The PaTh To The c-suiTe 2008

A Guide for Human Resources Executives

executive summaryWhat does it take to achieve the rank of Chief Human Resources Officer (CHRO)? In an effort to answer this question, the Human Resources Center of Expertise of Korn/Ferry International conducted an analysis of CHRO appointments publicly announced by Fortune 1000 companies in 2007.

The key findings included: Promotion appears to be the most common route to the C-Suite for HR professionals. More than half of those achieving the highest rank arrived there via promotion. Existing CHROs and senior HR generalists were by far the largest group of professionals to be hired for or promoted to CHRO.

These findings are instructive, particularly for mid-career HR professionals who aspire to become CHROs. If promotion improves your chances of attaining that goal, it is important to assess the career ladder of your current organization and act accordingly. If the probability of advancement appears remote, it may be wise to seek a position in a more promising organization.

As for the dominance of senior HR generalists among newly minted CHROs, several factors may influence this result. In our practice, we have seen HR specialists, such as experts in compensation and benefits, diversity, organizational development, etc., successfully achieve CHRO status. Because organizations have different position titles, it is possible that these specialties are represented among those holding the generalist title in the public announcements used to prepare our study. Best-in-class HR departments often rotate personnel among the various HR specialties while maintaining the generalist title.

It is also possible that because a CHRO may take part in corporate strategy development, CEOs and boards of directors are predisposed to individuals with broad backgrounds.

This analysis is a snapshot of CHRO appointments by Fortune 1000 companies in 2007. It is based on information provided to the news media by those companies. It is, therefore, not a complete picture, but it offers a valid glimpse of the CHRO marketplace. We intend to make this an annual analysis in order to develop meaningful trend data to help HR professionals plan their career strategies.

Key Points

With more than half of CHRO positions in this study being filled via promotion, mid-career HR professionals interested in reaching the top echelon may benefit from assessing the promotion possibilities within their current organizations, perhaps making a move if the career ladder appears limited.

The financial services and industrial sectors appear to favor promotion to CHRO, while healthcare and consumer/retail seem more open to hiring from outside the organization.

chRo hires vs. Promotions

overall data Promotion appears to be the more common route to a CHRO appointment, according to our analysis of the Fortune 1000 public announcements in 2007 of senior HR executive moves that provided that information.

industry sector data

56% Promoted

44% hired

55% Promoted

45% hired

57% Promoted

43% hired

67% Promoted

33% hired

51% Promoted

49% hired

61% Promoted

39% hired

57% Promoted

43% hired

20% 30% 40% 50% 60% 70% 80%

Consumer/Retail

Energy

FinancialServices

Healthcare/Life Sciences

Industrial

Technology

Prior Functional Roles of chRos

overall data Whether hired or promoted to CHRO, senior HR generalists and those already holding a CHRO title appear to have an edge. Data reflects those appointments for which prior role was included in the public announcement.

Prior functional role for hired chRos

Prior functional role for promoted chRos

Key points

If you are the CHRO of a corporate division, you are four times more likely (12% vs. 3%) to be promoted to corporate-wide CHRO than be hired by another firm for that top job.

Generalists appear to have a decided advantage in competing for CHRO positions. Among those CHROs in our analysis who arrived at the job via promotion, the majority (68%) were senior HR generalists. For those hired as CHROs, the corresponding number was 68%.

8% Divisional chRo

5% other hR specialties

14% other executive

73% chRo/senior hR generalist

3% Divisional chRo

6% other hR specialties

13% other executive

78% chRo/senior hR generalist

12% Divisional chRo

6% other hR specialties

14% other executive

68% chRo/senior hR generalist

Note:Other HR specialties: organizational development, compensation and benefits, diversity, recruiting and staffing, training.

Other executive: consultant, general counsel/legal, Chief Operating Officer/operations, CEO/president/general manager, miscellaneous

Prior Functional Role of chRos by industry sectorAs in the overall data analysis, CHROs/senior HR generalists represent the largest prior functional role held by promoted or hired CHROs across all industry sectors. The following analysis, which combines data for hires and promotion, is based on those public announcements that included prior role information.

Key points

Divisional CHROs in the consumer/retail and industrial services sectors appear to have a better chance of promotion to corporate CHRO than do their counterparts in other sectors. One reason for this may be that industrial services and consumer/retail companies tend to have a greater number of corporate divisions than businesses in other sectors.

In our sampling, financial services, industrial and technology sector companies seem more open to hiring “other executives” as CHROs than do businesses in the other sectors.

Individuals in the “other HR specialties” category appear to have a better chance of promotion in healthcare than in any other sector.

Note:Other HR specialties: organizational development, compensation and benefits, diversity, recruiting and staffing, training.

Other executive: consultant, general counsel/legal, Chief Operating Officer/operations, CEO/president/general manager, miscellaneous

10% Divisional chRo

5% Divisional chRo

4% Divisional chRo

10% Divisional chRo

9% Divisional chRo

3% Divisional chRo

4% other hR specialties

6% other hR specialties

13% other hR specialties

5% other hR specialties

8% other hR specialties

0% other hR specialties

9% other executive

21% other executive

6% other executive

13% other executive

14% other executive

30% other executive

77% chRo/ senior hR generalist

68% chRo/senior hR generalist

78% chRo/ senior hR generalist

72% chRo/senior hR generalist

70% chRo/senior hR generalist

67% chRo/senior hR generalist

Consumer/Retail

Energy

Financial Services

Healthcare/Life Sciences

Industrial

Technology

© Copyright 2008 The Korn/Ferry Institute

in conclusionThe path to the C-suite for HR professionals appears to have distinct markers. Although our research and analysis is limited, the trends they reveal are worth considering:

The majority of CHROs arrive at their jobs via promotion. CHROs of corporate divisions are four times more likely to be offered the corporate-wide CHRO spot than to be hired by another firm for such a position.

For those HR executives seeking to boost their careers outside of their current employment, healthcare/life sciences and technology companies appear to be more open to hiring CHROs from outside the organization.

HR generalists appear to have an advantage in competing for the CHRO post, be it through promotion or hiring. This is particularly true in the healthcare/life sciences, consumer/retail, and industrial sectors. For HR specialists seeking the CHRO post, healthcare/life sciences and technology companies seem to offer more opportunity.

Career paths are never straight and narrow, and we need to be agile in order to respond to opportunity. But, we also can take steps to ensure that we move in the right direction. We are hopeful that these trends we have identified in our first CHRO study will help HR professionals make choices that will help further their careers.

MethodologyThis analysis of CHRO appointments is based on the information contained in 669 public announcements issued by Fortune 1000 companies in 2007. Because published reports are not uniform, not every announcement contained the same type of information. For this reason, the number of individuals included in the data breakdowns varies.

acknowledgementsKorn/Ferry is grateful to Joe Johnston, knowledge manager of the Human Resources Center of Expertise, for his research contribution to this report.

our TeamGregory HesselPractice Leader(214) 954-1834

Hal JohnsonGlobal Managing Director, Client Development(212) 687-1834

George AtkinsonChicago(312) 466-1834

George BongiornoSan Francisco(415) 956-1834

Monica BurtonNew York(212) 973-5853

Greg ColemanNew York(212) 687-1834

Bonnie CrabtreeMiami(305) 377-4121

Jane DessarLondon+44 20 7312 3280 Peter EveraertGeneva+41 22 817 1198 Tim FlaySydney+612 9006 3415

Peri HansenLos Angeles(310) 552-1834

Sarah HawittCalgary(403) 269-3277

Linda HymanPrinceton(609) 452-8848

Jerry McGrathNew York(212) 687-1834

Gordon OrlikowToronto(416) 365-4016

Emilie PetronePrinceton(609) 720-7342

Ed SantimauroChicago(312) 466-1834

Kimberly ShanahanNorthern Virginia(703) 873-3211

Helen TantauBangkok+662 636 1462

Maria Elena ValdesMexico City52-55-5201-5420

Ronald ZeraDallas(214) 954-1834

© Copyright 2008 The Korn/Ferry Institute

about Korn/Ferry’s human Resources center of expertiseToday’s human resources executives are expected to align an organization’s business goals with the needs of its people and create innovative HR programs that attract and retain the most talented employees in the short and long term. This requires business acumen, insight into human behavior, leadership and nimbleness.

The executive recruitment professionals within Korn/Ferry’s Human Resources Center of Expertise understand how dramatically the function has evolved, since many of them joined our firm from senior HR positions in a range of industries. They leverage this insider’s knowledge to succeed in finding qualified individuals for each of the 500+ engagements they undertake each year.

More important, the consultants in our HR Center of Expertise collaborate with Korn/Ferry colleagues located in our offices around the world who specialize in a particular industry or specialty, ensuring that we can find the very best candidates, including those of diverse backgrounds.

Whether you are a start-up company, a multi-national or something in between, Korn/Ferry’s HR experts can assist you.

about Korn/Ferry internationalKorn/Ferry International, with more than 90 offices in 38 countries, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to identify, deploy, develop, retain and reward their talent. For more information on the Korn/Ferry International family of companies, visit www.kornferry.com.

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