CEOs, You’re Not Asking Enough Of Your CHRO, And It’s Hurting The Business

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Smart CEOs are hungry for data because it helps them make better decisions. To get their fix, they’ve gotten used to leaning on the chief revenue officer, the chief marketing officer and certain other members of the C-suite.

The chief human resources officer (CHRO)? Not so much, and that’s a liability. This isn’t meant to diminish the contributions of today’s CHRO, whose skills and efforts deliver much value for the business by making it run more efficiently and improving the employee experience. But in other respects, their contributions leave CEOs wanting.?

Take mergers and acquisitions, which focus on synergies, the financial gains from combining two businesses. Often, that involves letting people go . Because the typical M&A deal doesn’t drill down into people data — pinpointing which employees contribute the most — plenty of talent can get lost in the shuffle.

As the co-founder of a company that helps businesses use data analytics to see how their people drive results, I know there’s a better way. In some ways, HR remains stuck in a time warp, still clinging to the old days, when it was all about compliance and admin. But increasingly, it needs to focus on business outcomes.

Just look at what’s happened with other departments, which have changed with the times. In the past, we called it accounting. Now, it’s finance, whose emphasis on financial planning and analysis (FP&A) makes it the operational pulse of the business. In the past, we called it tech support. Now, it’s customer success, which has moved on from fixing problems to driving revenue by adding value for clients.

HR is still HR, and it must make a similar leap. That starts with the CEO asking more of their CHRO. The CEO needs to ask — and the CHRO needs to answer — a fundamental question: How are people impacting our business?

That exchange could go a long way toward helping the two build a better relationship. In a recent survey , almost nine out of 10 CEOs said the CHRO should play a key role in ensuring long-term profitable growth. But at the same time, less than half of CEOs said they were creating the conditions that would make that shift possible. For CHROs, answering the people impact question is one way to close the gap. Here’s how they can do it.

The old way of doing HR — and a new way forward

Despite all the value they’ve delivered over the past two decades, many CHROs and their teams are still failing to connect the dots between people and business results.

Yes, organizations have benefited from HR’s streamlining and automation of workflows, plus the creation of a digital toolkit for everything from payroll to sourcing talent. Besides saving time and money, those advances make life better for employees. But HR is still inward-looking, hung up on internal processes and policies, none of which move the business needle alone.?

Reflecting that bunker mentality, HR teams have their own lingo — terms like “abandon rate ,” “broadbanding ” and “purple squirrel ” — used nowhere else in the organization.

For too long, HR has also focused on its own KPIs, using siloed numbers. To me, providing an employee engagement metric, for instance, is only a partial solution. What does engagement actually mean? On its own, it has nothing to do with business results. Likewise, when viewed in isolation, employee turnover is a useless figure.?

The bottom line: This isn’t language that the CEO and the rest of the C-suite speak.

That disconnect has consequences. For instance, most managers go to HR when they want to fire somebody. If HR spoke the language of business, it would be much easier for a manager to talk to them about improving that employee’s performance before it became a problem.

To move things in a new direction, the CHRO must step out of their comfort zone. Ideally, they should be the orchestra conductor for the C-suite, keeping their fellow executives up to speed on how people impact the business. That means speaking everyone else’s language. To do that, the CHRO must come to the table armed with data and actionable insights that directly connect people with business results.

For example, it isn’t enough to report 15% turnover on the sales team. What’s the dollar impact of that churn, and how does it affect the company’s revenue goals? Using data from the CHRO, the C-suite should also be able to dive into each sales rep’s performance to determine who’s excelling and who’s holding the team back.

The payoff from putting those numbers to work can be substantial. B2B companies that use data to drive sales report above-market growth — and boost their earnings by 15 to 25%.?

"What’s important isn’t knowing how to crunch the numbers but asking the right questions and having the right team to deliver answers. To that end, the CHRO can turn to the company’s people analytics leader and other experts for guidance."

How CHROs can get out the people impact message

For CHROs, delivering that information effectively calls for a thoughtful and deliberate approach.

First, they must share data with decision-makers regularly. Just like CFOs often release monthly statements showing the company’s financial health, CHROs should keep people data top-of-mind for the rest of the C-suite by settling on a consistent cadence.

But at the same time, the CHRO shouldn’t overwhelm the CEO and other executives with numbers. Instead, they must be a curator, carefully choosing what’s relevant to a particular department or business need. If the company is focused on how AI will affect productivity and staffing levels, for example, curate and highlight any data that speaks to its impact.

Telling the story behind the numbers is crucial, too. Whether it’s employee turnover or hiring forecasts, CHROs can never assume their audience will grasp a data point unless it’s in context. So, the company plans to boost hiring by 10% next year. How does that compare with the recruitment climate for the industry at large, or even for individual competitors?

CHROs must also make people impact part of the culture by using company meetings and presentations to highlight key data. Here, they can follow the lead of the CMO, who shares data about things like sales pipeline, customer acquisition costs and return on ad spend.?

Technology helps CHROs and their teams be proactive with people data. Under the old way of doing things, a departing employee might end up as a number in the next quarterly report. But now, using a data analytics platform that offers real-time insight into how team members are doing, HR can get an alert that someone is disengaged. That lets them step in and confront the problem. Even better, perhaps they can also avoid losing two other folks whom analytics reveals to be closely connected to that person.

For some HR leaders, all of this emphasis on gleaning insights from data might sound daunting. Fair enough. I know that not every CHRO comes from an analytics background, nor should they have to.?

The good news: What’s important isn’t knowing how to crunch the numbers but asking the right questions and having the right team to deliver answers. To that end, the CHRO can turn to the company’s people analytics leader and other experts for guidance.?

AI is making much of this analysis more accessible, too. For example, CHROs can use a conversational AI assistant that lets them pose questions in plain language. “Which of my employees are most likely to leave?” Here’s your answer, with a handy graph, showing not only the list of at-risk employees, but also a weighted ranking of the reasons they might quit.

It also helps that CHROs and chief people officers are hungry to learn, in their own department and beyond. Four out of 10 say they wish they’d known more about HR data analytics when starting in their role, as well as areas such as finance and operations.?

Today’s CEOs are expecting their CHRO to start thinking — and talking — like a businessperson. That means asking not just how the business impacts people but how people impact the business. The ability to provide these answers, in the language that the C-suite understands, heralds an exciting and empowered new chapter. Seen as a profit center, no longer merely a cost center, HR moves from the periphery to the midst of business decisions, with the CHRO driving planning and decision-making alongside the CFO, CMO and other leaders.

Thanks for reading! I'd love to hear what you’re seeing in your own industry, so please share your thoughts into the comments below. For more news and ideas around people data in the workplace, be sure to subscribe .

(A version of this post originally appeared in Forbes ).