Companies must depend on their chief human resources officers (CHROs) in creating corporate values necessary to achieve success. But more CEOs rarely understand the true position of their CHROs, let alone giving them the necessary backup to operate in the required capacity. This breeds dissatisfaction of CHRO roles and HR functions in general. Most CEOs rank HRs as the eighth most important function in their organization, according to a research by McKinsey. That’s absolutely wrong.

The HR is supposed to be a true partner to the CEO, just like the CFO. The CHRO functions should be recognized as imperative in building and assigning talent and as the appropriate channel to unleash the organization’s workforce in the most productive sense. While becoming a CHRO requires a step beyond administrative roles and clear knowledge of the business, CEOs have the obligation to elevate the HR, enable the CHRO to become a strategic partner, and to adopt the G3 system – a tier comprising the CEO, the CFO and the CHRO as a top corporate unit fundamental in decision making.

Here are the essential CHRO roles every CEO must support –

1.     Predicting outcomes

Leaders are often eluded by the gap between job requirements and talent engagement. Because organizations depend on a fair balance between workforce and jobs to be efficient, the CHRO skills are largely required to model job requirements and realistic assessment of the individuals assigned to perform the duties. Though coaching is a vital tool in helping employees to achieve their full potential, it has its limits. The role of the CHRO should involve reconciling this gap using predictive skills. The CHRO also has the mandate to work with the financial officer in assigning paychecks to the employees based on how much they contribute to the company.

Predicting outcomes means weighing how balanced the manager is with respect to workload and opportunities, how fast he can scale up into digitization, and how flexible he can handle situations during a bad economy. Predictions should also include the impact of changes in human resources at rival companies. Designing the specific metric requires a huge contribution from the CHRO.

2.     Prescribing revenue-generating actions

Smart companies move their resources to where they have more opportunities. McKinsey found that companies that shifted more than 56% of their capital across businesses recorded 30% more returns while studying resource allocation pattern of more than 1,500 US companies over 15 years.

CHROs should recommend actions that will create or generate returns. These could be by moving employee positions, recognizing hidden talents or bringing external individuals to develop capability in a new technology. The reassignment of employees is a crucial aspect of capital relocation.

3.     Diagnosing problems

The CHRO is in position to identify reasons why an organization may not be performing well or fail to meet its goals. Such analysis should be provided by CHROs and not consultants. The CEO and CFO should work with the CHRO to establish the causes of misses in relation to the company’s social system such as how people work and not necessarily external factors. Diagnosing this accurately would provide the right remedy which could be employee reassignments or replacements.

Conclusion

As CEOs and CFOs make projections for a one-year budget and a three-year plan, the CHRO should not be outside these projections. Becoming a CHRO means the individual should be able to assess the chances of meeting these goals by equating them with the available human resources. The CHRO roles include the above-mentioned duties and the usual HR functions.

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