When HR pros need to fill a position, it’s not uncommon for them to look within their own organizations. As one VP of talent acquisition told HR Brew earlier this year, “There’s no greater talent pool than your own.” But when it comes to recruiting HR talent itself, internal mobility is trickier—particularly when a C-suite role opens up.
Chief human resources officers (CHROs) were more likely to report being recruited from outside an organization than from within, according to a survey by the Center for Executive Succession at the University of South Carolina conducted in May and June of this year.
Companies’ tendency to look outside their organizations for top HR talent has held true since 2009, when Patrick Wright, currently department chair of USC’s Darla Moore School of Business, first started surveying CHROs. These C-suite leaders are less likely to be promoted internally than CEOs or chief financial officers (CFOs), Wright’s research has found.
The trend may be seen as an indictment of the HR function, Wright told HR Brew. “If we’re in charge of talent development, and we aren’t developing our own talent…to be able to have internal successors…that says something about us as a function,” he said. But it’s also a reflection of the evolving nature of the CHRO role at public companies, where board experience is increasingly valued, and may help external candidates beat out internal talent, he said.
Promoting from the outside. Among the CHROs surveyed in 2023, 60% were external hires, compared to 40% who were internal hires.
For comparison, Wright included survey data from CFOs, 48% of whom reported being hired externally, compared to 52% who reported being promoted from within the organization. Historically, CFOs have been even more likely to report being internal hires: In 2015, for example, about 64% said they were promoted from within the organization, compared to 37% of CHROs.
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These diverging paths to the C-suite may be explained by the fact that CFO roles tend to be “formulaic,” whereas CHRO roles may be “a little bit more ambiguous in terms of what [is] expected,” Wright said.
But more than anything, Wright said he believes a need for corporate board experience may prompt companies to outsource top HR talent from the outside. Most CHROs included in his annual survey work at public companies, which are required to have a board of directors. While lower-level HR professionals may occasionally attend board meetings, they’re not likely to interact much with a board until they’re in a C-suite position, Wright said.
When recruiting a CHRO, “a CEO is going to be more comfortable with someone who might have been in a smaller company, but at the top, where they worked with a board of directors, so at least they know how to navigate the landmines that can come with working for a board,” he suggested.
HR 🤝corporate boards. An interest in recruiting CHROs with board experience is unsurprising when you consider how the role has evolved. Over the past 15 years, boards have started asking for more information about company culture, following high-profile scandals at companies like Uber and Wells Fargo, Wright said. They’ve also become more interested in CEO succession and executive compensation, as well as employee engagement in the aftermath of the Covid-19 pandemic. All of these interests fall within the purview of HR.
When CHROs were asked where they could have the most “critical and differentiating” impact for driving business success at their organizations, the most common answer (51%) was serving as a “board’s leader of human capital.”
“It’s clear that the board’s priorities are becoming the CHRO’s priorities,” Wright said.