3 Priorities for CEO-CHRO Collaboration in the Digital Age

How CEOs and CHROs can collaborate in the new work environment.

Digitalization is delivering new value-creating opportunities, agile competitors are disrupting business models, and innovative recruiters are nabbing sought-after digital talent. In this environment, chief executive officers (CEOs) will need to leverage their chief human resource officers (CHROs) to steer their organizations and their workforces so they can stay ahead of competition in the digital age.

CEOs and CHROs will need to partner together on developing a strategy that will help the organization and its leaders manage this changing workforce

“These trends will soon — if they haven’t already — disrupt the work environment, making the connection between business and HR leaders more important than ever before,” says Marcus Chiu, senior research analyst at Gartner. “However, CEOs and CHROs are often isolated from each other.”

Chiu says the two leaders should tackle key trends together to maximize their impact.

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The future of jobs

Emerging technologies such as artificial intelligence (AI) and virtual reality have the potential to augment human capabilities and increase business value in unforeseen ways. In 2020, AI will be disruptive, but the net gain in jobs could be substantial — 500,000 positions gained as workforce restructuring sees 2.3 million jobs added vs. 1.8 million lost.

Automation will be a key component of workforce restructuring. CHROs believe that 14% of the existing jobs across their organizations are at risk of automation over the next three years. Only 20% of CEOs and 10% of CHROs, however, say their organizations have strategies to deal effectively with automation risks.

Over 30% of organizations have already taken steps to revamp talent acquisition strategies

Questions CEOs and CHROs can address include: How does automation affect the existing workforce? What can we do to help employees drive further automation? How effective are our organizational learning systems to retrain employees and build critical skills that are now too expensive to buy?

The new war for talent

A significant majority (90%) of CHROs say that competition for critical talent will increase over the next 12 months. As digitalization exacerbates competition for critical talent, an increasing number of industries will struggle to access digital skills.

Organizations will have to reconcile talent supply and demand by retraining existing employees and dramatically scaling up talent recruitment and forecasting strategies. Gartner data shows that over 30% of organizations have already taken steps to revamp talent acquisition strategies by growing shared talent pools with other businesses and removing standard education requirements from their recruiting profiles.

This raging war for talent will force organizations to diversify their talent pools and empower employees with greater autonomy in the workplace. For organizations, this will promote greater diversity of thought, which will also require new management techniques. CEOs and CHROs will need to partner together on developing a strategy that will help the organization and its leaders manage this changing workforce.

HR in the digital age

Many business leaders believe the most important HR priority should be attracting, developing and retaining the digital talent needed to drive transformation. However, for successful long-term digital transformation, it is critical for HR to act as a strategic partner and consider the long-term talent implications of their organization’s digital strategy.

In response to this, CEOs and CHROs mostly agree that HR needs more investment, with people capabilities taking priority. CHROs want to radically change how HR services are delivered to different segments of the workforce to better navigate changes caused by digitalization. Another area of investment is technology, with 70% of CHROs believing that changing the technologies employees use for work will lead to growth, according to Gartner data.

It is more important than ever for CHROs to take a seat at the table along with the CEO and board of directors

While both CEOs and CHROs agree that heads of HR should focus on leading the function before all else, only half of CHROs (54%) believe their current operating model effectively drives business outcomes.

Regardless of the HR model, most CHROs want to radically transform how HR services are delivered to internal customers, which is why it is more important than ever for CHROs to take a seat at the table along with the CEO and board of directors to develop a digital strategy that considers the implications of current and future workforce trends.

This article is based on insights that are part of an in-depth collection of research, tools, templates and advice available to Gartner clients.

 

Gartner for HR clients can read more about The CEO 20 Pulse on the Future of Work.

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