As a maelstrom of forces reshape business conditions, CHROs are being forced to reassess their role. The emphasis in the media is often on the threats facing businesses: disruption to business models and established ways of working, rather than seeking and seizing opportunities. Nevertheless, company leadership, including the CHRO, must stay aware of those opportunities.
One organization currently experiencing rapid growth is the Swedish military defense and civil security company, Saab. With conflict in Europe and geopolitical tensions rising, Western governments are looking to their defense capabilities. This is where a company like Saab, whose business focus for the past quarter-century has been the technology of national defense, comes into the spotlight.
When Saab sets out to hire a data analyst, it is not only competing with other defense companies, not even manufacturers, but with banks, mobile phone companies, and even retailers.
There are two major types of change underway at Saab, explains Lena Eliasson. The first, straightforwardly enough, is rapid growth. Rising tensions around the world and, most directly, the Russian invasion of Ukraine, have seen a surge in Western governments’ defense spending. “The tension in the world is the reason why we are growing,” acknowledges Eliasson. As a result, organic sales growth in 2023 stood at 23%.
The second dimension of change is digital transformation. As in so many businesses across sectors, digital technology is re-engineering products and services and reshaping company structures.
Either dynamic would keep any CHRO busy. Together, they throw up spectacular challenges. Take recruitment. “The main challenge for us is making sure that we have the talent and competencies we need,” says Eliasson. Saab recruited close to 2,500 net new employees globally in 2023, representing a 13% increase in headcount. Today, Saab has around 24,000 employees.
Scaling up to meet that level of demand for talent is an exacting task but the company’s technological transformation means it is essential to brave the parts of the labor market where competition for talent is fiercest.
Industry convergence around digital technology has thrust Saab into competition with the whole business ecosystem. “Everyone is looking for the same people,” says Eliasson. When Saab sets out to hire a data analyst, it is not only competing with other defense companies, not even manufacturers, but with banks, mobile phone companies, and even retailers.
One part of the solution has been refocusing on competencies. CHROs cannot afford to base recruitment decisions on outdated assumptions, such as older workers lacking the energy and drive of younger ones. “It doesn’t matter your age. It doesn’t matter how long you’ve been working. The key thing is what you bring to the table,” says Eliasson.
“It’s so important to have an attractive employee value proposition,” says Eliasson. That means taking the employee’s view of what it is like to work for the company. “It’s your job. It’s your colleagues. It’s your development plans. And it’s the purpose of the company,” she explains. “We need to show what we can offer and then deliver that.”
At a time when technological change could make valuable employees feel their skill sets are becoming obsolete, a focus on learning and development is vital. Saab has responded with a substantial investment in helping valued employees adapt to and keep pace with innovative technologies.
Over the past five years, Eliasson explains, Saab has built up an online digital university to support employee development, particularly in relation to new technologies. “Many of our engineers have never worked for companies that offer this sort of set-up,” says Eliasson. “I think this is helping make us a very attractive employer.”
Saab reinforces its training programs with innovative working structures that allow employees to gain experience working with key growth technologies. “We’re exploring the internal gig economy,” explains Eliasson. “You have your normal working tasks, but then you can take part in other projects throughout the company.” This is already helping engineers who have a background in older, more established technologies to accumulate hands-on experience in new fields. It is another factor in Saab’s appeal to employees, says Eliasson. Moreover, it helps the HR function keep up with the demand for talent.
Rapid growth and transformation can challenge a company’s existing culture. Sometimes, this is healthy; not everything a company has done in the past will be appropriate for its future. But change can also erode a company’s identity.
Eliasson is clear that CHROs must be champions of upholding that identity through company culture, not least in transmitting the main pillars of that culture to new hires. Saab’s values and the practical requirements of its code of conduct, Eliasson says, are essential to how employees work. “That is the core that has to be lived out throughout the organization,” she reflects.
That is not to say that CHROs should see culture as frozen in time. On the contrary, it should evolve as a more diverse range of people, with different perspectives and innovative ideas, join the company. “When we bring new talent in, we are looking to them to help develop the culture,” Eliasson confirms.
Saab’s focus on culture at a time of rapid growth appears to be paying off: it has climbed the rankings to become a top five employer in Sweden amongst those with MSc, BSc, and IT qualifications.
“For CHROs of global businesses at least, HR has shifted from a local-centric to a global-centric model, influenced by the convergence of regulatory and legal requirements and the need to search far and wide for the right talent mix.”
A common refrain among CHROs is that CEOs and stakeholders are asking them to do more. Eliasson is acutely conscious of the demands of a changing business environment. “Everything is moving so fast,” she says. CHROs and their teams need to be comfortable moving at pace, too.
Leading the adoption of new technology within the HR department falls to the CHRO, says Eliasson. She is enthusiastic about the benefits of new technology but stresses the need to manage its implementation with care and a sensible attitude. “I don’t want to have an IT project that drags on for years,” she says.
But modern people-analytics systems can give the HR department new insights into the effectiveness of transformation programs. “I can understand what people think about how we are growing,” says Eliasson. “It’s a big help to have this technology as we grow.”
What about the impact of change on CHROs themselves? They are not immune to the upskilling and learning imperative. “You need to develop all the time,” says Eliasson. “I have to keep learning to stay relevant.”
As well as looking outside the HR function to see what else is changing in the business, external conversations can offer useful benchmarking that’s relevant to everyone in HR, Eliasson confirms, saying she urges all her team to “get out and about.”
Maintaining breadth of vision is particularly important, especially amid modern tendencies toward niche specialization. “HR jobs used to be broader,” Eliasson notes. “Everyone did a little bit of everything. But today everything has become more complex. You can’t fit all the competencies that HR needs in one human being.”
Another change for CHROs is that HR has become “much more strategic,” says Eliasson. She is clear that this reflects a fundamental shift in how HR contributes to business success. It is vital for the CHRO to understand and contribute to high-level strategic discussion.
Eliasson also suggests that for CHROs of global businesses at least, HR has shifted from a local-centric to a global-centric model, influenced by the convergence of regulatory and legal requirements and the need to search far and wide for the right talent mix. “Legislation is not just shaped county-by-country now,” she points out. Companies should consider integrating key HR systems such as payroll and helpdesk, at the continental level in some cases.
Yet for all that HR is changing, some things remain the same. Even as technology becomes a priority for almost all businesses, CHROs must ensure they stay focused on fundamental human priorities. “We have to be close to people – we’re all flesh and blood!” says Eliasson.
For CHROs tasked with helping their businesses navigate through rapid growth and fundamental transformation, this is a critical insight. Technology may be reshaping all our futures, but the human element remains central to all of them.
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