Understanding the Difference Between Chief People Officer (CPO) and Chief Human Resources Officer (CHRO)

Roles are always changing to meet new challenges and opportunities in corporate leadership. This is why companies need skilled HR personnel who can effectively adapt and help guide the organization while leveraging HR technology.

Among these roles, the Chief People Officer (CPO) and the Chief Human Resources Officer (CHRO) are considered crucial.

Although they may sound similar and are often used interchangeably, these roles feature distinct functionalities, specifically in effective talent management and employee engagement.

But, what exactly differentiates a CPO from a CHRO, and how do these roles contribute to the success of an organization?

Let’s discuss their responsibilities, objectives, and how to choose the role that best aligns with your organization’s needs.

A Chief People Officer (CPO) is a C-suite executive responsible for the strategic direction of an organization’s human capital. They go beyond traditional HR tasks to focus on the entire employee journey, shaping the company culture, and driving strategic talent initiatives.

Furthermore, CPOs are in charge of ensuring that your people strategy aligns with your business goals, leading to a more engaged workforce and a thriving workplace environment.

CPO duties include:

• Human capital leadership through targeted strategies.
• Guiding organizations in identifying and retaining top talent effectively.
• Strategizing and optimizing people-focused initiatives.

A Chief Human Resources Officer (CHRO) is responsible for the operational aspects of human resources management. This role involves developing and implementing HR strategies that align with the overall business objectives, managing talent acquisition and retention. They also ensure compliance with labor laws and foster employee development and engagement.

CHRO duties include:

• Overseeing the recruitment of top talents and hiring the best candidates
• Designing and implementing training and development programs
• Developing strategies to retain and nurture employees
• Establishing performance management systems
• Creating succession planning strategies to ensure leadership continuity
• Managing competitive compensation packages
• Leading change management initiatives in the organization

While both roles focus on maximizing the potential of an organization’s workforce, they each bring unique perspectives and priorities to the table. Check them out below:

Now that you know the similarities and differences between CPO and CHRO, you may be thinking what role best suits your organization. Here’s a guide to help you:

• Small to Mid-Sized Companies: Smaller organizations may benefit more from a CPO if they are focusing on building a strong organizational culture and improving employee engagement from the ground up. A CPO can offer strategic guidance and foster a cohesive workplace culture, which is vital for growth.
• Large Enterprises: Larger companies with complex HR operations and a need for strict regulatory compliance and payroll management might find a CHRO more suitable. A CHRO can manage extensive HR functions, ensure compliance, and develop scalable talent strategies.

• Innovative and Fast-Paced Industries: Industries like tech startups, business process outsourcing, and creative fields may prefer a CPO who can drive cultural transformation, support innovation, and enhance the employee experience. These industries often require flexible and dynamic people strategies to attract and retain top talent.
• Regulated and Traditional Industries: Sectors such as finance, healthcare, and manufacturing, which have stringent compliance requirements, might benefit from a CHRO. A CHRO can ensure that all HR practices adhere to regulations and support the organization’s operational efficiency.

• Focus on Culture and Engagement: If your strategic priorities include transforming your workplace culture, increasing employee engagement, and aligning people strategies with business goals, a CPO is the ideal choice. The CPO’s role is to advocate for employees and lead cultural change initiatives.
• Focus on HR Operations and Compliance: If your organization’s goals are to optimize HR processes, ensure compliance, and develop robust talent management systems, a CHRO will be more effective. The CHRO’s expertise in HR operations and regulatory compliance is essential for these objectives.

By assessing these factors, you can determine which role will best support your leadership team and drive organizational success.

Now that you know whether your company needs a CPO or CHRO, you also need to know how to choose the right person for the role.

An effective CPO  possesses the following key skills and competencies: strategic thinking, strong communication abilities, and a deep understanding of organizational behavior.

If you are a business leader or an executive, here are some tips you can consider when choosing a CPO:

Tip 1 : Evaluate Strategic Vision

Evaluate the candidate’s ability to craft a people strategy that seamlessly integrates with business goals and fuels organizational success.

Tip 2: Assess Communication Skills

Assess for strong communication skills as the CPO will need to clearly convey ideas and inspire collaboration across all levels.

Tip 3: Understand Culture Fit

Look for someone who aligns with your company’s values and culture, and can lead effective cultural transformation initiatives.

Tip 4: Check Experience in People Management

Prioritize candidates with a demonstrably successful track record in people management strategies, fostering diversity, and boosting employee engagement.

On the other hand, a CHRO must excel in the following critical areas: human operations management, compliance, and talent development.

If you’re looking to hire a CHRO or planning to develop your current HR leadership, here are some tips you can use to choose the right person for the job:

Tip 1: Evaluate Experience in HR Operations

Look for candidates with extensive experience in managing and optimizing HR operations, ensuring that they can handle the complexities of your organization’s HR needs.

Tip 2: Assess Regulatory Knowledge

Ensure the candidate has a deep understanding of labor laws and regulations to maintain compliance and avoid legal issues.

Tip 3: Examine Talent Management Skills

Choose someone who has a proven track record in developing and implementing effective talent management strategies, including recruitment, retention, and succession planning.

Tip 4: Check for Strong Leadership Abilities

Look for a candidate who demonstrates strong leadership and change management skills, as they will need to guide the organization through HR transformations and cultural shifts.

Both the CPO and CHRO play vital roles in orchestrating an organization’s success. Recognizing their areas of focus can lead to better decision-making and an empowered workforce.

If you’re seeking to elevate your HR and people management capabilities, Sprout offers solutions for each stage of the employee lifecycle, which includes employee and workforce management, talent acquisition, payroll management, data analytics and reporting, and performance management.

These are all tailored to streamline your HR function, enhance efficiency, and ensure compliance, regardless of your company size.

Give your organization an edge by hiring the best talent! Let Sprout help you get to the next step. Contact us today!