As managers from other divisions are increasingly appointed to leading positions within human resources, HR internally is suddenly becoming fashionable, Chris Rowe writes in his essay for finews.first.


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The news that Standard Chartered has moved its former treasurer and chief risk officer, Pamela Walkden, into the chief human resources officer (CHRO) role as part of the executive committee may not have outstripped Brexit or Donald Trump for column inches in recent weeks, but is notable for illustrating a growing trend within financial services (FS).

From a sample of 30 of the world’s largest banks and insurers with a global footprint – taken from the «Forbes 2000» and including Goldman Sachs, Allianz, AIG, UBS, Wells Fargo, ANZ and Société Générale among others – 43 percent now have an executive from a non-HR background leading the function globally (and of whom more than 90 percent are in their first HR role), with the CHRO an executive committee member in nearly 80 percent of cases.

In reality, much of the output of HR is valuable as ever, but a number of factors have shifted perception significantly both internally and externally.

«Human resources has been much-maligned at an operational level for being reactive»

The neo-classical growth model cites economic growth as a product of capital and labour, yet some might argue that FS has historically been less than exemplary with respect to the latter, via development and retention of its people. This is particularly surprising when for many, banks in particular embody capitalism itself.

In many quarters within the industry, human resources has been much-maligned at an operational level for being reactive, non-strategic in outlook and fundamentally not «getting» the business. Subsequently, in certain organizations it has suffered something of an internal image problem and its resultant lack of prominence and proximity to the business created a vicious circle where the business/HR relationship was concerned.

«The global financial crisis brought HR leadership into the spotlight in a way rarely previously seen»

Whilst a simplified view, pre-crisis provided the top and bottom lines looked good, in the eyes of the market much of what occurred in the spaces in between received less attention. Accordingly, topics like culture, conduct and employee relations were deemed the «fluffy» stuff and suggesting to a revenue generator or COO in the heady days of 20 percent plus return-on-equity that their next internal role lay within HR, may have elicited a colorful response at that time.

However, the global financial crisis brought HR leadership into the spotlight in a way rarely previously seen. Shotgun M&A marriages, bankruptcy and complex termination agreements drove a myriad of workforce planning, employee relations and communications challenges and for many, this was the time in which HR re-earned its stripes.

«Equally, remuneration in the post-crisis environment has become fiendishly complex»

The post-crisis environment within FS is one in which culture, conduct, cost and remuneration are staple foods to an executive committee and board of directors. Culture and conduct are associated not just with underpinning the crisis itself, but reappear within virtually every scandal that has been exposed since, from Libor to FX to sanctioned trading. Accordingly, crafting and embedding the cultural values that regulate a firm’s behaviors and norms has become far more critical than ever, and strong HR leadership drives this diffusion through the organization.

Equally, remuneration in the post-crisis environment has become fiendishly complex from a regulatory standpoint, and HR have a critical role in ensuring firms remain competitive with counterparts whilst balancing the demands placed on them by legislation such as CRD IV and the Senior Management Regime (in Europe).

It is notable that of the firms in the sample wherein HR is still led by an HR professional, an increasing number of these have stepped into the role having previously led the group reward function previously, such is the importance of being truly leading-edge on the topic. Additionally, the cost-income ratio remains the metric to fear and HR professionals have to lead the way where achieving «more with less» and maximizing the return on deployed human capital, is concerned.

This is before even contemplating the «war for talent», which whilst structurally altered (for the best fixed income derivative traders then, read the brightest legal and compliance minds now), still exists. Accordingly, HR has a voice and seat at the table as never before.

«It has had a signalling effect to the rest of the organization that HR is actually a good place»

Individuals from outside FS may read this with a mix of curiosity and indifference; other industries from oil and gas, pharmaceuticals to FMCG have interchanged executives through the HR role via other functional domains or divisional CEO roles, for years. The trend of moving non-HR executives into the role within FS has though had two clear advantages.

Firstly, its increased profile has shone a light on some of the innovation and thought leadership undertaken by existing HR professionals and re-painted the function as a strategic lever in the firm. As such there is a clear quid-pro-quo at work here; non-HR executives may be able to boost the profile and «internal stock price» of HR via their network and standing, but still need to surround themselves with the expertise of seasoned HR executives with deep knowledge of the core HR subject-matter such as reward, talent and learning to be truly effective.

Secondly it has had a signaling effect to the rest of the organization that HR is actually a good place to be and one CHRO particular (a former banker) confided he had been «inundated» with interest in working in HR from other departments within his firm since taking office. In return, an increase in HR professionals taking up roles within the business would add a certain sense of symmetry to this talent shift, but for what remains a conservative industry, this is still a relative rarity.

However, the fact remains that with HR leaders stepping into the role from risk, legal, communications and revenue-generating roles globally, internally HR is suddenly fashionable.


Chris Rowe is a Director of Leathwaite and leads the global HR practice, in addition to running the EMEA (ex-UK) business from Zurich. Chris has more than 15 years of industry experience, having recruited into the financial services industry since 2000, including board and MD-level appointments.

Prior to joining Leathwaite in 2005, he spent five years at a well known financial services recruitment organization as a senior consultant, covering the finance space and prior to this he worked in technology field sales, having started his career in 1998. He has delivered work in the U.S., U.K. and numerous continental countries. Chris Rowe holds an Executive MBA from Cass Business School in London and a masters' certificate in executive coaching from Bristol business school.


Previous contributions: Rudi BogniAdriano B. Lucatelli, Peter Kurer (twice), Oliver Berger, Rolf Banz, Dieter Ruloff, Samuel Gerber, Werner Vogt, Claude Baumann, Walter Wittmann, Albert Steck, Alfred Mettler, Peter Hody, Robert Holzach, Thorsten Polleit, Craig Murray, David Zollinger, Arthur Bolliger and Beat Kappeler.