Future-Ready HR
How CHROs Are Reinventing Their HR Functions to Balance Tech, Talent, and Transformation
When Chris Courneen peered into the future of his HR department, he knew something — and some people — needed to change. As vice president and global head of HR for MS International Inc. (MSI), an Orange, Calif.-based counter and flooring provider, Courneen realized the type of HR function that capably served his company for years would not survive the radical changes expected in the next decade. He needed a new kind of HR professional, a transformed HR operating model, and a major tech upgrade to meet the challenges ahead.
Courneen is among a growing wave of CHROs who are modernizing their HR operations in response to a series of workforce disruptions. Today’s HR leaders face a mountain of new challenges, including deciding which HR roles AI will enhance or replace, how to harness an explosion of data to drive talent decisions, and how to adapt to a volatile political and economic environment. All of this will require new skills and adaptability for HR staff, alongside renewed pressure to control costs.
HR leaders are getting the message about the need for change. A 2024 Gartner study found that 87% of HR leaders believe that shifting business needs require continuous transformation of the HR function. And SHRM’s new CHRO Priorities and Perspectives report found that CHROs ranked “Preparing HR staff for future challenges” as the second-biggest challenge facing the HR function this year, right behind “HR budget constraints or limited resources.”
Jill Goldstein, global managing partner for HR and talent transformation at IBM Consulting, said a growing part of the CHRO role is to plan for the next market disruptions that will inevitably arrive.
“I hesitate to use the term ‘future-proof’ because it implies an ending,” Goldstein said. “Instead, HR has to be ‘future- ready’ and make sure its model is designed in a way so it can easily pivot to support whatever direction the business, the industry, or the market takes in the future, because change is sure to come.”
Wanted: A New Breed of HR Professional
In making their functions future-ready, CHROs often start by assessing the skill sets on their HR teams and considering the skills needed for the future. As a result, HR leaders increasingly find themselves searching for certain core traits when hiring HR staff rather than established expertise in functional HR areas. For example, Courneen said he now looks for adaptability, business acumen, and curiosity when hiring for roles in his HR department.
“Those three traits are more important than ever because every role in the HR organization is changing to some degree,” Courneen said. He recently hired a new employee for his HR team who had very little experience in the task that she would be asked to perform.
“But that didn’t matter because she has the proven smarts, business acumen, and adaptability. We feel like we can teach her everything else she needs to know about the work,” Courneen said. “It’s not essential that someone understands every aspect of FMLA or how to do a EEOC credibility analysis. We can teach them those things if they have the core traits.”
Courneen believes the trait of adaptability is especially crucial because HR professionals increasingly have to develop greater literacy in AI and people analytics.
In a Mercer survey last year, nearly two-thirds of HR executives (65%) said that in the future, they will be focusing more on nontraditional areas in their HR positions, such as scenario planning, business operations, analytics, and technology. This underscores the need for HR leaders to develop a broader set of skills in themselves and their teams.
The study also found that 42% of HR leaders said accelerating the development of their HR team’s skills was one of their most prevalent challenges. A main catalyst: the rising importance of data and technology in the HR function.
As AI usage accelerates in the coming years, CHROs will be faced with difficult new staffing decisions, including choosing the optimal mix of humans and AI within the HR function. Kyle Forrest, dean of Deloitte’s Next Generation CHRO Academy, advises CHROs to use an AI-focused decision framework when planning for the future division of labor in HR.
“CHROs need to think about what work in HR can be AI-assisted, meaning it’s primarily still a human-to-human interaction; what work can be AI-augmented, where it takes an equivalent amount of time and effort for humans and AI together to do the work; and what work can be AI-powered, where AI does the majority of the job and the human role shifts more to oversight to ensure quality AI outcomes,” Forrest said.
A true business partner? The HR business partner (HRBP) is a role where such decisions already are coming into play. Some experts believe that if that job doesn’t evolve from being focused on compliance and process to a more strategic role, it may be ripe for replacement by new tools such as agentic AI. This technology features autonomous agents that can execute multi-step HR processes on their own.
“The HR business partner role is becoming a bigger conversation for many organizations,” said Stacey Harris, chief research officer and managing partner at Sapient Insights Group in Atlanta. “If those partners aren’t empowered to act as true, valued strategic consultants to the business and are still mostly doing transactional HR work, like filling out forms and moving reports from one system to another, their jobs aren’t necessarily safe. They can be replaced by AI agents.”
Cultivate data literacy. As AI acumen and data literacy have grown more essential to Courneen’s HR strategy, he’s worked to develop those skills in existing staff or hired people externally for that expertise. Last year, for example, he created a new role of data analytics manager.
“That manager’s job is to improve how we leverage all the people data we have,” Courneen said. “It started with our talent acquisition process to identify where we’re having success and where we’re falling short in terms of identifying good candidates, improving time-to-hire, quality of hire, and where we may be spending unnecessary money.”
But Courneen doesn’t just want data skills in his people analytics group. “We spend more time now, particularly with those interviewing for HR business partner jobs, digging into things like how well they understand and can use people analytics,” he said. “We want to know, for example, how they calculate employee attrition and can use that metric to drive decision-making. We ask similar questions of people applying for TA and learning and development jobs.”
Betsy Summers, principal analyst on the Future of Work team at Forrester, said enhancing data literacy throughout the HR department is key to making HR more future-ready. “CHROs need to pivot towards the embrace of data and technology to bring all of their HR programs to life, rather than just thinking of analytics and AI as consigned to dedicated teams off to the side,” she said.
As part of becoming future-ready, Courneen also created what he calls “curiosity jobs” on his HR team. One of those jobs is filled by an AI intern.
“All that intern does is go out and research the latest AI tools we could potentially use here, to help us understand what’s still in development and what is maturing,” Courneen said. “Someone serving in that intern role initially identified the talent acquisition technology partner we ended up using. You won’t keep up with the rate of change in business and in HR if you’re not innately curious. Things are changing so fast, especially in technology, that we can teach something today and it’s outdated in three months.”
The HR business partner role is becoming a bigger conversation for many organizations. If those partners aren’t empowered to act as true, valued strategic consultants to the business and are still mostly doing transactional HR work, like filling out forms and moving reports from one system to another, their jobs aren’t necessarily safe. They can be replaced by AI agents.”
Modernizing HR Operating Models
CHROs also are rethinking HR operating models and organizational structures to become future-ready, be more agile in meeting business needs, and accommodate the growing use of HR technology. Research from the Institute for Corporate Productivity (i4CP) found that 75% of HR leaders said they’ve revamped their HR organization structures post-pandemic, a trend that continued deep into 2024.
Mercer’s 2024 Voice of the CHRO study found a strong link between changes in HR operating models and the accelerating adoption of AI. Almost half of study respondents made significant changes to their HR operating model, and companies making those changes were twice as likely to be in the AI planning or piloting stage.
Some CHROs are redesigning operating models to bring unity and new efficiencies to historically disconnected parts of HR. Global HR analyst Josh Bersin, founder of The Josh Bersin Company, calls this approach “systemic HR,” in which traditional HR siloes are dismantled to allow functional groups to work together more seamlessly and solve core business problems. Those core problems include transforming staff roles around AI and addressing chronic talent shortages in some areas of the business.
A recruiting group directly linked to learning and development (L&D) in a systemic model, for example, has advantages that functions operating in silos can’t capitalize on.
“Recruiting might go to L&D and ask, ‘Our data shows we have a growing number of business units hiring people with these specific skills. Are you developing programs to build those skills?’ ” Bersin said. “Because if L&D is building those programs, maybe recruiting doesn’t have to hire so many external people. Developing those skills in the existing workforce means some of those people could move to open jobs.”
The systemic HR approach also includes creating solution teams aligned around specific business issues — teams that often become cross-disciplinary over time. “There might be a solution team with various HR and line experts that’s built around leadership development, sales performance, underperforming employees, or other specific areas,” Bersin said.
AI in Action: How One HR Executive Freed Up 20% of Recruiters’ Time
One path CHROs are taking to drive AI efficiencies is implementing AI-powered technology to streamline recruiting. That’s what Chris Courneen (pictured above), HR leader at MSI International, decided to do when he found that 20% of his recruiting team’s time was being spent scheduling interviews with job candidates and hiring managers.
“We were able to eliminate 100% of that problem with a new AI-driven platform that automatically schedules those job interviews for us,” he said. In addition, MSI eliminated about 30% of HR’s manual work related to onboarding because the new platform also automatically walks new hires through filling out needed onboarding forms, reading policies, and completing other core orientation tasks.
Introducing that automation also meant some HR staff were displaced. Notably, the recruiting
coordinator roles were phased out.
“We decided to eliminate that entire job level and reskill everyone who had been doing that job, teaching them how to start reviewing resumes and conduct phone screens with job candidates,” Courneen said. “The upside is that the recruiting coordinator job tends to be a high-burnout, high- turnover role. So people were excited about an opportunity to take on higher-value work.”
Hiring demand was strong enough to retain those people in new recruiting roles. MSI spent six months reskilling the former recruiting coordinators to prepare them for their new positions.
Redesigning HR for Accountability
Some CHROs have transformed their HR operating models with other objectives in mind. Ekta Vyas, CHRO of Keck Medicine at the University of Southern California, led a transformation of her HR function designed to bring new accountability and transparency to HR’s work.
“It’s been a complete overhaul at the system level, with a transformation across processes, people, and technology,” said Vyas, who oversees four hospitals and several ambulatory locations.
Vyas created a center of excellence (COE) model with supporting HRBPs, a shift that moved service and transactional work once handled in functional areas to a centralized HR business center. The business center now employs AI-powered technology from provider ServiceNow to handle a wide range of employees’ HR-related issues and questions through a case ticketing system. Vyas felt the change was necessary in part to make HR more accountable and responsive to the business.
“One of the biggest challenges in a HR system model, where functions are distributed across many different areas, is confusion among employees about where to go within HR to answer their questions,” she said. “People often find themselves bouncing from one place to another and becoming frustrated.”
Under the old organizational structure, Vyas found it difficult to identify who in HR was working on what issues and had ultimate accountability for results. The new operating model resolved that problem. However, the transformation did require considerable changes for Vyas’ HR staff.
“From an upskilling perspective, it was a completely new world for my HR team,” she said. “People who were positioned in talent acquisition, HR operations, HR technology, and other areas at different local hospital entities are now part of a new org design under HR business center leadership. They’re operating like a call center, which required learning things like the ServiceNow technology, among other new skills.”
Vyas also changed the role of HRBPs so they’d have more time to conduct strategic consulting with business leaders. “Many were getting bogged down in transactional work. But we streamlined and standardized that work and moved it to our new HR business center,” she said. “Our three COEs are now drafting and designing their own programs, so that’s also freed HRBPs to do more strategic consulting with the executive teams of our hospitals.”
Build, buy, borrow, or bot? Forrest of Deloitte said a challenge many CHROs grapple with today is how to staff their HR functions with the proper “flex capacity” to meet shifting business needs. That requires making the right “build, buy, borrow, or bot?” decision when it comes to matching what often can be limited HR resources to capacity needs.
“CHROs need a better understanding than ever of the HR skills needed to do the work, as well as of the strategic nature and time duration of projects or initiatives,” Forrest said. “They then can scale up or down, using not just full-time HR employees but third-party vendors and contingent workers to flex as things come up throughout the year, whether it be a change in business strategy, a macroeconomic event, or other factors.”
Forrest also said he is seeing more CHROs modify their organizational structures to reflect the growing use of AI and analytics within HR. “In some cases, for example, CHROs have made a change so the people analytics team now owns the AI strategy for the HR function,” he said. “That’s because they feel the analytics team best understands how to use people data to train AI models to deliver good outcomes.”
Change Without Chaos: Manage HR Stress During Transformation
The typical HR professional role is stressful enough. Layer on a major HR transformation initiative and you have a recipe for burnout and disengagement within the HR team.
“It’s easy to forget about the needs of your own HR team when you’re so focused on serving the needs of the business,” said Ekta Vyas, CHRO of Keck Medicine at the University of Southern California. “Building a plane while you’re flying it, which is what many HR transformations feel like, can create burnout and other issues in your HR group. Many already are managing big workloads, and now you’re also throwing a transformation at them. It can create change anxiety.”
Don’t assume your team will just be able to adapt. Supporting your HR professionals will make them better equipped and more willing to take care of the organization on the other end.
To head off that problem, Vyas hired change management experts on her team to help manage the stress and uncertainty from the transformation. Such experts can communicate to employees why change is necessary, explain what’s in it for them, and help get buy-in to new strategies and processes.
Digital-First HR: A Key to Future Readiness
HR industry analysts agree CHROs likely have seen only the tip of iceberg when it comes to AI integration in the HR function. As the technology matures, it will increasingly augment — and in some cases fully replace — the work of HR professionals, especially in areas such as service call centers. These are inevitable changes HR executives should be planning for today.
“In the past, we would say that HR is ‘people-led, technology- enabled,’ ” said Goldstein of IBM Consulting. “But today, it’s become ‘digital first, people-enabled.’ That requires a whole different set of competencies in the HR function. CHROs today have to be invested in teaching their HR teams technology acumen, which is easier than teaching technology experts HR skills.”
Research from Sapient Insights’ new HR Systems Survey illustrates how HR leaders have begun prioritizing AI and people analytics skills. In the past year, the two HR roles that saw the highest growth in hiring were HR technology and HR operations. Those topped the perennial high-growth areas of recruiting and L&D.
“CHROs are looking not just for HR technology expertise but operational expertise as well that can help them remake HR,” said Harris of Sapient Insights Group. “It also reflects a growing desire for staff with operational knowledge who understand data, because investing in analytics and AI doesn’t do you much good if your people data isn’t clean and accurate.”
Courneen is among CHROs looking to develop more technology acumen on their HR teams, such generative AI skills. And he walks the talk in doing so. He recently created his own custom GPT application to help solve a vexing HR problem. Analytics at his company showed hiring managers were struggling to ask good, behavioral-based questions when interviewing job candidates. Putting those managers through a full day of interview training had little lasting impact.
To address the problem, Courneen built a custom GPT that hiring managers can now use to generate interview questions for various job roles. Managers simply upload into the tool a job description, the candidate’s resume, and a list of key traits and skills needed for the job. Based on those inputs, the GPT generates behavioral-based questions and an interview guide that can be easily shared. Hiring managers also can use the tool to role play interviews, with the GPT assuming the role of the candidate.
Courneen now encourages his HR team to look for opportunities to create similar performance-support tools using ChatGPT. In preparation, he put his whole staff through classes on prompt engineering and how to create custom GPTs on the LinkedIn Learning platform.
“Be it [an] HR business partner, a recruiting specialist, or an L&D expert, I ask that when they see something that isn’t working to try to figure out a better way to support the business,” Courneen said.
Dave Zielinski is a Minneapolis-based business journalist who covers the impact of emerging technologies on the workforce. He is a frequent contributor to SHRM publications.
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