Why HR leaders are becoming more influential in the C-suite

Recruitment challenges and a renewed focus on employee engagement have afforded people with people skills a more strategic importance
Hr Director Chief People Officer At C Suite Table

The voice of the chief people Officer (CPO) has not always been the most prominent among the executive committee. Prior to the pandemic, it was often the C-suite leaders in more business-critical functions, such as finance or operations management, that held the ear of the chief executive.

But recently there has been a shift. During the pandemic, it was up to HR leaders to devise remote working strategies, find new ways to preserve employee engagement and look after staff’s mental health. And now the lockdowns are over, difficulties with recruitment and employee retention mean talent and people remain top of the list of challenges. Chief executives surveyed by PwC listed labour and skills shortages as one of the top three areas affecting profitability within their industry this year.

As HR issues have become critical to business success, the role of the CPO is becoming increasingly influential. This is reflected in a recent survey of HR leaders from Qualtrics, which found that 74% say they are more involved in their company’s strategic planning now than they were before Covid. So, how are CPOs adapting to this more strategic role and has this given them more of a voice in the C-suite?

Anne-Marie Lister 
CPO, Atom Bank 

The people agenda has never been more important. Having a senior C-suite role, whether that be a chief people officer or HR director, who actually sits in the room having conversations about the wider business is key. It’s going to be people that make the strategy of the organisation a success, so having someone who oversees that part of the business and is involved in the development and implementation of the strategy is vital. 

When I joined the executive team three years ago, I wasn’t expected to just comment on people issues, I was asked to contribute to all decisions, whether that’s the new products we’re launching or the risk appetite of the bank.

There are many organisations that don’t have a CPO and are still successful and profitable, but having that position on the executive team gives confidence to staff that the organisation takes its employee proposition seriously. It was a key role before the pandemic but that period has shone an even brighter light on the reasons why employees are key: without them, the organisation can’t function, let alone be successful. For employees to see that their employer values its people enough for it to be in constant conversation at the top table is really important. 

Recent stories in the news have also highlighted some of the inappropriate behaviour that can happen within businesses when there is not a good organisational culture. This has highlighted why it’s important for staff to be well represented at a senior level. They need to have the authority to flag these issues and call inappropriate behaviour out. Having a CPO isn’t going to stop all of these issues but it will help to highlight it with the executive team at the first possible instance.

Julia Anas 
CPO, Qualtrics 

The global disruption we have seen over the past few years has highlighted the importance of the employee experience to an organisation’s success. During the pandemic, leaders needed to be agile and quickly shift their business operations, from enabling remote working to providing more digital services, for both employees and customers in order to stay afloat. Given the focus on employees, HR leaders became the centre of many high-level, strategic conversations, including those focused on providing support and stability to employees during difficult times – and this trend has continued. 

In fact, around three-quarters of HR leaders say their teams are more involved in their company’s strategic planning now than they were before the pandemic. Companies have realised that without their human capital and without their people, there really isn’t a business. This has created an opportunity for HR leaders to connect to the company’s wider strategy.

Organisations now realise that if you can improve employee engagement, it has a positive impact on the wider business. If HR professionals are able to connect employee experience to wider business outcomes it can help create room for those conversations at the leadership table.

Joanne Payne 
CPO, PIB Group 

In my role, I don’t feel as if I’m a chief people officer, I’m a director of the business. I sit on the boards of all our businesses and I’m involved in every strategic decisions we make. Sometimes, CPOs are brought in to mitigate risk or to make sure businesses are legal from a people perspective, but their opinion should be valued in all decisions.

Expertise is respected but the role of the CPO is not binary in that sense. It’s a role that has become a lot more strategic but that hasn’t just happened post-pandemic. The reason people join organisations has changed significantly over the past 20 years: they want to work for organisations that have the same values and are socially responsible, and they want to join inclusive and diverse teams. It’s not a nice-to-have, it’s an expectation and it quite rightly should be. That’s why the importance of the people function has been elevated.

Sometimes it’s easier in organisations where your product is people. In the financial services industry, people are our number one asset as they drive the economic performance of our business. This makes protecting and securing that asset really important. Businesses have noticed that it’s really hard to hire at the moment, so the employee value proposition has to be spot on. That’s what’s making the CPO role more important in organisations; it’s financially and commercially critical that we have good people in our business. 

CPOs should not feel limited by the traditional remit of the role, when other executives, such as the general counsel, often take a broader view of the business beyond legal. And from an organisational perspective, businesses should be looking to get as much out for their executives as they can. They are expensive and difficult to find, so CPOs can’t be allowed to get away with only talking about HR-related issues. You have to know the business as well as the chief commercial officer. It’s why CPOs have to be upping their game.