Rewriting the CHRO role in the new normal

Managing and aligning stakeholders

What does all this mean in practice?

CHROs and their teams should share the company’s long-term vision directly with employees, and in Germany, with works councils. To bolster credibility, they should resist the temptation to communicate the details of the project in a piecemeal fashion, but should be completely upfront right from the outset on the planned reduction in the headcount and when it will be enacted.

After the cutbacks have been completed, retained staff should be reassured that the process is over, that they themselves will not be affected, and that their future at the company is full of opportunity. Conversely, any belated increase in the number of layoffs, or reframing of the reasons for cutbacks, would diminish trust in both the leadership and the transformation. A second round of layoffs after a short interval would be even more damaging.
Indeed, any significant rift between the corporate center and the local workforce can derail any turnaround. This is a particular challenge in Germany. Top global decision makers, who often devise the transformation strategy, tend to find German co-determination a very foreign concept, and can be frustrated by it. They may soon lose confidence in their ability to implement the planned changes, and sometimes even decide to exit the German market. To prevent this outcome, early and sustained communication is crucial.

This means dealing with the works councils proactively - identifying their rights and needs, involving them from the beginning and keeping track of their demands. The aim is to build a trusting relationship that remains steadfast over the course of the project.

However, communication with employees should not be left entirely to the works councils. The CHRO team must do everything possible to ensure that the company’s reputation as a fair employer is always maintained, both internally and externally. Controlling the narrative through the media is essential, not least because potential future employees and clients constitute part of the audience.

In summary, to secure a successful transformation, the CHRO team now has the important responsibility to communicate the rationale behind the planned changes not only to departing employees, but also to those who remain. Especially when the war for talent may conflict with the need for restructuring, any sustainable workforce reduction program must ensure that the employer brand remains attractive both to key existing employees and to potential future recruits.

Rewriting a new role for the CHRO is not a fad, but a necessary action that will have a major impact on the everyday effectiveness of the boardroom, the more so because the costs of delayed or failed turnarounds are increasing. However, a successful outcome will depend on the individual CHRO’s willingness and ability to adapt, and on excellent cross-functional teamwork among senior leaders.