Who gets the top HR job? (First published on CIPD Ireland website, November 2010)

A new study examines where the top HR leaders in the largest US organisations are coming from and where they may be headed.

The financial crisis has offered an opportunity to rethink where many aspects of business are heading. Perhaps no functional area has gone through more turmoil than human resources. HR seems to be subject to renewed scrutiny by CEOs. Examining the background of top HR executives is instructive and may help inform how corporate leadership sees the HR function itself.

A PricewaterhouseCoopers sponsored study - Who Gets the Top Job? Changes in the Attributes of Top HR Leaders and Implications for the Future by Peter Cappelli and Yang Yang at the Center for Human Resources at Wharton - compared the attributes of the top HR executives in Fortune 100 companies in 2009 with those who held similar roles in 1999. They also compared the results of a similar study from 1985.

The 2009 research reveals that the average head of HR in a top US company is a 53 year old man holding a Bachelor’s degree and who has spent 15 years with their current employer and about half their working life in HR roles. The most common HR experience such a person has had is in a workforce development function. One in five had an overseas assignment, and almost a third had jobs that could be described as directly involved in international operations. Just under a third were hired into the top job from another company. 36% of the heads came to the top HR job from a different functional area, virtually always from within the same company.

Looking at changing trends over time since 1985 the most obvious difference is the increase in women executives - there was only one woman in the 1985 cohort. The average top HR executive in the 1985 sample was actually younger than in 2009 – 50 years – and also better educated. The fact that these roles are now filled by older individuals during a time period when top executives across the board became about four years younger is striking.

In terms of tenure, the 1985 group had 26 years work experience in total and 15 years with their current employer. These figures are somewhat less than those in 1999 but more than in 2009. There is a tendency to think of factors that reduce tenure like job hopping and outside hiring as recent trends, but on balance they are apparently not much different in the more recent period than in 1985. The fact that tenure actually grew in these jobs between 1985 and 1999 runs counter to what was seen for executives in other fields.

More of the group of 1985 began their career in HR - 55% - which makes them much like the 2009 sample. To the extent that there appeared to be a trend from 1999 to 2009 towards a more ‘professional’ career path than began in HR and led to the top job, that trend seems to represent not something new but a return to what was seen a generation ago.

In certain aspects experience outside HR in 1985 looks similar to today - almost exactly the same percentage had experience in finance and marketing then as now. One striking difference, however, is that almost a quarter reported having general management experience associated with line management in 1985. It was half that level by 1999 and then in 2009. Another big difference is that 72% in the 1985 sample group reported having experience in labour relations, down to under 9% in 2009, a consistent trend over time that tracks the declining role of unions in the US.

Overall, what is perhaps most surprising about the 1985 comparison is, firstly, that HR executives from a generation ago do not look all that different from those in the roles today and more different from those in 1999. More job hopping and outside hiring as well as more moves into the HR role from other fields over time might have been expected, but the data does not support that view. The fact that the 2009 cohort is actually older, especially when the trend for other executives is in the opposite direction, is hard to explain. One interpretation, which draws on the trend towards more internal HR careers since 1999, is that HR may be become more ‘siloed’ over time, i.e. promotions come more from within the function, which has itself grown older. That can happen either because older employees stay around longer or because fewer young workers enter. The fact that contemporary HR executives have fewer graduate degrees may reflect the declining influence of specialist fields like employment law and personnel psychology.

Perhaps the most general conclusion from the results is that changes in US HR functions have been much more modest than the observations from many consultants suggest. Change in the gender composition of HR leaders has truly been dramatic as has the continued decline of lifetime careers with the same employer, both trends underway for some time. The rise of international and global work experiences and the shift to greater experience in topics like talent management are important developments, but they reflect changes that have been underway in the economy for some time.

Other changes, while modest, seem to run counter to popular views, especially the fact that HR executives are more likely to be promoted from within the HR silo and have narrower experience outside HR. The finding that HR career paths appear to have become more siloed may be the most unanticipated. The reason this is a surprise may have more to do with the hopes and expectations of HR observers, who on average want the function to play a more central role in overall business decisions and therefore expect the HR executives will need broader business exposures to do so. The perception that more HR leaders are coming from outside the function reflects this belief that HR jobs should require more business expertise.

A different interpretation, however, is that the demand for HR to play this bigger role is not there. CEOs either may not see the possibility for that role or may not want it in their operations. And the extent to which the HR community itself encourages the view of itself as a ‘profession’ governed by its own standards and rules, conflicts with the notion that HR should be a player in business decisions.

A more sanguine conclusion is that perhaps HR leaders do not need experience outside of HR to play an important role in business decisions because understanding of such decisions is now so much more widespread. Even a decade ago, the idea that one should consider operational decisions based on their return on investment was novel. Now it is commonplace. For better or worse, the top HR role in the US appears to have become more of an internal affair.

For further information contact Gerard McDonough or Mark Carter PwC HR Services Ireland.