The modern workplace is a vastly different landscape than it was just a decade ago. Few roles have transformed as dramatically – or as necessarily – as that of the chief people officer (CPO).
No longer confined to back-office responsibilities or only consulted during crises, today’s CPO is a key business leader, strategist and cultural architect.
Wait – before you keep reading, have you checked out the first piece in our mini-series on empowering HR professionals? If not, you should – it’s all about why HR is more strategic than ever and ready for the top table.
Navigating a complex environment
The past few years have tested the resilience of HR teams like never before. The Covid-19 pandemic forced a rapid shift in how businesses operated. Rising inflation placed financial stress on employees. And industrial action highlighted ongoing dissatisfaction with pay and conditions. These external pressures added to the already challenging internal responsibilities faced by HR professionals.
Our 2024 survey of 300 HR decision-makers found that the top concern for 51% of respondents was talent retention. Other key challenges included meeting pay expectations, supporting employee wellbeing and ensuring work-life balance.
While many organisations have robust HR systems brimming with useful data, the ability to harness this information effectively is another matter. By digging into workforce analytics, HR leaders can pinpoint simple interventions – like early access to earned wages or enhanced wellbeing benefits – that can significantly improve engagement and retention. Data can also reveal opportunities to redeploy talent, upskill employees or fill vacancies internally using individuals with transferable skills.
From administrator to influencer
This evolution in HR’s capabilities has changed the expectations of a CPO. Far from being limited to administrative duties, today’s CPO is deeply involved in strategic business decisions, from where employees work to mergers and acquisitions.
“They show up as business leaders first and speak the language of the business,” says Mark Withers, an organisational change consultant. “They become a trusted advisor to the CEO and executive committee, rather than just being wheeled in to deal with an operational issue. They know what the organisation needs to succeed, and how people contribute to that.”
This elevated presence has also brought greater public visibility and accountability. Failures in workplace culture – like those at the CBI or Harrods – prompt scrutiny of HR’s role. CPOs must now help manage culture and reputation proactively.
“These days you have to look at what’s going on culturally that you can change,” says Lucy Graley, director of people at the Royal Parks. “I’ve worked with a lot of passionate people who follow what the leader does and that's what becomes acceptable. HR can get clarity on what people want from the culture. As we become trusted advisors, we can play this back to the CEO so they can see how this plays out.”
Our chief people and operating officer Claire Williams adds: “Previously you might have looked at things through an operational perspective. Now it’s a risk lens and you’re asking the question: ‘what happens if we don’t act on this now?’”
Building new capabilities
To succeed, CPOs need broad, forward-looking skills – and a high-performing team to match. The growing complexity of issues such as diversity, equity and inclusion (DEI), business transformation and digital integration has prompted some HR functions to restructure.
Former CPO and author of Mind the Gap Rupert Brown argues that HR is often brought into major transformations too late. “Companies have been distracted and taken their eyes off the people dimension of transformation,” he says. “Then HR will be drafted in for union consultations [too late] because they’re so busy with other stuff.” Brown suggests splitting HR into two functions – one focusing on day-to-day operations, and another on strategic transformation.
We have embraced this model. Our people operations team handles core HR tasks like payroll and grievances, while our people experience team leads on engagement, career development and communications.
A seat at the table during big decisions
The debate over hybrid working underscores the complexity of modern people management. A 2023 Owl Labs survey found that 24% of employees would take a pay cut of 15% or more to work a four-day week. Meanwhile, some business leaders blame remote work for declines in productivity, creating friction across generations and departments.
“The focus is on HR to show evidence of productivity, to show what people are doing if they work remotely,” says executive headhunter Lisa Wormald. She notes that younger employees may thrive on in-person mentorship, while others value the autonomy of remote work.
CPOs are also becoming essential players in mergers and private equity deals, areas once dominated by CFOs and legal advisors. CPO Greg McCaw, whose accounting firm has engaged in both mergers and acquisitions (M&A) and private equity, says: “I like to think of [M&A] as rewiring two businesses because you’re delicately bringing together organisations that may operate in fundamentally different ways… HR can spot where tensions might emerge and shape a path that blends the best elements of each business.”
The power of data and digital tools
With so much responsibility, having access to the right data and tools is critical. CPOs must balance leading indicators – which forecast future performance – with lagging ones that inform long-term strategy. But data quality and clarity are crucial. If the insights aren’t trustworthy, more information can be a liability rather than an asset.
Today’s HR tech stack often includes sophisticated analytics, visualisation dashboards and even AI-driven solutions that automate routine tasks. This allows CPOs to spend more time shaping strategy and influencing board-level discussions.
Tech expertise is now a key hiring criterion for HR leaders. “What CEOs want from the HR [leader] is split between the what and the how,” Wormald explains. “They want someone who knows the tech stuff, who has financial awareness and the ability to drive change. But they also want someone who is a broad generalist.”
The evolving role – and title
The transformation of HR’s role is also reflected in the evolving job titles and remits. According to the Global CHRO Turnover Index from Russell Reynolds, many incoming CHROs are now responsible for areas like communications, sustainability and transformation.
Senior professionals with cross-functional knowledge are in high demand. “I try to retrain in something at least every other year,” says Melanie Steel, an interim HR director and change specialist. “I’ve qualified in programme management, change management and generative AI. That broader portfolio gets you through the door to have bigger conversations.”
Ultimately, the strategic value of HR is being recognised like never before. “My job is to ensure HR is in the boardroom,” says our CEO Sion Lewis. “Not just to ensure employees have a great experience at our company, but to make sure they have the confidence and ammunition to challenge and support their peers in the C-suite.”
Then and now: from HR manager to CPO
HR managers of the past:
- Were reactive
- Followed the company line
- Had limited career progression
- Were viewed as a cost centre
- Are proactive, always scanning the horizon
- Are confident to challenge senior colleagues
- Can expand their roles and progress to CEO
- Are viewed as adding value to the business
- Are crucial members of the C-suite and partner to the CEO
Unlock your full potential as a CPO
In a world where people strategy is inextricably linked with business performance, the CPO is no longer a support function. It’s a business-critical leadership role – one that’s shaping the future of work from the inside out.
If you’re a current or aspiring HR leader determined to transform your organisation, download our free white paper to unveil the strategic insights to unlock your full potential. Or, if you’re ready to experience our transformative HR software in action, request your free, no-strings-attached demo today.
Read our third instalment on empowering HR professionals: how to craft a successful CEO-CPO partnership.