c-suite 2008 A Guide for Human Resources Executives

Transcription

1 The Path to the c-suite 2008 A Guide for Human Resources Executives

2 Executive Summary What does it take to achieve the rank of Chief Human Resources Officer (CHRO)? In an effort to answer this question, the Human Resources Center of Expertise of Korn/Ferry International conducted an analysis of CHRO appointments publicly announced by Fortune 1000 companies in The key findings included: Promotion appears to be the most common route to the C-Suite for HR professionals. More than half of those achieving the highest rank arrived there via promotion. Existing CHROs and senior HR generalists were by far the largest group of professionals to be hired for or promoted to CHRO. These findings are instructive, particularly for mid-career HR professionals who aspire to become CHROs. If promotion improves your chances of attaining that goal, it is important to assess the career ladder of your current organization and act accordingly. If the probability of advancement appears remote, it may be wise to seek a position in a more promising organization. As for the dominance of senior HR generalists among newly minted CHROs, several factors may influence this result. In our practice, we have seen HR specialists, such as experts in compensation and benefits, diversity, organizational development, etc., successfully achieve CHRO status. Because organizations have different position titles, it is possible that these specialties are represented among those holding the generalist title in the public announcements used to prepare our study. Best-in-class HR departments often rotate personnel among the various HR specialties while maintaining the generalist title. It is also possible that because a CHRO may take part in corporate strategy development, CEOs and boards of directors are predisposed to individuals with broad backgrounds. This analysis is a snapshot of CHRO appointments by Fortune 1000 companies in It is based on information provided to the news media by those companies. It is, therefore, not a complete picture, but it offers a valid glimpse of the CHRO marketplace. We intend to make this an annual analysis in order to develop meaningful trend data to help HR professionals plan their career strategies.

3 CHRO Hires vs. Promotions Key Points Overall data Promotion appears to be the more common route to a CHRO appointment, according to our analysis of the Fortune 1000 public announcements in 2007 of senior HR executive moves that provided that information. 56% Promoted 44% Hired 20% 30% 40% 50% 60% 70% 80% Industry sector data Consumer/ Retail 55% Promoted 45% Hired 57% Promoted Energy 43% Hired Financial Services Healthcare/ Life Sciences Industrial 67% Promoted 33% Hired 51% Promoted 49% Hired 61% Promoted 39% Hired Technology 57% Promoted 43% Hired With more than half of CHRO positions in this study being filled via promotion, mid-career HR professionals interested in reaching the top echelon may benefit from assessing the promotion possibilities within their current organizations, perhaps making a move if the career ladder appears limited. The financial services and industrial sectors appear to favor promotion to CHRO, while healthcare and consumer/retail seem more open to hiring from outside the organization.

4 Key points If you are the CHRO of a corporate division, you are four times more likely (12% vs. 3%) to be promoted to corporatewide CHRO than be hired by another firm for that top job. Generalists appear to have a decided advantage in competing for CHRO positions. Among those CHROs in our analysis who arrived at the job via promotion, the majority (68%) were senior HR generalists. For those hired as CHROs, the corresponding number was 68%. Prior Functional Roles of CHROs Overall data Whether hired or promoted to CHRO, senior HR generalists and those already holding a CHRO title appear to have an edge. Data reflects those appointments for which prior role was included in the public announcement. 14% Other executive Prior functional role for hired CHROs 5% Other HR specialties 8% Divisional CHRO 73% CHRO/senior HR generalist 13% Other executive 6% Other HR specialties 3% Divisional CHRO 78% CHRO/senior HR generalist Prior functional role for promoted CHROs 14% Other executive Note: Other HR specialties: organizational development, compensation and benefits, diversity, recruiting and staffing, training. Other executive: consultant, general counsel/legal, Chief Operating Officer/ operations, CEO/president/general manager, miscellaneous 6% Other HR specialties 12% Divisional CHRO 68% CHRO/senior HR generalist

5 Prior Functional Role of CHROs by Industry Sector As in the overall data analysis, CHROs/senior HR generalists represent the largest prior functional role held by promoted or hired CHROs across all industry sectors. The following analysis, which combines data for hires and promotion, is based on those public announcements that included prior role information. 9% Other executive Consumer/ Retail 4% Other HR specialties 10% Divisional CHRO 77% CH RO/ senior HR generalist 30% Other executive Energy 0% Other HR specialties 3% Divisional CHRO 67% CHRO/senior HR generalist 21% Other executive Financial Services 6% Other HR specialties 5% Divisional CHRO 68% CHRO/senior HR generalist 6% Other executive Healthcare/ Life Sciences 13% Other HR specialties 13% Other executive 5% Other HR specialties 10% Divisional CHRO 72% CHRO/senior HR generalist 14% Other executive Technology ivisional CHROs in D the consumer/retail and industrial services sectors appear to have a better chance of promotion to corporate CHRO than do their counterparts in other sectors. One reason for this may be that industrial services and consumer/retail companies tend to have a greater number of corporate divisions than businesses in other sectors. I n our sampling, financial services, industrial and technology sector companies seem more open to hiring other executives as CHROs than do businesses in the other sectors. I ndividuals in the other HR specialties category appear to have a better chance of promotion in healthcare than in any other sector. 4% Divisional CHRO 78% CHRO/ senior HR generalist Industrial Key points 8% Other HR specialties 9% Divisional CHRO 70% CHRO/senior HR generalist Note: Other HR specialties: organizational development, compensation and benefits, diversity, recruiting and staffing, training. Other executive: consultant, general counsel/legal, Chief Operating Officer/operations, CEO/president/general manager, miscellaneous

6 In Conclusion The path to the C-suite for HR professionals appears to have distinct markers. Although our research and analysis is limited, the trends they reveal are worth considering: The majority of CHROs arrive at their jobs via promotion. CHROs of corporate divisions are four times more likely to be offered the corporate-wide CHRO spot than to be hired by another firm for such a position. For those HR executives seeking to boost their careers outside of their current employment, healthcare/life sciences and technology companies appear to be more open to hiring CHROs from outside the organization. HR generalists appear to have an advantage in competing for the CHRO post, be it through promotion or hiring. This is particularly true in the healthcare/life sciences, consumer/retail, and industrial sectors. For HR specialists seeking the CHRO post, healthcare/life sciences and technology companies seem to offer more opportunity. Career paths are never straight and narrow, and we need to be agile in order to respond to opportunity. But, we also can take steps to ensure that we move in the right direction. We are hopeful that these trends we have identified in our first CHRO study will help HR professionals make choices that will help further their careers. Methodology This analysis of CHRO appointments is based on the information contained in 669 public announcements issued by Fortune 1000 companies in Because published reports are not uniform, not every announcement contained the same type of information. For this reason, the number of individuals included in the data breakdowns varies. Acknowledgements Korn/Ferry is grateful to Joe Johnston, knowledge manager of the Human Resources Center of Expertise, for his research contribution to this report. Copyright 2008 The Korn/Ferry Institute

7 Our Team Gregory Hessel Practice Leader (214) Greg Coleman New York (212) Peri Hansen Los Angeles (310) Ed Santimauro Chicago (312) Hal Johnson Global Managing Director, Client Development (212) George Atkinson Chicago (312) George Bongiorno San Francisco (415) Monica Burton New York (212) Bonnie Crabtree Miami (305) Jane Dessar London Peter Everaert Geneva Tim Flay Sydney Sarah Hawitt Calgary (403) Linda Hyman Princeton (609) Jerry McGrath New York (212) Gordon Orlikow Toronto (416) Emilie Petrone Princeton (609) Kimberly Shanahan Northern Virginia (703) Helen Tantau Bangkok Maria Elena Valdes Mexico City Ronald Zera Dallas (214) About Korn/Ferry s Human Resources Center of Expertise Today s human resources executives are expected to align an organization s business goals with the needs of its people and create innovative HR programs that attract and retain the most talented employees in the short and long term. This requires business acumen, insight into human behavior, leadership and nimbleness. The executive recruitment professionals within Korn/Ferry s Human Resources Center of Expertise understand how dramatically the function has evolved, since many of them joined our firm from senior HR positions in a range of industries. They leverage this insider s knowledge to succeed in finding qualified individuals for each of the 500+ engagements they undertake each year. More important, the consultants in our HR Center of Expertise collaborate with Korn/Ferry colleagues located in our offices around the world who specialize in a particular industry or specialty, ensuring that we can find the very best candidates, including those of diverse backgrounds. Whether you are a start-up company, a multi-national or something in between, Korn/Ferry s HR experts can assist you.

8 About Korn/Ferry International Korn/Ferry International, with more than 90 offices in 38 countries, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to identify, deploy, develop, retain and reward their talent. For more information on the Korn/Ferry International family of companies, visit Our offices worldwide The Americas Atlanta Bogota Boston Buenos Aires Calgary Caracas Chicago Dallas Detroit Houston Irvine Lima Los Angeles Mexico City Miami Minneapolis Monterrey Montréal Naples New York Northern Virginia Philadelphia Princeton Quito Rio de Janeiro San Francisco Santiago São Paulo Seattle Silicon Valley Stamford Tornoto Vancouver Washington DC Asia Pacific Auckland Bangalore Bangkok Beijing Brisbane Guangzhou Hong Kong Jakarta Kuala Lumpur Melbourne Mumbai New Delhi Seoul Shanghai Singapore Sydney Tokyo Wellington Europe, Middle East & Africa Abu Dhabi Amsterdam Athens Barcelona Brussels Bucharest Budapest Copenhagen Dubai Frankfurt Geneva Helsinki Istanbul Johannesburg London Luxembourg Lyon Madrid Milan Moscow Oslo Paris Prague Riyadh Rome Stavanger Stockholm Vienna Warsaw Zurich