CHRO Pulse Survey 2015

Korn Ferry International’s Human Resources Center of Expertise surveyed over 250 Chief Human Resources Officers (CHRO) and human resources (HR) leaders from the Korn Ferry database of top U.S. companies. Delving into a wide variety of issues, including talent development, the most important CHRO competency and Board expectations and involvement, the 2015 CHRO Pulse Survey sheds light on the key issues facing CHROs as they tackle today’s human capital and business challenges.

Through an aggregation of human resources executives’ opinions on critical business issues impacting their companies and their jobs, this survey ultimately reveals a pulse of what is driving HR decisions in the C-suite.

In today’s market, competitive pressure on the business and an increasing need to deliver bottom-line results through the employee infrastructure are increasing the complexity of the HR role. Faced with workforce gaps, employee skills shortages and legislative changes, the need for HR to adapt to new and often unfamiliar environments continues to grow. The CHRO Pulse Survey helps create a clearer picture of the HR landscape by revealing what is keeping HR leaders up at night, and the challenges that are impacting their roles and business strategies.

While the HR function continues to shift to meet new business demands, employee engagement and retention continues to be the biggest concern keeping CHROs up at night. Understanding key drivers of the business and what it will take to make the business successful has become the second most pressing issue for CHROs, followed by aligning HR strategy to the overall business strategy, and a robust, working session with the organization. The survey reveals that CHROs are less occupied with managing increased oversight from the board, M&A integration, building a performing global HR team and serving as a confidant to the CEO.

As HR’s function within the organization evolves, CHROs believe that competitive pressure on the business is the greatest factor responsible for driving increased complexity of the role today. As such, HR leaders say that the most important competency for a CHRO in today’s business environment is tolerance of ambiguity—defined as the ability to work in conditions of uncertainty and change — followed by the ability to make bold, yet informed decisions and the ability to sustain analytical thinking and motivate others.

Building the right culture where people are most engaged is the area that CHROs feel is most crucial to meeting their organization’s long-term, bottom line goals.

As complexity heightens within HR’s role, the need for top talent becomes even more critical to successfully navigate the uncharted waters of the evolving business landscape and challenges it inspires. The Pulse Survey revealed, however, that CHROs are still finding it difficult to hire strong HR talent. When asked why it was difficult to find talent, the large majority of CHROs say that lack of business acumen among candidates is the biggest factor, a trait that is strongly connected with HR leaders’ ability to tackle new challenges.

As talent continues to be an increased priority across organizations, experiential and intellectual diversity is still lacking within the majority of respondents’ companies. However, as CHROs work toward achieving the right mix of talent, they are tackling this lack of diversity by working more closely with department leaders during the hiring process, developing more robust external networking opportunities and utilizing new HR tools to assess current and potential talent.

According to respondents, the primary HR issue that boards are focused on is succession planning, followed closely by executive compensation. Interestingly, however, is that despite the increased importance being placed on talent, CHROs believe only a small percent of boards are focused on broad-based compensation.

The lack of focus by boards on overall workforce compensation puts more financial responsibility on the CHRO. Those surveyed indicated that they work most closely with the financial and operations departments of their organizations, followed by technology/IT.