Strategic Priorities for CHROs

In the rapidly evolving business landscape, the chief human resources officer (CHRO) role continues to be indispensable for organizational success. According to a recent Accenture survey (Brower, 2023), 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. The survey focused on the CHROs who had achieved their “seat at the table” with senior operating executives by building their credibility as a strategic advisor. This credibility has been driven by intentional executive development of CHRO’s business acumen as well as data and tech fluency. The authors’ recent conversations with a dozen CHRO/CPOs, summarized below, highlight the need for these skills as seen through the lens of their current strategic allocation of valuable time and resources.

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 2 years, we’ve collected data from 11 heads of the HR or people function and dozens of their direct reports responsible for talent, learning, and organizational development to identify those priorities. Despite differences in industry, several common themes emerged as strategic priorities. 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.

In the table below, the median number of priorities for a CHRO was four. Priorities mentioned by fewer than 40% of CHROs are not listed. These priorities were collected during one-on-one conversations about key focus areas for additional resource allocation, headcount, and executive attention in the next 1 to 2 years.

Commonly Endorsed Priorities for HR Executives by Level of Leader

Strategic priority	Percent of CHROs/CPOs	Percent of functional leaders (VPs/SVPs)
Upgrading HR tech/automation	100%	73%
Change and re-orgs	88%	85%
Succession planning/perf mgt/mobility	88%	91%
Analytics/ROI/AI	66%	88%
Listening to employees/culture/EVP	66%	61%
Improving process execution/WFP	55%	52%
Leadership development	44%	67%

Sample size: n=11 CHROs/CPOs, n=36 VPs/Functional leaders of talent/OD/learning

These HR leaders support a range of industries from consumer-packaged goods, media/entertainment, retail, telecom, healthcare, and manufacturing to tech, defense, and logistics. The executives come from organizations ranging from $100 billion private sector multinational companies to $2 billion nonprofits with only a few thousand employees. Some organizations are growing top line revenue at 25% annually and some are fighting hard to maintain the status quo. Several common themes emerged as strategic priorities based on their experiences. To maintain confidentiality, common themes have been summarized below.

Transforming HR Through Technology and Strategic Integration

Upgrading HR tech 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 tech to automate processes, clean up and collect data, and generate reports from HRIS tools like Workday. Although 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), whereas 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 (e.g., Cantrell et al., 2022), 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 the organization 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 (EVP) 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 preboarding processes are efficient, but welcoming new hires should be a personalized, warmer experience.

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 long-term success and resilience of the company.

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 during change emerged as a recurrent theme. Approaches include the introduction of new EVPs, 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, poor coordination between silos, inadequate successor preparation, and misaligned job leveling and spans of control. These issues highlight the significant need to build stronger organizational design capabilities.

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 analysis, and recommending essential readings for leaders, such as “The Founder’s Mentality,” “The Innovator’s Dilemma,” and “The Geek Way.”

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 frequently 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 3 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. Although 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 critical questions such as, “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.

Listening to Employees and Building an EVP

Even the CHROs of the largest and most sophisticated companies are striving to enhance their capability for gathering insights from both customers and employees and linking 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 listening program known as Connections as an aspirational model, emphasizing the need for real-time data and analytics. This shift is driving a significant investment in data science capabilities, with one CHRO noting the need for “more data-mining ninjas.” A recent article by Napper et al. (2024) shares data from Revelio showing that the total number of people analytics jobs in 2024 is up 500% since 2000, but the trend plateaued in 2022, based on job titles. The future may involve integrating people analytics capability into existing HR roles and structures, such as asking the HR business partners to provide more data reports and analysis or automating data queries and tools for leaders to do their own report generation.

EVPs 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 both 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 Arena’s (2024) ongoing 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.

What Was #1?

The #1 priority varied widely. One CHRO cited workforce planning as their top priority, another cited the VP promotion process, whereas others rated mergers, culture change, building analytics capability, or tech innovation (e.g., HR product development) at the top of their list. Career development and lateral rotations were a common need, but no leader ranked it at the top. All but one CHRO thought their successor development and performance management processes were poorly executed, and this has long represented a clear opportunity for the next paradigm to emerge from the I-O field, especially if we can leverage the vast amounts of people data now available.

 

Mark Morris is an associate professor of Management, Jindal School of Business, University of Texas at Dallas. Mark has led global talent, learning, people analytics, and organizational effectiveness functions for Amazon, Sodexo, Lockheed Martin, JCPenney, and others. He has taught vision and leadership to CEOs and consulted on multibillion-dollar acquisitions and divestitures. Mark earned his BA in Psychology from the University of Texas at Austin and his PhD in Industrial Organizational Psychology from the University of Houston.

Lynn Collins is head of Development Assessment Solutions and chief scientist for BTS North America. For over 30 years, Lynn has helped companies address a variety of organizational issues in talent management, including Salesforce, Pfizer, eBay, Edward Jones, Brookhaven National Laboratory, Accenture, and Verizon, among others. Prior to joining BTS, Lynn was a partner at SH&A/Fenestra, where she spent the last 5 years of her 20-year tenure as chief scientist.

Sandra Hartog serves as partner emeritus in the Assessment Practice of BTS, focusing on thought leadership on high potential assessment and development, strategic succession planning, and development and expansion of the global assessment practice, and as innovation in technology-enhanced assessment and development centers. Sandra was the global head of the BTS Assessment Practice, helping grow the practice by over 260%. Prior to BTS, she was president and CEO of Fenestra, a leading provider of global talent management and technology solutions acquired by BTS in 2014.

References

Arena, M. (2024). Leveraging social capital with Michael Arena posts [annotated links to a series of articles]. HR Exchange Network. https://www.hrexchangenetwork.com/column/leveraging-social-capital-with-michael-arena

Brower, T. (2023, January 23). CEOs say HR is central to business success: 5 critical shifts. Forbes. https://www.forbes.com/sites/tracybrower/2023/01/22/ceos-say-hr-is-central-to-business-success-5-critical-shifts/

Cantrell, S., Griffiths, M., Jones, R., & Hilpakka, J. (2022, September 8). The skills-based organization: A new operating model for work and the workforce. Deloitte Insights. https://www2.deloitte.com/us/en/insights/topics/talent/organizational-skill-based-hiring.html

Napper, C., Yan, J., and Zweig, B. (2024, September 2). What is happening to people analytics? A 15-year trend [three-part series]. Directionally Correct News. https://directionallycorrectnews.substack.com/p/what-is-happening-to-people-analytics?r=ybtwi&utm_campaign=post&utm_medium=web