Rise of the human capital function

In recent years, the human capital function has not so secretly become one of the most critical and highly valued areas of business, moving from back-office support to a front-end strategic role in driving organizations forward. That trend continues in 2021.

At Charles Aris Executive Search, we continue to see organizations upgrading the function by bringing on more strategic human capital leaders. Many CEOs increasingly view chief human resources officers as one of the most important – and sometimes the most important – leaders on their senior leadership teams.

There are many reasons why, but the biggest factor may not surprise you: people. More and more organizations are realizing that people are their greatest asset. Getting the right people in the right seats is important for any organization, but it doesn’t stop there. Employee engagement and development are crucial for driving results. A more engaged workforce tends to be a more productive workforce, and leaders are realizing that now more than ever.

Another key factor in the ongoing rise of the human capital function is strategic leadership. As CEOs and senior leadership teams set the strategic plans for their organizations and think about where they want to be in the next three to five years and beyond, they increasingly understand that the right CHRO will align a human capital strategy with the business strategy to better meet those goals and objectives. While the term “business partner” gets thrown around a lot these days, it’s a true reflection of the CHRO’s relationship with all senior leaders.

As executives recognize the rising value of a strategic human capital function, they realize that the right CHRO will be as much an advocate for their organization as they are an advocate for their employees. Not to say that HR is no longer “all about the people,” but we’re seeing increased demand for CHROs who are organizational leaders first and HR leaders second. The CHRO really serves as a liaison between an organization and its people, helping both sides achieve their goals and do what’s right.