In the rapidly evolving business landscape, the CHRO role continues to be indispensable for organizational success. According to a recent Accenture survey, 89% of CEOs believe CHROs should have a central role in driving long-term growth, highlighting the increasing recognition of HR’s impact on organizational performance and culture. However, only 45% of those CEOs are creating the conditions to allow CHROs to have an impact.
A clearer view of the changing priorities and challenges faced by CHROs will enable other members of the C-suite to collaborate more effectively and leverage HR’s potential to achieve business objectives.
Over the past two years, we’ve collected data from 10 heads of the HR or people function and over a dozen of their direct reports responsible for talent, learning and organizational development to identify those priorities.
These leaders represent a range of industries, including consumer packaged goods, retail, healthcare, manufacturing, technology, aerospace and defense, and a range of organizations, from private sector multinationals to nonprofits. Despite these differences, several common themes emerged as strategic CHRO priorities based on their experiences.
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Our goal in sharing these findings is to illuminate the path forward for CHROs and their teams, providing practical guidance to inform strategic decision-making. We aim to foster a deeper appreciation for the transformative power of HR and to encourage a more integrated, data-driven approach to people management that aligns with the overall business strategy.
1. Transforming HR through technology and strategic integration
Upgrading HR technology is seen as core to enabling the HR function to become more data-rich and enhance strategic credibility. CHROs are prioritizing more visualizations and building infrastructure like data lakes to support deeper analytics. They’re also heavily focused on applying technology to automate processes, clean up and collect data, and generate reports from HRIS tools like Workday.
While many aspire to adopt predictive analytics and AI, they are still streamlining operations and integrating systems. Some are experimenting with AI (e.g., in generating job descriptions), while others are focused on building clean data structures to provide solid inputs to AI tools in the next few years. HR technology was cited as the top area for new human capital investments.
CHROs are also focused on deciding which HR functions need to be tailored to individual needs, such as personal development plans and career paths, and which processes should be consistent across the organization, like performance evaluations.
Other trends in the HR change space include the shift to a skills- and capabilities-based job architecture, which is seen as offering the potential to be more equitable while enabling more flexible workforce deployment. This shift often causes ripple-effect reorganizations within HR. Some CHROs aim to transition from a transactional or enforcer role to a trusted strategic partner, viewing people analytics as an approach to gain credibility with business executives who are used to reviewing operational dashboards.
Additionally, some CHROs are focused on ensuring that their HR practices support a culture of rapid prototyping and a “fail fast, then iterate” approach, which aligns with their businesses’ emphasis on innovation and product development.
As CHROs navigate these complex transformations, they must also address several critical questions to advance their HR strategies effectively: How can organizations build more muscle around resilience, innovation relative to each function and upskilling? What are we overlooking in AI, and how can we best use tech as an enabler? Where can we use predictive analytics to be proactive?
CHROs shared intentions to develop their teams’ technological and data capabilities to leverage automation and gain predictive insights into performance and employee retention risks. Current priorities emphasize automation and data management over the softer elements of the employee experience, but CHROs see the need for balance with a positive employee and candidate experience, preserving the employee value proposition and cultural integrity.
One recommendation is to approach automation decisions selectively. It is tempting to automate the most repeatable processes and create a consistent experience, but it can also seem impersonal if overused, negatively impacting both internal engagement and external brand perceptions.
For example, compliance training can be automated, but leadership development for middle and senior managers is best conducted in cohorts, allowing time for networking and relationship building. Automated pre-boarding processes are efficient, but welcoming new hires should be a personalized, warmer experience.
2. Leading change and organizational transformation
As the second most common priority, leading change is crucial for CHROs because it directly impacts the organization’s ability to sustain growth, maintain a cohesive culture and develop future leaders. Effective change management ensures that the HR function not only supports but also drives strategic business objectives, ultimately contributing to the company’s long-term success and resilience.
Executives are focused on managing growth and seeking ways to scale the HR function in tandem with business expansion. This growth may be organic or driven by acquisitions, with several companies experiencing sustained double-digit compound annual growth rates. It also often necessitates automation and restructuring to leverage or make smart HR tech investments.
One CHRO cited breaking down departmental silos and adopting agile, customer-centric approaches, like those used by Amazon, to drive change and innovation. Managing change and transformation is often tied to listening campaigns and culture management to ensure intentionality and avoid cultural dilution as companies grow rapidly and integrate new talent.
Honoring the company’s legacy emerged as a recurrent theme. Driving factors include the introduction of new employee value propositions, updated talent strategies, new leadership and founder transitions. Responses to these challenges include revising cultural principles, creating new organizational structures to align with future workforce needs, and updating skill and competency frameworks.
Many CHROs are also willing to experiment with pilots and incubators to test new approaches and drive innovation. Several CHROs noted that organizational design was either neglected or poorly managed by leaders without proper governance, resulting in inconsistent career pathing, inadequate successor preparation, and misaligned job leveling and spans of control. This highlights the need to build organizational design capabilities to ensure effective and consistent talent management.
Enterprise-wide digital capability enhancements, or even complete overhauls, are driving significant change and restructuring, particularly within tech companies. As some organizations grow, they are wary of developing a culture of complacency or bureaucracy.
To counteract this, companies are implementing leadership training and organizational effectiveness techniques, such as Gap/Breakthrough, and recommending essential readings for leaders, such as The Founder’s Mentality, The Innovator’s Dilemma and The Geek Way.
3. Implementing succession planning
Succession planning, often integrated with performance management and talent assessment for the leadership pipeline, was frequently a top priority but a weak process. It often involved focusing on pay differentiation, driven by the need to address executive retirements and ensure effective knowledge transfer. One CHRO remarked, “We want succession planning so good you could replace the entire executive leadership team, and we wouldn’t miss our numbers for three years.” The goal is to develop multifluent, adaptable leaders to support and scale company revenue.
Because successor development is crucial for maintaining a robust leadership pipeline, it’s often central to succession planning. While tech-enabled learning is becoming prevalent for the general workforce, leadership development remains a higher-touch process that involves cohorts designed to build networks and collaboration skills. CHROs are seeking ways to attract participants to leadership classes and demonstrate clear ROI, ensuring that senior executives see the value in having their top talent attend.
A common approach CHROs cited within succession planning involves talent optimization, particularly through intentional career pathing and lateral rotations for successors to critical roles. More mature companies rely on these rotations to retain talent and promote continuous learning, but this requires carefully curated rotational roles and trust between managers. The definition of “critical roles” varied across organizations, prompting CHROs to ask important questions like, “Where on the career path are the critical points of failure? Is there data to support the required experiences for these roles?”
There’s a notable need for stronger connections between talent management and talent acquisition, especially in younger organizations that are also more interested in linking pay and performance to effective incentive structures. Younger companies are still refining their promotion processes, moving beyond the informal “boss says he’s ready” approach and improving calibration.
In contrast, slower-growing but mature firms are focusing on identifying vulnerable and fragile talent to understand who’s at risk and plan for knowledge departure. Some firms are also examining span-of-control issues, recognizing them as potential bottlenecks for process efficiency.
Key questions for CHROs include: Are our designated successors truly the best candidates? What is their success rate? When hiring externally, which sources provide the highest-quality candidates? There’s also a push to develop a best-practice toolkit for executive assessment and development planning for successors.
4. Listening to employees and building an employee value proposition
Even the CHROs of the largest and most sophisticated companies are striving to enhance their capability to gather insights from both customers and employees and link these insights effectively. Moving beyond traditional annual surveys, they aim to gather continual insights into employee sentiment and needs.
Several CHROs cited Amazon’s daily Connections program as an aspirational model, emphasizing the need for real-time data and analytics. This shift is driving significant investments in data science capabilities, with one CHRO noting the need for “more data-mining ninjas.”
Employee value propositions are evolving from a one-size-fits-all approach to more tailored, multifaceted propositions that align with a unified company vision. EVPs are crucial for high-growth businesses as they communicate the organization’s story to current employees and potential candidates. For example, frontline roles and key knowledge worker job families might require distinct EVPs, as seen in companies like Amazon and PepsiCo.
By identifying the drivers of high turnover in areas with low labor availability, organizations can develop targeted talent solutions. Effective EVP strategies flow from listening to internal customers and transforming engagement survey data into actionable insights that can shape business trajectories.
Forward-thinking CHROs are also exploring social network analysis to gain deeper insights, leveraging data from tools like Slack and Outlook. This approach aligns with GM Chief Talent Officer Michael Arena’s work on using social capital to drive organizational performance. The goal is to equip business leaders with meaningful stories derived from data and design organizations with connection elements in mind.
Embracing the future of HR leadership
The insights from our research highlight the diverse challenges and priorities that CHROs face across different organizational maturities. To maximize their impact, CHROs must leverage advanced HR technology, foster a data-driven approach and cultivate a culture of innovation and adaptability.
By focusing on effective change management, robust succession planning and alignment with business objectives, CHROs can transform HR into a powerful driver of organizational success. Embracing these strategies will ensure their organizations are well-equipped to navigate the complexities of the modern business landscape.
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