Organizations large and small need a human resources (HR) leader who is capable of ensuring that the people who work there are qualified to do their jobs. This entails more than simply accepting applications and extending job offers to excited candidates. An HR executive is a strategic thinker who understands both the functional areas of HR and the strategic mission of the organization and combines that knowledge to support the overall company goals of attracting and retaining workers who embrace the principles and vision of the company.
Leadership, Hierarchy and Organizational Structure
Many companies have several layers of management, ranging from front-line supervisors to executive vice presidents. To understand the functions of human resource management and where an HR executive fits into the organizational structure, you need to know the typical organizational hierarchy where an HR executive works. For example, in ascending order, a typical organization's leadership ranks might look like this:
- A team leader oversees the tasks and duties of several team members. Many team leaders don't have the authority to hire and fire employees. However, they are responsible for the day-to-day operations carried out by employees. In the HR department, a team leader might be an HR specialist with several years of experience or training in a functional area.
- A supervisor manages the work of several team leaders. The supervisor might also be responsible for ensuring that team projects meet the company's performance expectations and for making recommendations for new hires and employees subject to discharge.
- Managers may be in charge of running a department or leading supervisors. They might have the final decision-making authority on new employees and the promotion or termination of workers. Managers in large, multilayered companies report to directors or vice presidents and may be responsible for ensuring that team projects are completed on time. A department manager may lead several supervisors and report to a company director. In the HR department, a manager might supervise several HR specialists and report directly to the HR director or the HR executive.
- Directors who work for international companies or organizations with geographic divisions may report to vice presidents. They may have a team of managers who report to them. For example, a California-based director may report to a western region vice president, and the managers who report to the director could be responsible for operations in several locations within the state. In large organizations where the HR functions are geographically dispersed, a regional HR director could report to an HR vice president.
- Vice presidents of an organization – and there may be assistant vice presidents or executive vice presidents, depending on the size of the organization - report to the chief executives. The C-level includes such positions as chief operating officer, chief financial officer and chief executive officer. Conglomerates may have a chief human capital officer (CHCO), but an HR executive could be at the C-level or the director level, depending on the organization size and hierarchy.
When the human resource function of an organization includes various levels of staff, the organization of the HR department mirrors that of the organization. HR staff perform tasks within each HR functional group: benefits and compensation; recruitment and employment, or talent acquisition; labor and employee relations; human resources information systems (HRIS); and employee training and development.
Functions of Human Resource Management
The title "HR executive," typically refers to an HR leader who works for an organization with many levels of staff and leadership. That's not always the case, but the executive role generally is reserved for the highest level of HR leadership with HR staff and managers who report directly to the HR executive.
An HR executive's role throughout the separate functions of human resource management is broad and varied. There is breadth and depth to the HR executive position, but the specific tasks of an HR executive vary according to the size of the organization and the type of latitude and executive authority given the HR leader.
Within large human resources departments – the ones that support a thousand or more employees – you may have 15 to 20 HR staff and managers that work across the various HR functional areas: benefits and compensation; recruitment and employment (often referred to as talent acquisition); labor and employee relations; and HRIS and training and development. As the names of each function area suggest, specialists report to functional managers. An HR executive should be knowledgeable about every functional area of the HR department, and in some cases, be able to pitch in and lead or directly manage the specific functional tasks that staff specialists perform when there is not an HR functional area manager on staff.
Benefits and compensation managers supervise specialists in this area who coordinate benefits for employees, including organizing open enrollment events for employees and counseling new employees on the company's benefits structure. Some benefits specialists work with front-line supervisors and department managers to resolve issues related to workers' compensation or injury records for the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA), and Family and Medical Leave Act (FMLA) leaves. They also coordinate benefits for discharged employees, whether those are health benefits or severance packages that contain extended benefits. Compensation specialists often work with hiring managers to determine whether the pay rates the company offers are competitive or consistent with market trends. Also, they may be involved in salary administration, constructing variable pay plans and ensuring the company complies with federal and state employment laws related to pay.
The HR executive is ultimately responsible for HR department compliance and should be apprised of all activities related to OSHA, FMLA and the Fair Labor Standards Act (FLSA). If a current or former employee files a claim or a lawsuit against the company, the HR executive may be asked to testify on behalf of the company. Also, when an HR executive lobbies the organization's executive leadership for support of compensation plans or benefit structure, it should be done from an informed perspective, which can only come from oversight of the company's benefits and compensation structure.
A talent acquisition manager leads the recruitment and employment function of the HR department. However, the HR executive leads the strategic direction of talent acquisition to ensure workforce planning meets the current and future organizational needs. Recruiters and employment specialists usually handle tasks such as posting job ads, conducting preliminary interviews to identify qualified candidates, and authorizing background investigations for candidates to whom the company extends a conditional job offer. The talent acquisition manager and the HR executive generally are responsible for determining whether the labor market can sustain the company human resources needs. For example, the manager and HR executive might examine labor market data or cultivate relationships with universities to create a pipeline for qualified candidates who will eventually enter the labor market.
An HR executive who charts the strategic path for the organization's employee and labor relations may be involved in developing or leading the management response to union organizing campaigns if the company is looking to remain union-free. If the company already is unionized, the HR executive may be focused on cultivating a productive and effective labor-management relationship with union officials, particularly if the relationship has been strained or contentious. In addition to being the point-person for employee relations issues that involve formal charges or litigation, the HR executive might work with the employee relations manager on developing proactive measures for improving the employer-employee relationship. This could include seeking financial support for initiatives such as an employee recognition or employee rewards program, or launching special events like awards dinners and employer-sponsored excursions and other perks.
An HR executive's role concerning human resources information systems may depend on the executive's level of expertise related to technology that supports organizational goals or technology that can expand to accommodate organizational growth and improve the efficiency of HR operations. In some cases, an IT professional with expertise and knowledge of the HR functional areas may be the point of contact for HRIS management, and in other cases, the company may outsource this function if it doesn't have capable and reliable internal resources. An HR executive may have the decision-making authority as to whether the company uses internal resources or outsources its HRIS functions, as well as the authority to budget HR funding for hiring IT experts or engage an outsourced firm.
Employee training and development is one of the functions of human resource management where an HR executive's expertise and strategic vision are especially helpful. Developing a strategy for improving the skills of the company's workforce and designing learning tracks for high-potential employees that are identified as future leaders is a job for an HR executive. Specialists in the training and employee development area of the HR department are responsible for coordinating training schedules, facilitating new-hire orientation classes, locating resources for internal training opportunities, and identifying resources for workshops and seminars that may interest employees. The HR executive sees the big picture where training and employee development are concerned and promotes this vision during executive leadership meetings.
The Path to Success for an HR Executive
Many HR executives methodically chart a succession plan, starting out as an HR generalist or HR specialist and constantly looking for upward mobility throughout an organization to the ultimate goal of becoming the chief executive for human resources. That said, there are other paths to achieve the top HR role. For example, in the federal government, there are HR leaders at the GS-15 level and Senior Executive Service ranks who began as GS-5 level administrative employees. (In the federal government, the GS-15 and Senior Executive Service levels are the top rungs of leadership, right below political appointees). On the other hand, obtaining a degree in HR management may be the first step for aspiring HR executives. A bachelor's degree can get your foot in the door – particularly a degree in HR management. Other degrees that can put you on the path to becoming an HR executive are in business management or business administration. Work experience and an advanced degree, such as a master's or doctorate can increase your chances of becoming qualified based on academic credentials, although you can study for an advanced degree while you're working in the field. Certifications through the Society for Human Resource Management or the Human Resource Certification Institute also are avenues to pursue should you want to demonstrate your functional expertise in addition to your ability to engage in strategic human resource management.
How Much Does the Head of Human Resources Make?
Salaries for HR executives depend on several factors and can range from low five figures to high six-figure salaries. The U.S. Bureau of Labor Statistics Occupational Outlook Handbook indicates the 2017 median pay for HR managers is $110,120 annually, and the demand is expected to rise by nearly 10 percent through 2026. However, there are significant differences in pay between HR managers and HR executives. According to an Allegis Partners' November 2017 report titled, "HR Executive Pay Trends," the median pay is $560,000 for HR executives who work for companies where revenue is less than $1 billion a year. In 2016, their counterparts who work for companies where revenue falls between $1 billion and $5 billion a year earned approximately $940,000 annually. HR executives with large conglomerates can earn low seven-figure salaries, some as high as $2.1 million for organizations with more than $15 billion in annual revenue.