Good morning!
The role of the CHRO has changed dramatically over the past few years. The days of paper pushing administrators are over, and today’s HR leaders are expected to tackle a wide range of responsibilities from managing employee productivity and return-to-office mandates to company-wide AI adoption. That’s done great things for the role within corporate America. But it’s also leading to a recruiting headache for companies looking for their next HR chief.
More than half (53%) of HR leaders are now C-suite members, according to a new study from the Josh Bersin Company, a research and advisory firm. And 13% of HR leaders are now ranked among the top five highest-paid executives, a significant increase from just 0.5% 30 years ago. The median total compensation for top CHROs at Fortune 500 companies is now around $2.4 million a year, according to a recent report from Equilar, a corporate analytics firm.
However, as the CHRO role becomes more important within companies, organizations are struggling to find candidates with experience beyond the HR sphere.
Most companies lack a comprehensive strategy for prospective CHROs to build the skills they need to be successful in the role, the report found. Because of this, 73% of CHROs are being hired from outside their company, and around 10% of companies are putting non-HR candidates in the top role. That lack of succession planning also means that candidates from within the HR department are 40% less likely to assume a C-suite position compared to those moving into the top role from the business side of a company.
“Executives that want to bring in a really transformational CHRO have to go to a headhunter, because there’s very little succession management and information about what this job is actually like,” says Josh Bersin, CEO of his eponymous company.
As for the qualities that make for the strongest CHROs, the study points to some key characteristics among high performers, which it defines as HR leaders who handle issues like executive management, business strategy, and operations, along with traditional responsibilities like hiring and developing talent.
Nearly all CHROs hold a degree, but those at top corporations are twice as likely to have a doctorate. These executives also often had experience outside of just HR, and 75% have some kind of international experience, such as working at companies with a global footprint.
“What I’m seeing is the domain is changing so fast that the educational and succession management process has not been keeping up at all,” says Bersin. “So the people that now perform the best are people that have more cross functional, multi-disciplinary backgrounds: political science, economics, psychology.”
For companies searching for their next HR leader, Bersin suggests that they think outside the box. After all, he says, the top issues facing CHROs today have “nothing to do with all that stuff that HR people have done for decades.”
Brit Morse
brit.morse@fortune.com
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Watercooler
Everything you need to know from Fortune.
RTO struggles. Employees at JPMorgan Chase are calling on chairman and CEO Jamie Dimon to retain the hybrid-work model that the bank has used for years. —Luisa Beltran
Time off for drinking. In order to attract workers, a Japanese tech company allows employees to drink on the job and offers hangover leave when they indulge a bit too much. —Chris Morris
Mass layoffs. After warning employees about a tough year ahead, Mark Zuckerberg just laid off 3,600 workers, including some high performers. —Sydney Lake
