CHRO Succession

10/31/14

In past HR@Moore Survey of Chief HR Officers we have asked how the responding CHRO came into the role, and the results have always been troubling. Past surveys show only 32-36% of CHROs came into the job through an internal succession (32% in this year’s survey), and we have often wondered why this number is so low.

In the 2014 survey we asked if the responding CHRO were to step down immediately, did they have a successor (a) ready now, (b) ready soon (in 1-2 years), or (c) ready later (in greater than 2 years). Of those responding, 25.1% indicated that if they stepped down today they would have a ready now candidate, 40.3% said the candidate would be ready in 1-2 years, and 34.6% greater than 2 years. An informal poll of the survey’s Advisory Board members, most of them said that they would like to have ready now successors for at least 50% of their C-suite roles, and by this standard, the current state of CHRO succession seems troubling.

On a previous question over 50% of the CHROs noted that their predecessor left “by mutual agreement” (probably not through a planned process). Thus it may be that in a number of cases their earlier than expected departure did not enable them to fully build a ready-now successor.

It must be noted that there are a number of legitimate reasons offered for why CEOs go outside for their CHRO hire. For instance, often the CEO wants someone with board experience and this requires going outside. Or it may be that a CEO coming from outside does not trust an insider CHRO. In our discussions with a number of CHROs it appears that the position is quite unique, depending on a good chemistry between CEO and CHRO, thus it may be that the position may never be like other C-suite roles in terms of the percentage of internal successions. So, over the years I have become less critical of the low number of internal successions into the CHRO role. However, this should not justify failing to develop internal successor candidates to provide options to the CEO, and the numbers we observed (25% ready now) suggest significant room for improvement. One finds it difficult to imagine ever seeing the percentage of internal successions rising if so few CHROs have developed a ready now potential internal successor.