“The Second Loneliest Job in the Business”—5 Things That Are Top of Mind for Silicon Valley CHROs

“The Second Loneliest Job in the Business”—5 Things That Are Top of Mind for Silicon Valley CHROs

Recently we had dinner with 25 CHROs representing a wide range of tech businesses in Silicon Valley. We’d been in touch with many of them during the pandemic, but it was the first time we’d all sat down together as a group in person for quite some time

And it was eye-opening for all involved.

Everyone was eager to receive peer support and build community in person, and we celebrated the heavy lift people leaders have performed in order to keep their organizations together and moving forward amidst challenges related to the pandemic, social justice, the War for Talent, and return to office debates.

Participants were remarkably open about how lonely the CHRO role can be and offered perspective and insights about the challenges they face and what is working for their organizations (and what isn’t). In this way, the dinner reflected many conversations we’ve had with these and other HR executives since the pandemic began.

Here are the five main areas that have been top of mind for these people leaders.

1.????Layoffs are real, but with bounded impact. Tech layoffs have made headlines but their effects vary by organization. Many CHROs tell us the cuts haven’t affected their core workforce, especially when they are driven by strategic shifts such as changing products or geographic focus. Despite widespread uncertainty, people leaders feel good about the future, due to a combination of strong consumer economics (trillions of dollars estimated on household balance sheets), low unemployment , and slowing inflation . But they’ve learned not to take employment trends for granted, for themselves, their organizations, or their industry.

2.????The War for Talent wages on. Despite layoffs, HR leaders continue to face very high competition for top talent, more than in the past seven decades by our estimation. Internally, many executives joined companies for more attractive compensation packages in recent years, but now company valuations have plummeted , making retention more of a challenge and leading to creative compensation strategies such as annual equity grants versus 3-4 year vesting schedules. For external hires, enticing people to relocate has become more challenging, with the rise of remote work. The battle also extends to finding the best HR talent for their teams given the elevated nature of the function and its broader, more complex scope (more on this below).

3.????The tricky challenge of employee activism. When Coinbase?announced they were not inviting sociopolitical discussions at work two years ago, it brought to light the rising tension between the “bring your whole self to work ” movement and a push for political neutrality in the office. The former may have increased engagement in some contexts, but it has also created rifts and tension such as employee and other stakeholder demands that CEOs take public positions on sensitive topics or companies pull out of states or markets with policies some employee groups don’t like. As the Coinbase example suggests—a percentage of employees left the company due to its new policy—there are no easy answers here as many of these topics require principled thinking based on the lack of playbooks.?CHROs are working hard to understand the best paths to take in collaboration with the broader leadership team.

4.????Getting return to the office right. By our observations, about 70% of clients were fully remote a year ago; now 70% are back in the office multiple days per week. The ground of where-we-work continues to shift, with large implications for employees and employers. Many CHROs are seeking that elusive middle ground between fully remote and fully on-site, to get the best of both. They recognize it’s not one-size-fits-all but has to take into account why a given policy may make sense, such as how in-person work builds bonds and promotes creative collisions. For some, it will be driven by what’s best for the customer. Decision-makers also must consider how much office space is needed for a hybrid workforce, to avoid wasted resources. Regardless, the ongoing debate requires thoughtfully setting expectations and recognizing the need for exceptions. Again, this is a fast-evolving issue with no single right answer and one that not all members of the leadership team are aligned on, so is putting the CHRO in the middle.

5.????Crisis management has elevated the role of HR. The pandemic and growing issues around social justice, equity, compensation, future of work, and the other items noted above have meant unprecedented challenges for CHROs in fast-changing organizations. Past playbooks just won’t work in this dynamic new context, so CHROs have been collaborating with their CEOs and other top executives to develop strategies and solutions for tricky issues with a large impact on financial and reputational results. It requires more first-principle thinking, creative problem-solving, data analysis, and intellectual curiosity, which can be both exhilarating and exhausting as CHROs chart new territory. It also means HR executives with more forward-looking, innovative approaches will be in even greater demand.

Overall, our discussions with CHROs have highlighted how challenging and critical their work has become, part of why the position can be seen as the “second loneliest” role in a business, after the CEO. But thoughtful evolution of the CHRO role, with the understanding of and close collaboration with the CEO and other top executives, will ensure people leaders continue to have large, positive impact on their organizations now and in the future.

We look forward to bringing you more insights on the trends and topics here, for collective benefit – stay tuned!