The HR function has been undergoing a metamorphosis for the past few years, but the remaining final stages of the transformation have been difficult.
Moving away from its administrative roots, CHROs now have a seat at the table, and are expected to contribute in driving the business strategy. Rising expectations requires new and varied experiences, capabilities and ways of thinking for HR leaders. So, how are CHROs operating in today’s volatile business landscape?
Over 50 percent of CHROs in Southeast Asia do not have an HR background, according to the ‘Developing the Next Generation of CHROs in Southeast Asia’ report from Aon, a leading global professional services firm providing a broad range of talent, risk, retirement and health solutions.
Almost 40 percent within this group have a ‘Mixed’ background, having gained a majority of their experience in a variety of roles such as line HR, business, or consultant. On the other hand, global CHROs don’t have as much variety in their career experience prior to becoming the Head of HR, with only 24 percent having ‘Mixed’ experience.
According to the report, the evolving needs of the business, the volatile economic environment, and the rapid technological enhancements are catalysts for transforming the role of the CHRO.
Jeremy Andrulis, CEO of Aon Hewitt in Southeast Asia, said: “CHROs are now expected to be business-drivers, not just business advisers. With more non-internal HR professionals assuming CHRO roles, it’s critical that in-house HR professionals aspiring to be CHROs broaden their exposure and skills beyond the HR realm. This enables them to think from an outside-in perspective and speak in the language of business leaders. What’s essential is for CHROs to be critical stakeholders in defining the firm’s strategy, and apply critical thinking to drive the business strategy through people programmes within the organisation.”
Behavioural Competencies the Key to Developing a Business Mindset
With an increasing number of CHROs coming from non-traditional backgrounds, there’s a critical need for HR to develop business acumen and capabilities. 88 percent of CHROs identified ‘Thinking Strategically’ as the most important behavioural competency, yet they only rated themselves 3.1 out of 5 on their own capability levels.
Other behavioural competencies in the top 3 are ‘Driving Change’ (64 percent) and ‘Business Knowledge’ (57 percent). Similarly, the CHROs only rated themselves 3.3 out of 5 for ‘Driving Change’ and 3.2 out of 5 for ‘Business Knowledge.’
Na Boon Chong, Senior Client Partner for Aon Hewitt in Southeast Asia, said: “Some of the most successful companies in ASEAN are state-owned or founder-managed. In that environment, there is a larger consideration beyond the immediate commercial ones. Other than professional and business skill-sets, acting as the ‘conscience’ of the organisation is a key to a CHRO’s success. A CEO of a reputable state-owned enterprise calls it acting as an ‘honest broker.’ That is, knowing the pulse and essence of the organisation, and having the courage to disagree and advise the board and/or the CEO when they steer off course in people issues.”