Chief People Officer: Why You Need One, Responsibilities & Skills

In 2023, 77% of employers report talent shortages. Organizations are struggling to fill new positions, retain top talent, and reskill their employees.

Tackling these challenges is the job of a Chief People Officer (CPO).

But what does a CPO do and what skills are necessary to succeed? In this blog post, we'll explore the responsibilities and skills required of a CPO and why you need one.

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What is a Chief People Officer?

A Chief People Officer – or Chief Human Resources Officer (CHRO) – is a C-level executive responsible for managing and developing an organization's most valuable asset – its people. 

This person is in charge of designing the people strategy, which includes: 

• Talent acquisition and hiring practices
• Performance management
• Compensation and employee benefits
• Employee engagement initiatives
• Training and leadership development programs

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Why do you need a Chief People Officer?

A Chief People Officer’s primary goal is to increase productivity and profitability by ensuring employees perform at their best and want to stay and develop within the company.

You need a CPO because:

• In 2022, 40% of global workers wanted to quit their jobs (McKinsey)
• Not engaged or actively disengaged employees cost the world $7.8 trillion in lost productivity (Gallup, 2022)
• 58% of the workforce needs reskilling (Gartner, 2021)
• Companies with a thriving culture and a strong workplace community show 2,374% higher odds of aspirational levels of excellent work (O.C. Tanner Institute, 2023)

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Chief People Officer – Responsibilities

So what does a CPO actually do? Let me break this down for you.

Recruitment, onboarding, and offboarding strategy

The CPO is responsible for developing a comprehensive strategy for the entire life journey of employees, including:

• Attraction and recruitment: from creating an employer brand that attracts top talent to establishing an effective hiring process
• Onboarding: ensuring new hires understand how things are done in the company and get motivated and engaged
• Offboarding: gathering feedback and mitigating potential reputation problems
  
  

2. Performance management

CPOs are responsible for designing and evaluating the company's performance management process by:

• Identifying performance gaps
• Working with managers to create development opportunities for employees
• Establishing feedback and coaching processes (performance reviews, 1:1 meetings, 360-degree edback, peer reviews)
• Training leaders in providing effective feedback
• Providing digital tools and other resources
  
  

3. Succession planning

With one of the highest turnover rates ever and a fierce battle for talent, succession planning becomes critical to minimize disruption.

The CPO needs to work with leaders to:

• Define who’s next in line for succession in critical roles
• Identify the skill gaps of potential successors
• Train and develop those potential successors
  
  

4. Employee experience

A 2022 research by Gartner revealed that employees who operate in human-centric work models are 3.8 times more likely to be high performing. People need to feel supported, valued, and engaged in their work to give their best. 

Improving the employee experience is, without a doubt, a critical goal of a CPO.

Here are some ways a CPO can do this:

• Providing professional development opportunities (mentorship programs, career development plans, training programs, workshops, and conferences)
• Promoting diversity and inclusion
• Fostering a positive work-life balance (such as flexible work arrangements)
• Establishing teamwork and collaboration processes
• Ensuring fair and equitable compensation
  
  

5. Compensation and benefits program

A pleasant work environment can do wonders but is useless if your paycheck misses the mark.

There are also other factors to bring into consideration. Additional benefits such as paid vacation time, flexible work arrangements, and childcare can be just as significant as salary when retaining and attracting future talent. 

A Chief People Officer should: 

• Understand their employees' expectations and priorities
• Review compensation and performance data to ensure the company's salary remains competitive
• Develop attractive benefits programs that align with the employee's needs and goals
  
  

6. Company culture

“Culture eats strategy for breakfast” said Peter Drucker, the management guru. No matter how solid your strategy is, if the people executing it don't have the appropriate culture, they will fail.

Imagine a tech company that wants to provide agile, innovative solutions to its customers. How can it do so if people fear sharing ideas and everything has to go through the CEO?

The CPO is in charge of shaping a culture that aligns with the company values and goals and fostering the behaviors the organization needs for success.

Some actions for improving company culture are:

• Defining and communicating the company's values
• Acting as a role model
• Establishing a recognition and rewards program
  
  

7. Employer brand & reputation

Chief People Officers are responsible for positioning the company as an employer of choice in the industry and helping attract the right talent. This includes developing employer branding strategies, engaging with potential candidates, and promoting the company's culture and values.

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Chief People Officer – Skills

You probably now understand what a CPO does. But how does he do it? Let me walk you through the skills a Chief People Officer needs.

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Solid HR expertise

If you are searching for a CPO, look into people with extensive expertise in HR. The ideal candidate should deeply understand human resources best practices, including talent management, compensation and benefits, performance evaluations and management, and employee engagement.

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Interpersonal and communication skills

Strong interpersonal skills are essential for CPOs, as they need to communicate effectively with employees at all levels of the organization, build relationships with stakeholders, and manage conflict.

Among these soft skills are:

• Emotional intelligence
• Excellent verbal and non-verbal communication skills
• Active listening skills
• Networking ability
• Conflict resolution

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Leadership skills

Successful experience in leadership positions is another essential requirement. Your CPO needs to be a people person that will inspire your employees and guide them toward organizational success.

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Business knowledge

You can’t get the best out of your employees if you don’t understand what they do and how they contribute to the final product or service. 

This is why the CPO must have a strong understanding of the industry in which the company operates, including financial metrics, business trends, and competitive forces.

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Problem-solving capabilities

In the ever-changing business landscape, CPOs must be strategic thinkers that can analyze complex issues fast, identify root causes, develop practical solutions to improve performance, and change course when needed.

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Tools to help your Chief People Officer do the job better

CPOs have a lot on their plates. Luckily, several software tools can help them manage and develop human capital faster and more effectively. 

These tools include:

• Performance management software: Save time and ensure HR processes are carried out properly by incorporating software that helps streamline the performance management process, automate performance reviews, and provide real-time feedback and coaching to employees.

Performance review analytics with Effy.ai

• People management software: Tracking employee attendance, managing time off requests, and scheduling team meetings can be tiring. With people management software, tracking employee data has never been easier. Some tools can also help automate HR processes, visualize data, and collect real-time feedback regarding employee engagement, productivity, and retention. Cool, right?
• Learning and development software: These platforms can help understand skill gaps and recommend relevant employee training based on their job roles and performance data. Some tools can also deliver online training programs and track employee progress.
• Compensation and benefits software: With this software, you can easily manage salary and bonus planning, stock options, and retirement plans. Having access to insights into salary trends, benefits utilization, and employee satisfaction can help identify areas where the organization may be underpaying or overpaying employees and recommend adjustments to the compensation strategy.

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Conclusion

Having a Chief People Officer can be a strategic advantage for your company, helping you manage and develop the organization's people more effectively. By focusing on talent management, employee engagement, and organizational development, the CPO can help improve business performance, build a strong culture, and position the company as an employer of choice.

You just need to ensure your CPO has the right set of skills and provide them with the tools to get the job done. Good luck!

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FAQs: Importance of Chief People Officer

Is Chief People Officer the same as HR?

No, the Chief People Officer is a strategic executive responsible for managing and developing a company's talent, while HR is a functional department accountable for managing employee relations, benefits, and compliance.

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Is Chief People Officer an HR role?

Yes, the Chief People Officer is a C-level HR executive responsible for managing and developing human capital strategies.

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What is the difference between CPO and CHRO?

There is no difference between Chief People Officer (CPO) and Chief Human Resources Officer (CHRO). Some companies may use one title over the other, but both refer to the same HR function, which belongs to the executive leadership team.

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What are the key skills of a Chief People Officer?

The key skills of a Chief People Officer include HR expertise, interpersonal and leadership skills, business knowledge, problem-solving capabilities, and strategic thinking.

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