What Is HR Transformation — and What Does It Achieve?

Highly effective CHROs today do more than just lead the HR function. Rather they help enable business success across the enterprise as a strategic business leader. Specifically, top CHROs:

• Build a strategy for the HR function and adapt it as the business and operating environment change

• Provide key inputs to business strategy development

• Position the HR function (operating model, structure and staffing) to meet business needs

• Optimize the HR function’s budget

The best CHROs know how to distribute HR leadership among their direct reports to create a future-focused, financially disciplined function while also contributing to the overall vision and strategy of their organization.

Model of a world-class CHRO

The Gartner Model of the World-Class CHRO provides a roadmap for greater personal effectiveness and strategic leadership, based on these best demonstrated qualities:

• The board and CEO’s leader of human capital and culture

• Ability to win in a dynamic talent landscape

• Leader of enterprise strategic change

• Leading through evolving stakeholder scenarios

• Trusted advisor and coach

To be most effective, CHROs must discuss with their CEOs which of these roles to prioritize, based on the imperatives facing senior leadership and the strategic position and direction of the business. (CHROs should never ignore any of these roles, despite prioritizing some over others at times.)

In their increasingly strategic position, CHROs also have more interactions with the board, yet many still struggle to influence board decisions. Gartner defines success in board interactions as ensuring the board is best positioned to have discussions and make decisions that help the CEO, C-suite and organization achieve their goals.

CHROs can drive greater success by ensuring the board composition and culture are designed to encourage openness, trust, inclusivity and respect, and that executives and nonexecutive directors understand the role of each member and commit to continuous improvement.

Economic and social volatility has reshaped workplaces and the talent landscape

A series of recent shocks, such as the COVID-19 pandemic, widespread adoption of hybrid work and the Russian invasion of Ukraine, have reshaped workplaces and the talent landscape. As a result, the CHRO’s role as creator of talent strategy — and associated strategic workforce planning — have shot to the fore.

Devising a people strategy that maps to business needs in an uncertain world requires CHROs to identify strategic priorities, analyze emerging trends, translate priorities and trends into workforce capability needs, and prioritize those capabilities — all based on solid labor market intelligence and workforce analytics.

CHROs must recognize the limits of HR’s expertise and ability to react to novel talent demands as they arise. World-class CHROs recognize HR’s role as a convener and catalyzer in the organization — bringing stakeholders together, orchestrating frameworks for them to make decisions and inspiring a flow of new ideas for the workforce.