CHRO Turnover and The Decline of Internal Succession

Succession planning for CHROs may not be dead, but it's approaching life support. As the CHRO job has grown more complex and integral to business success, CEOs and boards of directors have raised the bar for the type of executive they seek in the position — a success profile that's increasingly difficult to develop or find in a pool of potential internal successors. 

The result is a growing trend: CHROs are now being hired externally more often, rather than through internal promotions. A comprehensive new study from The Josh Bersin Company, a human capital advisory firm, found that 73% of CHRO appointments come from the outside, data that experts say reflects changing requirements for the top HR job in organizations.   

External Hiring of C-Suite Roles 

A 2024 study from Spencer Stuart, a global executive search and leadership consulting firm, also found that more CHROs are hired externally than other C-suite roles such as CFO and COO. The study found 44% of CHROs were external hires last year, while only 35% of CFOs and 21% of COOs were hired from the outside. 

Josh Bersin, a longtime HR industry analyst whose firm conducted the aforementioned study, said the movement away from succession planning toward external recruiting suggests organizations are seeking a new type of leader in their CHRO. 

The Challenging Rise to the Top  

"Part of the challenge is the HR function is changing so fast organizations can't keep up with it," Bersin said. "They increasingly need agile and business-savvy CHROs who can adapt to change and have proven they can work effectively with boards. Those skills aren't always easy to develop internally, which has made it a very headhunter-driven market." Ron Porter, a former CHRO and senior partner with advisory and search firm Korn Ferry, said it's become more difficult to ascend to the CHRO role of public companies without having previously served as a CHRO. 

"What CEOs look for more today are CHROs who've worked with a board before, who've had experience with executive compensation strategy and who've created an HR agenda directly linked to business goals," Porter said. "It's a bit of a conundrum, because it's harder to be hired into a CHRO role now if you haven't already been one." 

When to Hire an External CHRO 

Alexander Kirss, who leads the CHRO effectiveness research team at Gartner, said a top reason to hire a CHRO externally should be to find an executive with the needed skills, knowledge and experience companies haven't been able to develop in house. Kirss said it's increasingly difficult and time-consuming to produce such candidates through succession planning.  

"Organizations recognize that it's hard for a pool of potential CHRO successors to get the kind of experience they need in house," he said. "So, they simply hire a CHRO from another company." 

Measures of Success 

Succeeding as a CHRO today requires a different profile than in the past, Kirss said. CHROs often need a deeper understanding of the business, specialized expertise such as being able to oversee AI implementations or merger and acquisitions, and the ability not only to effectively engage with boards of directors but also to sit on corporate boards themselves. 

"The job is now about far more than being able to create an efficient and effective HR function," Kirss said, referring to HR's traditional compliance and administrative charter. "It's become more about a CHRO's ability to build new stakeholder coalitions across the C-suite and board of directors and have the business acumen to drive performance toward company goals." 

The growing stature and importance of the CHRO role is illustrated in the trend of more current C-suite executives moving into CHRO jobs in their own organizations, Kirss said.  

"There was a time, for example, when you'd never see a general counsel move into a CHRO job, because it would have been viewed as a step down in terms of prestige and influence in the C-suite," Kirss said. "But today that move can be viewed as a step up. We're also seeing more executives move from operational and technical C-suite roles to take on the CHRO portfolio either as their full-time job or in a dual-hat situation." 

Seeking Specialized Expertise, Financial Fluency

Kyle Forrest, U.S. future of HR leader at Deloitte Consulting, said prior to the past few years, CHROs were typically hired in one of three ways. About one third were promoted from within the HR function; one third came from another department inside the organization like finance, legal or the business itself; and about one-third were hired from the outside. 

"The portion hired externally is higher now than it used to be," Forrest said. "One of the chief reasons is that human capital issues are now a bigger concern for the C-suite and board of directors and sometimes rank as their top priority."

CEOs and boards also have more external options for finding suitable CHROs than in the past, Forrest said, which has contributed to succession planning receiving lower priority. 

"A decade ago, there weren't fractional CHROs and being an interim CHRO wasn't necessarily a popular option," Forrest said. "The skill sets and experience of CHROs also wasn't as diverse as it is today."

CHROs often have experience with a broader set of business scenarios than they've had in the past, Forrest said. Today one company might seek a CHRO with merger and acquisition experience because they're entering into a period of acquisition or another organization might look for a CHRO with expertise in data and AI because they're investing heavily in automation. Still others want CHROs who've been involved in business turnarounds. 

"It's easier to find that kind of expertise externally today, so organizations don't have to try to develop it in-house," Forrest said. 

If a search doesn't identify a CHRO with the specific expertise needed, Porter said organizations often simply look instead for an HR executive with a track record of adaptability. The growing number of such candidates is one reason Porter believes more organizations have grown comfortable hiring CHROs externally. 

"One thing that's reduced the risk of going outside for a CHRO is there are more candidates today with proven adaptability," Porter said. "They've made the transition from one organization to another, or in some cases multiple such transitions, and proven they can adapt to different cultures and business strategies."  

Implications of Rising CHRO Turnover

Experts say another recent trend should have organizations at least rethinking the value of internal succession planning. CHRO turnover is on the rise. Research from global leadership advisory firm Russell Reynolds Associates found the CHRO turnover rate rose 35% in the fourth quarter of 2024, reaching its highest Q4 level since 2019. Should the turnover trend continue, succession planning can help ensure organizations aren't caught flat footed if a CHRO abruptly departs.

"The CHRO role is only getting more challenging, and one thing we're seeing is rising burnout among CHROs who are working incredibly hard to drive organizational performance," Kirss said. "But we're also seeing expanded career opportunities for HR executives who've had success and leveled up in their roles. It's making for an interesting mix of both push and pull factors generating the recent surge in CHRO turnover."

Forrest said research shows turnover across the entire C-suite has been increasing since 2022, not just among CHROs. Rising turnover of CEOs also directly impacts CHRO turnover, he said, since new organizational leaders often prefer to bring in their own CHRO as part of the regime change. 

Succession Planning for CHROs vs. Other C-Suite Roles

The lack of succession planning for CHROs has become HR's version of the cobbler's children going without shoes. While many CHROs champion the value of leadership succession planning throughout the organization, the process is rare in their own back yards.

"There is irony in the trend," Kirss said. "CHROs are often the ones trying to convince their CEOs and boards to invest time and effort in CEO succession planning. But many don't take their own advice when it comes to planning for their own succession. It tends to fall pretty low on their priority lists."

Research shows there does remains significant interest in general succession planning as well as mentoring. SHRM's 2023-24 State of the Workplace report found 49% of organizations said succession planning was a top priority in 2024, while 63% planned to have a formal or informal mentoring program last year.

The Russell Reynolds study also found internal CHRO promotions actually rose in the fourth quarter of 2024, marking a shift from an external CHRO hiring trend in the first three quarters of the year. The data indicates that companies may opt for stability and institutional knowledge during times of uncertainty. 

However, many experts believe the prevailing trend of hiring external CHROs will remain, in part because of the inherent challenges of building and administering a succession planning program. Kirss said many CHROs don't follow through on creating succession plans for their own jobs for a simple reason: Given their expanding workloads they don't feel they have the time or resources to conduct effective succession planning.  

"It's not that many likely couldn't create a strong pool of potential CHRO successors in house, it's just that it's difficult to do and takes a committed focus and effort," Kirss said.

Dave Zielinski is a Minneapolis-based business journalist and a frequent contributor to SHRM publications.