Industry digest: The rising importance of HR in automotive

Can chief people officers, or HR directors, make good CEOs? Judging by the lack of examples in the business world of HR leaders progressing to the top job, the popular answer is a resounding ‘no’. My Google search found only a handful of CEOs of large corporates with an HR background, and none in automotive. But times are changing, and so is the role of HR. The perception that it is an administrative support function dealing with personnel issues no longer holds water. With the need to attract and retain the best talent becoming ever more critical in a tight labour market, HR leaders are now driving and enabling business strategy. They are integral members of executive teams and Plc boards and are making decisions that have a direct impact on business performance and future direction. So why the glass ceiling? Why can’t HR leaders become CEOs? My interest in the subject was sparked by a recent search assignment that we carried out for a chief people officer role with a global manufacturer. Some of the candidates were outstanding in terms of the breadth of their skills sets and the core leadership roles they have played in strategic decision-making. One had pretty much kept a business afloat by leading the emergency response to the collapse of a merger deal. What also struck me was their ambition. As senior leaders, they were looking for responsibility for other functions and projects beyond just the HR department. The traditional argument against promoting HR leaders is that they do not have the commercial acumen to be a CEO compared to people from commercial or finance backgrounds. But my observation is that HR leaders have become increasingly commercial, and that this was accelerated by COVID. During the lockdowns, responsibility for dealing with the fall-out was invariably left at HR’s door, involving them in key decisions impacting the bottom line. Post-COVID, they have also been in the vanguard of developing new business structures built around remote and hybrid working. Thinking about the checklist of skills needed to be a CEO, I see plenty of ticks for HR leaders. They know how to prepare budgets, they know the commercials as a business partner to the organisation and they know how to restructure a business and manage transformation. They tend to know a lot about IT – sometimes holding responsibility for the IT function as a whole – and they are usually experts in security as well as health and safety. Facilities management is also sometimes part of their portfolio. They have advanced negotiating skills from their dealings with unions, and their engagement skills are often second to none, honed by years of dealing with stakeholders across all functions of the business. They embed the company’s values across the organisation and set the tone of the company culture, which ultimately influences whether employees want to stay or leave. And they are at the very heart of business strategy because they are responsible for organising the resources to drive the future direction of the business. Finally, they are usually a trusted confidant of the CEO, which gives them a unique insight into what is happening within the business. Ironically, the trust the CEO places in them to have honest discussions about sensitive topics is probably because they are not perceived as a threat in terms of wanting to take over their CEO role. I wonder whether that will change as the role of HR becomes ever more important in delivering business performance. It certainly should. Lynda Ennis is the founder of global automotive and mobility executive search company Ennis & Co.

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Industry digest: The rising importance of HR in automotive

Skilled workers in human resources can prove vital to keeping a business afloat through hardship

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Industry digest: The rising importance of HR in automotive

Skilled workers in human resources can prove vital to keeping a business afloat through hardship

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