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CHRO vs. CPO: Pictures of Chief People Officers, also sometimes titled CHROs, VP of HR or HR Director.

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NOVEMBER 2023

7 New Capabilities of the Chief People Officer Within Venture-Backed Companies

Ben Taylor

Introduction

Known for their rapid growth and innovation-driven ethos, companies backed by private equity (PE) and venture capital (VC) firms have a new set of critical skills essential for their People leaders. The changing role of the Chief People Officer (CPO) in venture-backed firms reflects how the role is evolving across many industries.

This article will explore these new capabilities, highlighting how they are also shaping the future of the CPO role in today’s business world.

Evolving Role of the Human Resources Leader

As the role of the People function has become more prominent in organizations, so has the role of People leaders. Their impact is no longer limited just to the Human Resources (HR) realm. Increasingly these leaders are given a seat at the executive table, and are even moving into CEO roles.

A key reason for this change is that the HR leader’s role has transformed dramatically in response to latest business and technology advancements. New challenges and opportunities in the workplace demand that HR leaders not only manage operations, but also create strategies to drive organizational success and address critical issues impacting the bottom line. Titles and expectations are changing. The transition from the established Chief Human Resources Officer (CHRO) title to Chief People Officer (CPO) — with the decision to choose between a CHRO vs. CPO title — signals a shift in focus from traditional HR operations to a broader, more strategic view of human engagement and performance within the organization.

CHRO vs. CPO – What’s the Difference?

The CHRO and CPO are often seen as the same role, as in Gartner’s definition. However, the CPO is a newer role and title that was first introduced in innovative tech companies and is more people-focused and strategic.

In our experience at the forefront of HR executive search, when considering a CHRO vs. CPO title, we have found that organizations operating in innovative and fast-evolving industries often favor the term ‘People’ over ‘HR’, reflecting a strategic pivot in organizational focus. The CHRO title often aligns with traditional HR responsibilities such as employee relations, compensation, and workforce planning. In contrast, the CPO title typically signifies a more modern slant, emphasizing the cultivation of company culture, strategic talent management, and a proactive approach to diversity, equity and inclusion.

  • When guiding our clients, we suggest that if they’re seeking a forward-thinking leader adept in contemporary People strategies, the title of CPO will likely attract candidates who aim to be innovators in the field.
  • On the other hand, if their top requirement is an experienced professional with a solid track record in established HR practices, the CHRO designation holds greater appeal.

This article will focus on the CPO, a role that is highly suited to growing, venture-backed organizations.  However this leader may also be called the Vice President of HR or Head of HR.

The Changing Landscape of CPO Responsibilities

CPOs have become a pivotal architect in the strategic scaffolding of modern businesses. No longer confined to the operational back-office, CPOs are serving as vital counsel on matters where human capital intersects with organizational strategy. This evolution reflects the recognition of employees as critical stakeholders within the business ecosystem.

What are the key new requirements for the CPO at an innovative, growing company?

1. Holding a Strategic Seat at the Executive Table

Today’s CPOs are indispensable members of top-tier strategy teams. Their insight is critical in shaping company direction, and reflects their deep understanding of the workforce as a key driver of the business.

In a growing, venture-backed company, this strategic role necessitates CPOs not only to foresee the implications of company decisions on the workforce but also to craft policies and nurture a culture that aligns employee performance with the company’s overarching strategy for growth.

2. Navigating Digital Transformation

As all organizations shift towards greater digitalization, CPOs need to be at the forefront, identifying and cultivating the necessary skills and competencies within the workforce to help steer this transformation. In a newly funded company, digital processes can be especially critical to helping the be efficient and grow quickly,

The CPO’s role is essential in ensuring that the workforce is agile, tech-savvy, and prepared for the demands of a digital economy.

3. Applying Data-Driven HR Analytics

The rise of data analytics in HR has revolutionized talent management. CPOs must know how to harness the power of HR analytics, including adopting relevant tools and equipping the People team with the knowledge and training to develop evidence-based strategies that improve talent acquisition, development, and retention.

4. Enhancing the Digital Employee Experience

In an age where the workforce expects immediacy and flexibility, CPOs need to be redefining the employee experience by leveraging digital platforms.

From total rewards functions such as streamlining benefits administration to enabling self-service portals for payroll and performance management, People leaders are enhancing accessibility and empowering employees to take charge of their professional journey.

5. Reimagining Wellness in the Workplace

Moving past the pandemic, CPOs have embraced a broader conception of wellness, encompassing not just mental health but overall well-being.

The CPO must be prepared to pioneer initiatives that make wellness an integral part of the employee experience, acknowledging its impact on productivity and satisfaction.

6. Upholding Ethics in a Digital Age

As guardians of ethical practices within the workplace, CPOs need to be increasingly vigilant in the deployment of HR technologies.

Their role involves ensuring these tools are used responsibly, upholding transparency, and protecting the privacy of employee data—a task that has become more complex and critical than ever.

7. Integration of AI and Automation

As more organizations are adopting AI into their core processes, there is an urgent push for CPOs to be well-versed in AI and automation to ensure that HR and the organization integrate these technologies effectively.

  • Proficiency in AI Tools: HR professionals need to understand AI’s functionalities, its applications within HR, and the ability to utilize AI tools, interpret their results, and seamlessly incorporate them into existing HR procedures.
  • Data Competence: HR practitioners must become adept at handling AI data, interpreting, analyzing, and leveraging it for informed decision-making. This includes a basic grasp of statistical analysis, predictive modeling, and data visualization.
  • Ethical and Legal Awareness in AI: It is critical to ensure fair and unbiased utilization, data privacy, and confidentiality related to AI, and to adhere to pertinent legal regulations.
  • Proficiency in Change Management: HR professionals must excel in change management, communicating effectively about AI, addressing resistance to its adoption, and facilitating training and development to enhance employee skills.
  • People-Centric Design Approach: HR specialists should embrace a human-centered design thinking approach. This involves understanding employee needs, motivations, and behaviors and devising AI solutions that augment their overall experience and well-being.

Succession into the CPO Role

While traditionally, CPOs came from an HR background—for example, beginning as a recruiter, and moving into a generalist role — AIHR reports that this is rapidly changing, as many C-level People or HR leaders are recruited into the role with little to no prior experience in HR. Instead, they are bringing a unique skillset and experience, and may come from former roles such as Chief Marketing Officer.

CPOs can also be in line of succession for the CEO position in some organizations. Many CPOs assumed broader management responsibilities during the pandemic, when people safety and remote work rapidly changed workplace strategy. This shift created the perfect opportunity for CPO skills and abilities to shine, furthering them in the C-Suite.

Overall, CPOs must play an increasingly strategic and transformative role in organizations, focusing on data-driven decision-making, employee well-being, and contributing to overall business success.

How Frederickson Partners Can Help Identify Requirements—and Hire the Right VC/PE Leader

For nearly three decades, Frederickson Partners has been at the helm in guiding private equity firms and growth companies to find top People and HR executive talent. Navigating leadership transitions, we provide strategic insight and support to ensure that there is a visionary People leader steering the ship, especially during the crucial early phases of a company’s growth.

We address pivotal questions that help you recruit a leader uniquely able to shape the future of your firm’s human capital strategy:

  • What are the unique requirements of a PE or VC portfolio company for a CPO, VP of HR or Head of HR?
  • In considering CHRO vs. CPO titles, is CPO the most suitable title given the company’s culture and innivation?
  • When is the opportune moment to hire a strategic CPO or People Leader?
  • What happens when key leaders depart a portfolio company—can the organization efficiently recruit a new leader so growth and value aren’t impacted?

 

To align your leadership needs with the shifting tides of the HR landscape, engage with Frederickson Partners. We offer the insight and experience necessary to capitalize on the transformative role of HR in your organization. Connect with us today to explore how we can amplify your success through exceptional HR leadership.

 

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 Ben Taylor is VP of Business Development for Frederickson Partners and leads our Diversity, Equity & Inclusion (DEI) practice

Ben Taylor is Partner and Vice President, Business Development at Frederickson Partners, a Gallagher company. Ben held previous roles at Frederickson for eight years, first managing marketing and sales and more recently serving as Chief of Staff and Diversity, Equity and Inclusion (DEI) Lead, co-managing the DEI practice with the CEO. [View Ben's LinkedIn]

Read Ben Taylor’s Full Biography.

Frederickson Partners, a Gallagher company is a market leader in retained executive search since 1995. As one of the top-rated HR executive search and C-suite recruiting firms, we have expertise in placing Chief People Officers, Chief Human Resources Officers, Chief Diversity Officers, Chief Financial Officers, Chief Legal Officers and many other senior leaders. We draw on a broad network of rising and established executives and leaders, and a 28-year reputation as a talent acquisition and HR Advisory provider.

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