Where will your next CHRO come from?
Internal successors continued to represent a majority of new CHROs in 2019, though that trend has been declining.
While HR professionals can still climb their organization’s corporate ladder to one day become the chief human resource officer, that position is increasingly being filled by outsiders that come with new CEOs, according to Talent Strategy Group’s CHRO Trends 2020 report.
“For the second year in a row, there is a high correlation between chief executive officer and chief human resources officer turnover,” the authors write. “Of the thirty-five new CEOs who came into the role in 2019, 40 percent have replaced their CHRO.”
Related: Where are all the future HR leaders?
Still, internal successors continued to represent a majority (53 percent) of new CHROs in 2019, though that trend has been declining over the past several years and in the future might be surpassed by external successors, according to the report.
“The pathway for a first-time CHRO role still predominantly flows through internal succession with 85 percent of first-time CHROs coming to the role through that path,” the authors write. “For internal successors, tenure within their organization still reigns supreme. Two-thirds of internal successors had 15 or more years of tenure within their company before promotion to the CHRO role.”
For those on the outside who get hired as a CHRO, it’s paramount to have already held that position at their previous employer–as in 82 percent of external succession cases, an organization selected an individual currently serving as a CHRO.
“This reliance on previous CHRO expertise has created a secondary market for sitting CHROs to increase the size and scope of their role,” the authors write. “In 100 percent of external successor cases, the CHRO transferred to a company that was larger than its predecessor company.”
Other key findings include:
- CHRO turnover increases. CHROs realized a 16 percent higher turnover rate in 2019 than in 2018. Nearly one in five (19 percent) CHROs turned over in 2019 implying organizations replace their CHRO every 5.27 years. Larger revenue company CHROs were more likely to experience turnover than smaller revenue company CHROs. The financial and health care sectors combined represented 39 percent of the CHRO moves in 2019, with seven CHRO moves each.
- Female CHROs on the rise. Over three-fourths (78 percent) of the new CHROs in 2019 were female — the largest percentage of female CHROs since the report’s inception. From 2018 to 2019 alone, female representation in the Fortune 200 role increased 12 percent from 60 percent to 67.3 percent overall. This increase is largely due to a number of outgoing male CHROs being replaced with female CHROs in 2019.
- Advanced education is prevalent. All of the new CHROs of 2019 obtained a bachelor’s degree or equivalent. Advanced degrees were 35 percent more common in 2019 than 2018 with 65 percent of CHROs holding one or multiple advanced degrees. Of CHROs with an advanced degree, 86 percent held a master’s degree or equivalent and 22 percent held a juris doctorate degree.
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