HR Transformation: Elevate Your Organization’s Performance and Growth

Ongoing volatility and a changing workforce have reshaped workplaces, the talent landscape — and the CHRO role. 

Today’s CHROs do far more than just lead the HR function –– they guide HR transformation strategy, shape business direction and unlock growth through human resource transformation efforts that align talent, technology and organizational goals. 

Master the evolving CHRO role 

A world-class CHRO fulfills five roles in one:

• Serving as the board and CEO’s leader of human capital and culture

• Being able to win in a dynamic talent landscape

• Leading enterprise strategic change

• Leading through evolving stakeholder scenarios

• Acting as a trusted advisor and coach

Establishing a strategic effectiveness roadmap can provide a solid foundation for leading an HR transformation process that aligns fully with your organization’s needs. Discuss with your CEO which roles to prioritize based on senior leadership imperatives and the strategic position and direction of the business. 

Understand board dynamics

Managing board relationships is also critical to leading HR transformation. Drive greater success by ensuring the board composition and culture encourage openness, trust, inclusivity and respect, and that executives and nonexecutive directors understand each member’s role and commit to continuous improvement. Positioning the board to have discussions and make decisions that help the CEO, C-suite and organization achieve their goals is a hallmark of world-class CHROs.

Map people strategy to business needs

Lastly, as global disruption and evolving work trends reshape workplaces and the talent landscape, the CHRO’s role as creator of talent strategy and strategic workforce planning has grown increasingly critical. Devising a people strategy that maps to business needs in an uncertain world requires you to identify strategic priorities, analyze emerging trends, translate trends into workforce capability needs and prioritize those capabilities — all based on solid labor market intelligence and workforce analytics.

To succeed in this environment, CHROs must support a broader human resources transformation that aligns evolving talent needs with long-term business objectives. Recognize HR’s role as a convener and catalyzer in the organization by bringing stakeholders together, orchestrating frameworks for them to make decisions and inspiring a flow of new ideas for the workforce.

The HR operating model is a foundational piece of any HR transformation strategy. It organizes the structures, capabilities and processes through which HR delivers value to stakeholders.

In evaluating the performance of the existing operating model, CHROs must consider how it supports broader HR digital transformation goals — from the responsibilities of HR business partners (HRBPs) and the structure of shared services, to the ways in which HR professionals interact with leadership and how technology is used.

Progressive CHROs operationalize HR transformation in the following ways:

• Reinvent the HRBP role as a strategic talent leader. Redesign the senior or VP-level HRBP role toward a more analytically oriented strategic talent leader, and reallocate transactional tasks. Strategic talent leaders align with specific business units to serve as their de facto CHRO, and partner with business leaders to address the unit’s most pressing business opportunities and challenges.. Effective strategic talent leaders must think holistically about business strategy and the talent processes that support it –– a key element of any successful HR transformation process.

• Create a dynamic pool of HR problem solvers. Having a dynamic pool of problem solvers in place for strategic projects is critical to operationalizing HR transformation. Problem solvers’ primary job is to hypothesize, test and build solutions to strategic problems. This team creates and upgrades resources, practices and policies used by HR and the workforce. It effectively serves as the “flex muscle” of the HR function, agilely moving from project to project.

HR transformation will require HR teams to build new capabilities to tackle a range of business priorities, including:

• Organizationwide transformation goals. The number of CEOs citing growth in their top three strategic business priorities for 2024/2025 is up 25% since last year and is at its highest level since 2014.To prepare for this growth, 79% of CEOs will have new strategies ready to launch as they enter 2025. CEO-driven strategy resets will put HR teams under pressure to align workforce strategies with the CEO’s transformation goals. For HR professionals, this means building the capability to assess the impact of shifting business priorities on talent needs and identify where talent gaps might undermine business unit (BU) goals.

• AI adoption. A majority of CEOs expect to leverage advanced technologies such as GenAI to drive growth. GenAI’s implementation is constrained by skill gaps and uncertainty about its integration into employees’ workflows — two critical new responsibilities for HR teams. HR professionals will need the capability to grasp the strategic potential of GenAI and recognize its practical implications for their BUs.  A strong HR digital transformation strategy must include plans for integrating new technologies into daily workflows.
  

• Managing a challenging labor market. In a tightening labor market characterized by aging populations, shrinking talent pools and evolving employee expectations for flexibility, HR faces significant challenges in securing the talent necessary to drive critical business priorities. For HR professionals, this context demands the development of strategic acumen, enabling them to not just fill talent gaps reactively, but also to plan for future workforce needs proactively.

Shifting HRBP roles

As part of the broader human resources digital transformation effort,the HRBP role is likely to be split between more specialized roles. Be sure that staff are equipped with the competencies needed to provide value to the business in these new roles:

• HRBPs as strategic talent leaders. Strategic talent leaders are a VP-level evolution of the HRBP, focusing on strategic priorities aligned with a specific BU or function. This role requires strong business acumen and talent management skills as well as strong strategic consulting and relationship management skills. Data judgment is critical to helping these leaders use and interpret labor market intelligence and other talent data.

HRBPs as problem solvers. Problem-solving HRBPs define talent problems and hypothesize, test and build solutions. Core competencies for this role are similar to those of a consultant: project management, consultative problem solving, relationship management, creativity and innovation.

• HRBPs as people relations managers. This central pool of HR staff takes on much of the work traditionally owned by the HRBP role, including compliance, employee relations issues and people manager support responsibilities that are not self-serve or automated.

HR continues to face new workforce and technology issues. In addition to building HR’s internal capabilities, promote permeable movement of skills and ideas into the function from other areas to develop solutions. Be ready to both encourage and collect those innovations that originate outside of HR and remove barriers to people and ideas.

True digital HR transformation creates value beyond traditional HR processes and expectations to maximize employee experience, productivity and well-being. A digitally savvy CHRO leads, pursues and supports technology within HR and across the organization to better support enterprise goals.

HR technology plays a critical role in HR digital transformation by enhancing the day-to-day work of each employee and improving work outcomes. While HR journeys may be similar for most employees, their individual work experiences include unique processes and technologies. To strengthen HR digital transformation strategy, CHROs should:

• Define employee work journeys. Ask employees — through focus groups, individual interviews, workshops, and HR data and work systems — to get a better understanding of the day-to-day, where challenges exist, and how technology might help.

• Collaborate across functions. Work with organizational partners to mitigate employee challenges. For example, your organization might struggle with employee experience — a crucial business priority  — which would require close collaboration and alignment with other parts of the business to identify a viable solution.

• Choose digital technologies that enable these solutions. Most technologies aren’t focused on HR processes but on day-to-day work. Once you identify challenges within the business, collaborate with other teams to find opportunities to address them and create new business value.

Build your roadmap for HR transformation roadmap

Once you’ve taken these steps, map out a path for HR transformation using the following framework –– from Gartner HR transformation research:

• Visualize your destination before you look at technology options. Engage stakeholders and prioritize business, HR and technology outcomes for a strategic HR technology implementation.  These guiding choices form the foundation of a successful HR digital transformation roadmap.