Change in leadership can be very difficult for an organization, but one point that often goes unnoticed is the CHRO turnover rates after the exit of the CEO. A CHRO’s influence in the boardroom is often paramount to the company’s success, and shapes the organization’s approach to key decisions. Despite the strategic role the CHRO plays, often, their position is affected by factors out of their control, including the change in leadership.
According to Rosanna Trasatti, CEO at Eleva Executive Leadership Advisory, who spoke at Fortune’s Workplace Innovation Summit, almost seven out of ten CHROs are eventually replaced after a change in the CEO seat. This highlights the vulnerability of CHROs during leadership changes at the top. This change is not ideal for either the workers or the CHROs who are swiftly replaced, making it all the more important to ensure that such changes are kept to a minimum.
CHRO Turnover After CEO Exit—Is This a Real Issue?
A CEO rarely works in isolation—they are accompanied by an entire board of experts who provide insights into the various moving parts within a business, aiding in the decision making that’s essential to keep the business focused forwards.
Among the various top management roles, Chief Human Resource Officers work very closely with the CEO in order to keep the wheels turning in any organization. Their advice on the workforce and the constant strategic inputs can help set the organization on the right path towards achieving its goals. This close association does come with its downsides.
CEO transitions are among the most disruptive events to occur in an organization as there is an unintended ripple of consequences that arise as a result. From losing investor confidence to temporary operational inefficiencies, there are many repercussions of making the switch.
Where Do CHROs Come Into the Picture?
CHROs are often hailed as architects of the organization’s culture and strategy, but when the CEO is replaced, a new leader enters with ideas and perspectives of their own. This doesn’t always mean a complete switch in the culture of the company, but there is a hint of that with every change. When a CHRO presents the CEO with the current culture of the organization, there is likely to be some resistance when the new leader has a strategy that they were hired to enforce.
Often, the CHRO’s role extends to succession planning, assessing internal talent and aligning the leadership strategies with organizational goals. However, as Fortune highlights, 70% of CHROs depart post-transition, often due to misaligned expectations, shifts in strategic priorities, or a failure to establish a working connection with the incoming CEO. The overall HR transformation that occurs following a change in leadership is often kept out of the CHRO’s reach, forcing them to conform or quit.
The clash of visions is only one reason for the CHRO turnover after a CEO leaves. Often, there is a chance of the CHRO being seen as unanimously aligned with the culture and practices of the exiting leader, making it appear essential to replace them in order to complete the transition.
Additionally, the intense pressure of managing this high-states transition can expose gaps in the CHRO’s strategic influence or capability, leading to their exit. A CHRO’s responsibilities might be vast, but it is imperative that they also add the facilitation of smooth leadership transitions to their list of priorities, even if it isn’t immediately prescribed by the organization.
CHRO Responsibilities Include Thinking Like an Investor, Leading Like a CEO
The CHRO’s role in the HR transformation that comes with new leadership is something that needs to be taken seriously. While it isn’t everyday that a CEO is replaced at the top, CHROs still need to prepare for the possibility and pen their own plans for how they will contribute to the transition.
Trasatti’s advice to CHROs is to think like an investor and lead like a CEO does. This involves understanding the organization’s long-term value drivers the way an investor with money in the race would, while also stepping beyond acting as an HR advisor and becoming an HR leader with an awareness of their power and control.
C-suite succession trends are there for anyone to study, and CHROs must take note of the information to factor in how their own organization might be affected by a change in leadership. CHROs must prioritize continuous succession planning, treating it as a part of their regular responsibility rather than going into emergency mode and reacting to the change when it eventually occurs.
The strategic CHRO role cannot be played passively, as this is the primary reason why many are not heard or valued despite their relevance to the health of the company. The HR transformation that begins with the leadership needs to be accompanied with a game plan in place for when the change does occur.
Improving CHRO Boardroom Influence During a Period of Transition
Not every CHRO will witness the change of a CEO during the course of their careers, but it is a situation they need to be prepared for. A CEO could be replaced for multiple reasons, extending right from their desire to retire to the loss of investor faith in their ability to lead. Each form of change will come with consequences of their own, making it important for CHROs to be prepared for every possible outcome.
To avoid this “CEO trap” of the high CHRO turnover rates after the exit of a CEO, there are a couple of things one can do to prepare.
- Build a robust succession plan that makes the most of internal talent and provides development opportunities to prepare for future leadership roles
- Take charge and lead with strategies to showcase your position as a leader and decision maker at the organization rather than waiting to be tasked with something important
- Cultivate trust with the board members and provide regular updates on the work being done and its relevance to the organization
- Highlight strategies for long-term organizational well-being that relies on hard data that cannot be easily disputed
- Initiate conversations with the incoming CEO to understand their strategy for the future of the organization
- Discuss the organizations culture and find ways to integrate the CEOs visions with the company’s core values
- Prioritize transparency with employees as well as management to communicate your interest in the future of the organization
The data on the CHRO turnover after the change in CEO is concerning, but it is also informative, telling leaders of the trends that are leading the way right now. The CHRO’s role in guiding future leadership can help a business survive a transition with greater ease, and it can also secure their position at the organization more firmly. In 2025, CHROs need to take charge and showcase their importance at the organization in order to make the most of their time there.
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