. 

Other related articles

  • The Ups and Downs of C-Suite Compensation

    Published March 16, 2023
    By Bill Hayes

    A new report finds CEO and CFO base salaries increasing but bonuses on the decline.

  • What Directors Are Thinking

    Published March 14, 2023
    By Charles Zimmerman, Ph.D.

    What Directors are Thinking

    Charles Zimmerman, DMin

    Independent Director: 
    Univest, Clemens Family Corporation

  • Don’t Drop the Baton: Talk More About CEO Succession Planning

    Published March 09, 2023
    By Naveen Bhateja

    With more than half of companies failing to plan for CEO succession, the topic needs to become more prevalent at meetings.

    In a relay race, dropping the baton is catastrophic. All the advantages and momentum gained up to that point in the race are lost. Even the most talented teams have a slim chance of recovering from a dropped baton.

  • When the Going Gets Tough…

    Published March 09, 2023
    By Bill Hayes

    To contribute effectively during economic uncertainty, directors need candor, care, curiosity and humility.