Since 2017, there's been a consistent, declining trendline for internal CHRO session. In 2017, 70% of CHROs were internal successors compared to 61% in 2018 and 53% in 2019. 2020 saw a stabilization of internal CHRO succession where 14 (52%) of the Fortune 200 new CHROs were internal CHRO successors. Internal successors had an average organization tenure of over 20 years prior to CHRO appointment. 11 (79%) of the Fortune 200 new CHROs had at least 15 years of tenure in the company prior to being appointed CHRO. The remaining 3 (21%) new CHROs had five or fewer years of tenure in the organization prior to CHRO appoint ment.
2020 represented the lowest overall turnover in the Chief Human Resources Officer role since this report's inception and a 25% reduction in turnover from 2019. 27 new Chief Human Resources Officers came into the role of a Fortune 200 organization in 2020, representing a nearly 15% turnover rate and implying that organizations replace their CHRO every 6.67 years.1 Turnover within the Fortune 200 was roughly evenly distributed by the organization's fortune ranking. The Fortune 50 saw seven new CHROs, Fortune 51-100 saw six new CHROs, Fortune 101-150 saw seven new CHROs, and the Fortune 151-200 saw seven new CHROs in 2020.
The Financials sector held the highest absolute number of new CHROs with seven CHRO changes (out of 36 organizations in the Financial sector within the Fortune 200). Hotels, Restaurants, and Leisure (67%), Aerospace & Defense (50%), and Household Products (50%) represented the highest sector-specific percentage of CHRO turns.
The most frequent starting months for a Fortune 200 new CHRO were February, July, and August with four new CHROs in each month. The global pandemic did not appear to significantly impact the starting month for new CHROs. When compared to the previous three CHRO Trend reports, the starting month for CHROs remained mostly constant, though total volume of starts declined in 2020 consistent with the lower number of Fortune 200 new CHROs.
About This Report
The Fortune 200 CHRO is educated, with depth in the Human Resources domain, and likely was appointed CHRO from a top Human Resources Business Partner role. 96% of the Fortune 200 new CHROs had a bachelor's degree or equivalent and 56% held at least one graduate degree. The most common undergraduate degree for the Fortune 200 new CHROs was Psychology at 22%. This is followed by Business Administration/Management (19%) and Industrial & Labor Relations (11%). The University of Michigan graduated the most Fortune 200 new CHROs from undergrad at 7%. An MBA was the most prevalent graduate degree for the Fortune 200 new CHROs with 15% of CHROs holding an MBA. Columbia University graduated the most Fortune 200 new CHROs from graduate school at 7%.
Deep experience in Human Resources was an increased priority for CEOs selecting a new CHRO. Since this report's inception, the percent of CHROs with limited to no experience in Human Resources prior to taking on the Chief Human Resources Officer role has been steady at ~20%. In 2020, 93% of Fortune 200 new CHROs had depth in Human Resources.
The pathway to the CHRO role runs almost exclusively through a top Human Resources Business Partner role. 42% of the Fortune 200 new CHROs were in an HRBP role prior to being tapped for the top Human Resources job. An additional 42% previously served as a Chief Human Resources Officer or Chief People Officer. Just 12% of Fortune 200 new CHROs served in a Center of Excellence (COE) immediately prior to their appointment, a mix of talent, compensation, and Human Resources operations roles.
We produced this information by analyzing the Fortune 200 organizations (based on the 2020 Fortune 500 list) and publicly available information for Chief Executive Officers, Chief Financial Officers, and Chief Human Resources Officers. We additionally spoke with many Chief Human Resources Officers and their teams within the Fortune 200 to validate data where publicly available information was not available.
In total, 181 organizations had a sitting, identifiable CHRO at the time of this report. The trends highlight those 181 organizations of the Fortune 200. Some organizations, such as Berkshire Hathaway, do not have a sitting Chief Human Resources Officer. In those situations, we did not include the company in the analysis.
Zac directs the daily operations of the Talent Strategy Group, including strategy, research, and finance across all lines of the TSG business. He frequently consults with the Boards and Executive Teams of the world's most advanced organizations on Human Resources and Talent Management with a focus on the intersection of people and organizations, and enabling the full potential of both. Zac graduated Summa Cum Laude from Arizona State University with a Bachelor's of Science in Economics. He can be reached at email@example.com.