What does this mean for HR leaders?
Internal first-timers made up half of this year's appointments for the chief human resources officer (CHRO) role, according to a new report, in a distinct shift in the CHRO profile globally.
The latest Global CHRO Turnover Index from Russell Reynolds Associates (RRA) showed that 50% of all global CHRO appointments between the first and third quarters of this year were internal hires who had not previously held a CHRO role at a public company.
This is the highest level in RRA's eight-year series, whereas the share of external first-timer appointments fell to its lowest, at 14%.
For appointments of experienced CHROs, the share remained relatively stable at 36%, down slightly from the 38% recorded in 2019.
RRA said the findings indicate that the internal first-timer has become the "dominant route" to the top HR role, as organisations make a "clear distinction" in how they assess first-time CHRO talent.
"[Organisations] appear increasingly willing to back someone stepping into the role for the first time when that individual comes from within, but less willing to take the same approach when hiring externally," the index read.
"It is likely that institutional knowledge, cultural understanding, and established credibility may give internal candidates an advantage. Where an external hire is needed, organisations continue to look for proven leaders to compensate for what they do not yet know about the organisation."
CHRO turnover up amid longer tenures
Overall, 126 CHROs have been appointed globally this year, up nine per cent from a year ago, but still in line with the eight-year average for the period between the first and third quarters.
"The relatively stable global CHRO appointment activity comes as CEO turnover also begins to normalise following two consecutive years of record highs, potentially easing one source of downstream movement in the CHRO market," the index read.
The changing nature of the CHRO role is also impacting hiring decisions for the position, according to RRA.
"CHROs are increasingly expected to shape workforce transformation, operating-model change, and the people implications of AI," it said.
"This not only impacts hiring decisions today, but also succession strategies, which must ensure the next generation is being properly prepared for the future CHRO role."
Meanwhile, global departures of CHROs fell 33% year on year, from 121 to 81, as the average tenure extended to 5.36 years.
This is above the eight-year average of 4.86 years and the highest level recorded in RRA's eight-year series.
"The combination points to a shift in the profile of CHRO turnover. Fewer CHROs are leaving than last year, but those who are departing have, on average, spent longer in the role than at any other point in our series," the report read.
Succession planning for CHROs
The findings come amid recent findings of a succession gap for the top HR role in organisations, particularly in North America.
RRA's report underscored that CHROs can take time to develop.
"Future CHROs need meaningful assignments beyond HR: shaping business decisions, leading transformation and taking responsibility for complex, cross-functional work—not simply observing it," it said.
Organisations developing their next generation of CHROs should consider asking the following questions:
- Can they operate as an enterprise leader?
- Can they lead across the seams?
- Can they exercise judgement in ambiguity?
"As the role continues to broaden, organisations will need to start succession planning earlier, develop a wider pool of potential successors and deliberately give them the experiences the future role will demand. Relying on one or two people who happen to have accumulated the right experience is unlikely to be enough," the report read.
