2024 Voice of the CHRO: Maximizing HR effectiveness  

Chief Human Resource Officers (CHROs) and Chief People Officers (CPOs) face significant challenges and opportunities as they navigate the uncharted territory of AI and an uneven talent market while striving to unlock HR’s full potential to drive organizational success.

Over the past year, new challenges have arisen for CHROs — most notably, understanding the implications of AI and exploring its potential to unlock productivity, streamline HR and other resource-intensive processes, and drive organizational performance. While AI has significant people implications and some CHROs are already responsible for AI initiatives in their function or across the enterprise, HR leaders are also tasked with advancing other crucial and longstanding priorities, such as addressing talent shortages, cultivating the skills needed for their organization’s future success and building leadership capability, as well as improving the employee experience and anticipating workforce needs. To support these varied goals, CHROs recognize the need to build strong alignment between HR and top-level executives, supported by the right HR talent.

Our 2024 Voice of the CHRO Survey captured responses from 183 global companies across 14 industries.  

The data collected provides valuable insights into the HR function’s current state and future direction. It reveals the top concerns of Chief Human Resource Officers and explores how HR leaders are tackling key challenges, such as leveraging AI and technology, aligning HR strategies with business objectives, and addressing critical people risks — all while continuing to build the capabilities of their own teams to drive positive change.

The HR landscape has undergone notable shifts since our inaugural 2023 Voice of the CHRO Survey.

Last year, CHROs foresaw disruptive changes driven by the rapid proliferation of new technologies, reshaping the nature of work and the HR function itself. It’s important to note that when we fielded our 2023 survey, Gen AI was not yet in the spotlight. Perhaps for that reason, only 17% of respondents at that time said they wished they’d known more about technology before taking on the top HR role. Even so, 60% of CHROs surveyed in 2023 expected that technology would assume greater significance for HR in the future. Fast forward to 2024, and that number surged to 84%. This increase reflects respondents’ anticipation of an increasingly automated and technology-enabled HR function in the next three to five years — and the understanding that technology expertise will need to be in the HR wheelhouse going forward. 

The rise of Gen AI also represents significant opportunities for CHROs. AI can serve as a force multiplier, particularly for HR leaders facing limited budgets and resource-constrained environments. According to our survey findings, most respondents (66%), particularly those in companies with 500 employees or more, stated their HR team’s headcount would not grow in 2024. CHROs can free up their team’s time and effort by harnessing AI technologies to automate tasks or make them quicker and easier to complete, enabling team members to concentrate on more strategic initiatives and activities requiring human effort. AI can also help HR make up for lost or non-existent resources (7% anticipate HR staff reductions in the next 12 months), allowing them to achieve more with less. In fact, 84% of CHROs believe that advancements in AI technology over the next two years will reduce HR’s administrative burden.

Looking ahead, most respondents foresee AI making a positive impact over the next two years. Survey participants expect AI to:

Alongside its potential to provide relief and increase productivity, AI represents a significant strategic opportunity for HR leaders. By actively engaging in the planning and implementation of AI company-wide, CHROs can position themselves as strategic partners to their executive-level peers. As AI adoption continues to grow, HR leaders’ ability to remain relevant and influential within their organizations may depend on their involvement in AI integration. CHROs not actively participating in their organization’s AI initiatives are missing a significant opportunity to add unique value to their organizations by cultivating AI-based skill-building, examining ethical and workforce implications of AI adoption, considering how to augment or replace human effort with AI, and setting enterprise goals for adoption — to name just a few. By embracing AI and actively contributing to the organization’s AI strategy, CHROs can position themselves as crucial catalysts for innovation and change.

The rise of AI has also spurred a renewed focus on the skills needed for success now and in the future. Although the talent market has stabilized in 2024, skills shortages remain a significant concern. While the immediate pressure of talent availability may have eased broadly — with the Great Resignation subsiding and many organizations implementing hiring freezes, reductions or workforce cuts — it has not done so uniformly, and CHROs continue to grapple with skills shortages in certain parts of their business. And because of the current low unemployment rate of 4.2% (at the time of writing), CHROs should not underestimate the importance of the employee experience if they want to retain valuable talent.

CHROs recognize that not all skills are created equal. Leadership and highly specialized technical skills are in high demand, and boards are also strongly emphasizing executive succession and shortages of key talent. Over half (52%) of our 2024 survey respondents identified building leadership capabilities as their top priority, reinforcing the continuing need for cultivating leadership acumen, one of the biggest challenges identified by 60% of surveyed CHROs in 2023. This focus on developing leadership capabilities —  highlighted in 2023 and now again in 2024 — remains critical for CHROs in ensuring their organizations remain competitive in an increasingly digital and dynamic business environment.