Featured in People Management
Recent research highlighted by People Management found that almost half of newly appointed CHROs now oversee responsibilities beyond the traditional HR remit.
While HR has long been described as a strategic business partner, the reality is that many organisations are only now beginning to fully recognise the commercial influence people decisions have on organisational performance.
Reflecting on the findings, Gemma Bullivant shared her perspective with People Management:
“Every major business decision has people implications, and every people decision has commercial implications.”
HR’s Strategic Influence Is Growing
The findings are encouraging and reflect a shift many HR leaders have been advocating for years.
Organisations are increasingly recognising that workforce decisions cannot be separated from commercial outcomes. Decisions around talent, capability, leadership, organisational design and culture directly influence growth, productivity, transformation and performance.
Yet it remains surprising that in some organisations, the person responsible for optimising the most expensive resource on the balance sheet – its people – is still not consistently represented at executive level.
The expansion of CHRO responsibilities suggests that this may finally be changing.
Rather than being viewed primarily as functional specialists, HR leaders are increasingly being expected to contribute to broader business conversations and strategic decision-making.
The Rise of the Commercially Focused CHRO
One of the most interesting findings from the research was that only 26% of newly appointed CHROs came through traditional HR pathways.
This suggests organisations are placing increasing value on broader business experience alongside HR expertise.
Future CHROs will need to be as comfortable discussing strategy, technology and commercial performance as they are discussing talent, engagement and culture. This is something I regularly explore through my executive coaching for senior leaders.
The most effective HR leaders have always understood the connection between people and business performance. What is changing is the expectation that they can actively shape both.
How AI Is Accelerating the Shift
As transactional HR activity, governance processes and administrative tasks become increasingly automated, the value of HR leadership will continue to shift.
The future contribution of HR leaders is likely to centre less on process administration and more on areas such as:
- Organisational design
- Workforce planning
- Change leadership
- Leadership capability
- Employee experience
- Understanding the psychology of human motivation
These are areas where human judgement, influence and strategic thinking remain critical.
What Skills Will Matter Most?
For HR leaders aspiring to executive leadership roles, the capability profile is expanding. Alongside strong people expertise, the skills likely to become increasingly important include:
- Commercial acumen
- Systems thinking
- Data literacy
- Strategic influence
- Change leadership
- Organisational effectiveness
- Emotional agility
Perhaps most importantly, HR leaders need exposure beyond the HR function itself.
Understanding how the organisation creates value, how decisions are made and what drives commercial success will become increasingly important for those seeking to operate at executive level.
The Strongest CHROs Will Help Shape the Future of Business
As organisations face increasing complexity, rapid technological change and evolving workforce expectations, the influence of the CHRO will continue to grow.
The leaders who create the greatest impact will be those who understand both people and performance, and who can connect workforce decisions directly to business outcomes. They will bring commercial thinking, organisational insight and leadership expertise into the conversations that shape the future of the organisation.
This is a theme I explore regularly through my work with senior leaders, HR teams and organisations navigating change. For HR leaders aspiring to broader business leadership roles, this connects closely to a theme we explored in Series 5 Episode 1 of The Strategic Leader Podcast: the three hats of leadership and the importance of balancing functional expertise with enterprise-wide thinking.
