Road map to HR Transformation | Gartner (2024)

Where effective CHROs focus

Highly effective CHROs drive impact and business results by:

• Building a strategy for the HR function and adapting it as the business changes
• Spearheading business strategy development
• Positioning the HR function (operating model, structure and staffing) to meet business needs
• Optimising the HR function’s budget

The best CHROs also know how to distribute HR leadership among their direct reports to balance efficiency and control of key projects and create a future-focussed, financially disciplined function.

Model of a World-Class CHRO

The Gartner Model of the World-Class CHRO provides a road map for greater personal effectiveness and leadership, based on the best demonstrated qualities of HR leaders in five core roles:

1. Board’s leader of human capital
2. Creator of talent strategy
3. Enterprise change leader
4. Driver of culture and purpose
5. Trusted advisor and coach

To be most effective, CHROs must discuss with their CEOs which of these roles to prioritise, 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 prioritising some over others at times.)

In their increasingly strategic position, CHROs are also having 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 organisation 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 non-executive directors understand the role of each member and commit to continuous improvement.

CHRO’s critical role as creator of talent strategy

Notably, while the pandemic and hybrid work environments have not changed the Model of a World-Class CHRO, the CHRO’s role as creator of talent strategy and associated strategic workforce planning has shot to the fore. (Also explore ‘What Is HR Strategy?’)

Devising a people strategy that maps to business needs requires CHROs to identify strategic priorities, analyse emerging trends, translate priorities and trends into workforce capability needs, and prioritise those capabilities.

Gartner research shows that headed into 2022, building critical skills and competencies was a priority for 59% of HR leaders—but the challenge is complex. Gartner TalentNeuron™ data reveals that the total number of skills required for a single job is increasing 6.3% annually. Many of today’s new and emerging skills are also difficult to obtain.

World-class CHROs will leverage labour market intelligence (see Gartner TalentNeuron™) and talent analytics (also known as HR analytics, workforce analytics and people analytics) to forecast the future workforce and create long- and short-term sourcing plans with deep knowledge of the competitive landscape for critical skills. This enables them to be effective human capital leaders for the board.

The HR operating model is a foundational piece of any HR transformation effort as it structures and organises the people, processes and mechanisms by which the HR function delivers value to stakeholders, both internal and external.

In evaluating the performance of the existing operating model, HR leaders must consider all its moving parts—from the use of HRBPs and SSCs to the opportunities for leveraging technology. But first, HR leaders must know the strategic objectives for the HR function and their enterprise—and be ready to adapt as needed.

4ways HR operating models are evolving

Gartner expects progressive CHROs to transform the HR operating model in the following key ways:

• Reinvent the HRBP role as one of strategic talent leadership
• Create a dynamic pool of HR problem solvers
• Provide agile support with next-generation centres of excellence (COEs)
• Build a robust HR operations and service delivery team
  

For more detail, see‘What Is an HR Operating Model—and How Can You Evolve Yours?’

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

• New ways of working. In today’s hybrid and other new working environments, HR leaders and teams need new skills and competencies—and must develop them in the organisation’s managers and leaders—to ensure a happy, healthy workforce that can generate sustained performance.

• Increasing competition for talent. Tight labour-market conditions and new ways of working make it more difficult to find critical talent. HR increasingly needs data-driven workforce insights—and the skills needed to turn talent analytics into workforce plans and decisions.

• Evolving HRBP roles. As the HR operating model changes, optimising the use of centres of excellence (COEs) and shared services centres (SSCs), the HRBP role is likely to be split among three new and more specialised roles, each requiring unique skills and capabilities.

HR competencies to tackle new workforce needs

Pandemic-era workplace trends include employees being more vocal about their need for flexibility, influence and self-determination in the workplace, and an all-time low tolerance of subpar conditions. HR teams must have the skills and competencies to create and deliver a human-centric work proposition—and develop managers and leaders who can be empathetic to the increasingly divergent needs and preferences of employees dispersed in remote and hybrid working environments.

HR must also be able to collaborate effectively with business leaders to ensure they can effectively manage their hybrid workforce and maintain a healthy culture, while aligning goal-setting and performance management to drive enterprise goals.

HR analytics to compete for talent

Talent analytics is one of the fastest growing areas in HR, with new ways of working and a competitive labour market driving increased demand for data-driven workforce insights.

Gartner research finds that the most common talent analytics roles are:

• Analyst/consultant (found on 90% of teams)
• Data and analytics manager (found on 60% of teams)
• Data scientist (found on 57% of teams)

As talent analytics leaders scale their teams, they expect to focus on hiring:

• Data scientists (63% of leaders anticipate hiring in 2022)
• Analytics and talent intelligence developers (56% of leaders anticipate hiring in 2022)

• Analysts/consultants (50% of leaders anticipate hiring in 2022)

Many talent analytics leaders are prioritising training, technology and vendors as they look to upskill their workforce and maximise HR’s effective use of analytics. In addition to technical skills, talent analytics leaders must ensure their teams have the collaboration and storytelling skills needed to share insights effectively. This empowers end users to use data and analytics to inform decision making and buy into the adoption of tools.(Also see the ‘HR Technology and Analytics’ tab.)

Labour market intelligence tools and platforms like Gartner TalentNeuron™ can help HR departments analyse competitor hiring trends, discover new demand for key talent and understand market disruptors, but HR leaders and their teams must be able to turn such insights into decisions by:

• Incorporating competitive intelligence into talent and business strategic planning

• Acquiring talent based on what the competition is doing

• Using data on emerging trends and risks and external labour market data to forecast talent demand

More specialised roles for HRBPs

As the HR operating model evolves, the HRBP role is likely to be split into three more specialised roles, each requiring certain skills and capabilities.

HRBP as strategic talent leaders

Strategic talent leaders are a new, VP-level evolution of the HRBP, focussing solely on HR’s strategic priorities. They tackle the most pressing talent opportunities and challenges throughout the organisation and are aligned with a specific business unit or function for which they own talent management strategies.

Success requires strong partnership skills and the ability to influence the aligned business unit or functional leader. Using and interpreting labour market intelligence and other talent analytics is critical to inform decision making and guide the business effectively.

For example, labour market intelligence (see Gartner TalentNeuron™) integrated into strategy from the outset can help drive decisions about:

• Optimal locations for future investment based on the availability of talent, competition, cost and macroeconomic factors

• The best locations to consolidate your footprint based on talent availability

• The positive or negative impact your location decision will have on diversity, equity and inclusion (DEI) objectives

HRBPs as problem solvers

A dynamic pool of problem solvers is critical to the success of the HR operating model of the future. HRBPs will be key members of such teams, which will work on a variety of projects and include a range of experts, such as consultants and COE partners. HRBP contributors to these teams will lie at the heart of the HR function, driving resource creation and upgrades, practices and policies used by HR and the entire workforce.

The primary responsibility of problem-solving HRBPs is to define talent problems and hypothesise, test and build solutions. Core competencies for this role are similar to those of a consultant competency model: project management, stakeholder management, strong inductive and deductive reasoning skills, as well as creativity and innovation.

HRBPs as people relations managers

These are a central pool of HR staff who help address employees’ and managers’ most urgent needs. This role takes on much of the work that is traditionally owned by the HRBP role, including compliance, employee relations issues and manager support.

The role is similar to a traditional junior-level HRBP, making those with a strong understanding of the processes, policies and systems within HR well-suited for it.