Summary
In our latest report, Managing Partner Michael Henry, examines:
- The emerging human capital priorities for many financial services organizations
- A recommended approach for identifying and selecting a Chief Human Resources Officer (CHRO) in today’s evolving business environment
- The benefits of developing a formal HR evaluation framework
With areas such as artificial intelligence and the future of work top of mind for many financial services organizations, the role of the CHRO is evolving quickly. Having led governance strategy at the corporate and board levels, and from my experience working with Michael Henry, I have found that organizations that adopt a formal evaluation framework when selecting a CHRO are better positioned to navigate industry-wide transformation and human capital demands.
Our latest report examines the nuances of selecting a CHRO in today’s evolving financial services environment, including the benefits of developing a formal HR evaluation framework.
Introduction
The speed of change and the breadth of business transformation that financial services organizations are currently experiencing is unparalleled in modern times.
In the aftermath of COVID, and with areas such as digital adoption, climate and social change, the future of work, and artificial intelligence top of mind for both employees and organizations, the role of the CHRO is more critical than ever.
While rapid change on such a scale is challenging, it also presents a tremendous opportunity for c-suite executives in financial services; CEOs and boards will need to carefully reflect on the scope and pace of organizational adaptation when planning for talent acquisition and retention.
To support this strategy, it will be important for financial services organizations to select a CHRO with the ability to navigate this industry-wide transformation and position the organization for success while managing human capital effectively.
The remainder of this article will focus on a recommended and proven approach to identifying and selecting a CHRO in today’s evolving financial services landscape.
The speed of change and the breadth of business transformation that financial services organizations are currently experiencing is unparalleled in modern times.
Determine Human Capital Priorities
Financial services organizations are often on different points of the spectrum of change and adoption, typically determined by factors such as competitive and shareholder considerations, strategic planning priorities, and regulatory limitations.
To better inform the CHRO selection and screening process, organizations must first reflect on their short, medium, and longer-term human capital priorities.
A robust HR evaluation framework should account for key pillars of human resources activities and deliverables. These pillars will vary in name and scope by organization but generally cover primary HR responsibilities such as talent management, change management, culture, and business partnering.
Executive leaders and boards will need to further reflect on the pillars most critical to support their overall strategy and determine how current HR practices are delivering against each pillar.
Many organizations have similar models to evaluate the effectiveness of HR’s service delivery and strategic impact. That said, it will be especially important to reaffirm human resource priorities given the recent impact of COVID and the acceleration of technology transformation in recent years.
The key to successfully using such models within an executive search process is to ensure that senior executive groups and the board have consensus on organizational priorities from an HR perspective.
To better inform the CHRO selection and screening process, organizations must first reflect on their short, medium, and longer-term human capital priorities.
Sample CHRO Evaluation Model
There are many models that can be beneficial in evaluating candidates relative to the priorities and requirements of the organization. Below, we’ve provided an example of one such model.
Evaluating Against the Model
Few CHROs enter an organization with experience across each pillar of the evaluation model.
Models like these are often aspirational but nonetheless beneficial in determining the suitability of a candidate. When coupled with an experienced interviewer and/or executive search firm, the capabilities profile of candidates can be quickly mapped against the pillars.
This model provides the CHRO Selection Committee with helpful feedback on how a candidate can address identified priorities, and where there are gaps in skills or experience.
Once validated by the executive team and board, the model can also be leveraged as a framework for the new CHRO to conduct ongoing dialogue with senior leaders, and to ensure alignment regarding priorities.
Equally important, the model can be used as a performance measurement tool to assess progress and effectiveness – particularly in the CHRO’s first year.
Once validated by the executive team and board, the HR model can also be leveraged as a framework for the new CHRO to conduct ongoing dialogue with senior leaders regarding strategic human capital priorities.
Conclusion
With the speed and scope of organizational change in financial services reaching unprecedented levels, deliberate and strategic consideration of priorities for a new HR leader will be critical in ensuring continued organizational success.
Matching the right competencies and experiences to short and medium-term organizational challenges will enable a new CHRO to accelerate the right initiatives while empowering the organization to effectively adapt to changes — now and in the future.
About Massey Henry
Executive Search, Coaching, Assessment, and Advisory Services
Massey Henry is one of North America’s leading executive search and board advisory firms exclusively serving the financial services sector.
With an experienced team of former industry leaders and talent management specialists, the firm combines innovative technology with in-depth sector expertise to provide clients with full-scope executive search, talent assessment, coaching, and leadership advisory services.
Michael Henry
Managing Partner, Massey Henry
John Sanders
Senior Partner, Board & CEO Services
Alex Bunyan
Partner & Co-Head, Leadership Practice
Elaine Lajeunesse
Partner & Co-Head, Leadership Practice