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The War on Talent

A growing body of research suggests that CEOs share more relevant traits with Chief Human Resources Officers than with those of any other C-Suite position. But while CHROs may have a seat at the table, that seat’s occupant – more often than not a woman – is still least likely to become CEO.

WASHINGTON, DC – In the 1950s, during a very tight postwar labor market, American business executives voted Human Resources (HR) the most glamorous area in business. As Wharton School professor Peter Cappelli recounts, “90% of positions (and virtually all those in the top ranks) were filled from within – and 96% of large companies dedicated an entire department to planning for workforce needs.” When companies need talent, he argues, the prestige of HR goes up; when labor markets go slack, HR returns to benefits administration.

The labor market is very tight today, with unemployment rates in the United States at or below 4% since March 2018. In their popular 2018 book Talent Wins, former McKinsey global managing director Dominic Barton and his coauthors urge every aspiring CEO to gain serious HR experience and every corporate board to spend significant time on talent issues. Likewise, Ellie Filler of the consulting firm Korn Ferry and Dave Ulrich of the University of Michigan have found that CEOs’ relevant traits are more closely matched with those of Chief Human Resources Officers (CHROs) than with those of any other C-Suite position. CHROs, they suggest, should be considered when selecting CEOs.

This war for talent should be great news for women, because women dominate HR. In the US, there is also a much higher percentage of women of color in HR than in any other corporate department.

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