Many companies state that “people are our greatest asset.” In spite of this, the executive responsible for this asset often operates in a support capacity within the most Indian boardrooms. CHROs remain arguably one of the most underutilized executives in Indian businesses today. This oversight costs companies significantly through reduced productivity, poor hiring, weak leadership development, cultural issues and slowed growth.
The Uncomfortable Truth
When revenue declines, companies involve the CFO.
When operations face issues, the COO steps in.
When sales drop, the CRO is consulted.
However, when growth stalls due to misplaced talent, weak leadership, high attrition, or declining employee output, many organizations still label this an “HR issue,” not a core business problem.
This perspective presents a significant challenge. All business challenges ultimately involve people and all people challenges ultimately affect the business.
What is the Cost of Treating HR as primarily an Administrative / Support Function ?
Thousands of Indian companies still measure HR performance based on factors like hiring numbers, time-to-fill positions, attendance, payroll accuracy and compliance etc. While these are important metrics, they do not directly address the board’s critical questions.
How can we achieve faster growth?
How do we develop future leaders effectively?
What drives our top performers to leave?
How can we enhance overall productivity?
How do we expand operations without compromising our culture?
What explains why some teams consistently outperform others significantly?
These are fundamental business questions and a CHRO should be central to providing answers to such questions.
The Best CHROs Build Business Value & not act as only a support function
The role of a modern CHRO is shifting from traditional Human Resources to Human Capital Strategy.
Effective CHROs today are deeply engaged in several key areas. They focus on workforce productivity, moving beyond simple headcount planning to understand how each role contributes to revenue, profitability, customer experience and innovation.
They also address leadership development, recognizing that most organizations face a leadership pipeline challenge rather than just a succession problem. Are you creating a second line of high performing leaders ?
Strong CHROs identify potential leaders years before the business requires them. In organizational design, they recognize that even a brilliant strategy can fail if the structure hinders execution. CHROs offer a cross-functional perspective that few other executives possess.
I strongly believe that culture can be a competitive advantage. In one of my previous companies, the teams had strong collaboration & an amazing culture.
Result – Strong delivery to clients, better team work, low attrition & culture to share best practices.
A robust culture can lower hiring costs, improve retention, enhance customer experience and speed up execution. Finally, during mergers, expansion and scaling, the success of these efforts heavily relies on integrating people effectively. This is where strategic HR becomes essential.
Why are Indian Companies Missing this opportunity ?
It starts with how most founders and CEOs grew up in a time when HR was primarily seen as recruitment and administration. This historical view often leads to CHROs being included late in strategic discussions. Workforce planning happens after business planning, hiring becomes a reactive process, leadership development is reduced to annual workshops and culture is treated merely as a statement on a wall. Companies invest significantly in sales, marketing, technology and operations, while neglecting the fundamental system that drives all these functions: their people & biggest asset.
A Question that Every CEO Should Ask
Consider the impact if your company suddenly lost its CFO, COO, or Head of Sales; it will raise alarms within the organization. Now imagine the impact of losing your top 20% performers. This loss would probably have a much greater effect. Yet, few organizations have a detailed plan to attract, develop, engage and retain these critical individuals. This is precisely where a world-class CHRO provides significant value.
Similarly Recruitment Firms Need to Evolve Too
This discussion extends beyond CHROs to include recruitment and executive search firms. The future will favor firms that move past simply sourcing CVs & lining up interviews. Clients increasingly need partners who can assist with talent intelligence, workforce planning, leadership hiring, succession mapping, strategic advice, employer branding, organizational effectiveness and talent retention strategies.
Recruitment firms that position themselves as strategic talent advisors will succeed in the coming decade. Those that remain transactional vendors will face growing pressure from AI and automation. Hence, some Recruitment firms compete on pricing as low as 5% instead of adding strategic and organizational value to their clients.
The Next Decade Will Belong to Talent-Centric Organizations
Technology is available for purchase, capital can be raised, products can be copied and processes can be replicated. However, its not easy to replicate a high-performance workforce and a strong leadership culture. This is why the CHRO’s role is becoming more important. Organizations that recognize this early will build stronger leadership teams, grow faster, retain better talent and outperform competitors.
Those that do not will continue to question why their growth stalls despite investing elsewhere.
I strongly believe that CHROs should be included in strategic discussions from the start. They should be challenged to provide answers to key questions on productivity / top performer retention etc.
But the onus also lies on CHROs / HR Heads to come up with plans, ideas, collaborations that can add strategic value to the organization. They should go beyond the call of the regular work of recruitment or HR business partner.
So, as a CHRO or a HR Firm, you should ask yourself- When was the last time I gave strategic advice, proposed a thorough plan for improving productivity or even paid higher to such a HR firm ?
