The CHRO's new seat at the table might be at risk

The Covid-19 pandemic may have been the biggest blessing for some HR leaders’ careers. It may have been the biggest curse, too.

As employers scrambled to respond to a once-in-a-lifetime pandemic, CHROs found themselves in the spotlight. They became CEOs’ on-call experts for everything from remote work to layoffs or furloughs and employees well-being.

“You just have to think about the magnitude of how work has changed since then. The CHRO was at the hub of all that,” Roger Philby, global leader of Korn Ferry’s people strategy and performance practice, told HR Brew.

Regarded for decades as corporate America’s red-headed stepchild, HR had been primarily focused on administrative tasks, like payroll or snooze-worthy trainings. The only time executives paid attention was when one of those tasks went wrong. This moment marked a significant shift.

“We’re like the ducks that are on the water. We may look good above the surface, but underwater we’re flailing viciously. That’s how I felt life was, definitely pre-pandemic, where nobody knew what we did,” Mai Ton, a fractional HR leader who previously worked in-house at growth-stage Silicon Valley tech startups, told HR Brew.

“All of those previously under the water systems became very prominent and very in front of everybody, because we were all remote and virtual. So I feel like that’s really what led to the final kind of elevation of the role,” Ton added. “It was previously HR was always begging for a seat at the exec team, and now we finally had it, because we were tasked with all of these things.”

Since then, however, something seems to have changed, leaving CHROs’ power and influence at risk of stagnating, if not declining.

The winds are shifting. There are several factors at play. A cooling labor market has shifted power back to employers, who are hiring and doling out raises less. Economic pressures, including high interest rates and tariffs, have employers returning to the age-old strategy of cutting costs by cutting workers or employee-focused programs, like learning and development.

Some employers have also started following a new playbook for addressing challenges like those that, just five years ago, they would have relied on their CHROs to navigate. For example, employers like Amazon (and the federal government) have announced full-time return-to-office mandates for their global workforces, despite HR leaders’ feelings about them: 81% of CHROs in America and some European countries surveyed by people management platform Leapsome believe strict RTO mandates are ineffective, and 63% from America said they feel pressured by their CEO to embrace them.

While HR leaders still play a critical role when it comes to addressing challenges related to diversity and immigration, these issues are not currently as top of mind for executives as they were in the early 2020s, according to Emily Rose McRae, senior director analyst at Gartner.

On top of all this, many practitioners who were CHROs during the pandemic have simply hit their limit: “HR has been running the equivalent of a 100-mile marathon now, and there’s almost no end in sight,” Dan Kaplan, managing director and co-head of the CHRO practice at ZRG Partners, told HR Brew. “And every time you feel like, okay, we could take a breath, war starts in the Middle East, tariffs come. It’s just a never ending set of challenges that HR has to be prepared to solve.”

And, as companies have sought to fill vacant CHRO roles, some have found they can’t find successors with comparable expertise and appoint greener practitioners instead.

Moreover, not all C-suite leaders see CHROs as a strategic asset. Research from SAP and Oxford Economics found that 42% of C-suite executives don’t view HR as equal partners, and 36% see HR as only slightly critical to business strategy. SAP’s research also found that C-suite leaders tend to agree more with non-HR executives than CHROs on top priorities.

That perception has, at best, stagnated since the pandemic. In 2021, for example, 57% of C-suite executives based in the US, UK, Canada, and Australia viewed the CHRO as equal leadership partners in their organization, according to a survey by cloud-based business services company Sage. Additionally, Sage’s survey found that 87% of executives agreed that the pandemic transformed HR and gave it greater influence, but 52% of respondents thought those changes were temporary.

Now, AI poses a risk to CHROs’ strategic influence.

AI on the ball. As AI technology evolves and reshapes tasks, HR leaders will be critical to successful business transformation.

“If you’re a CHRO, and you’re not focused on AI, you’re already behind. Because AI is moving so fast,” said Tiffonia Noussi, a fractional CHRO who works with growth-stage private equity backed firms.

And yet, just 7% of CEOs surveyed by Gartner this year believe their CHROs are AI-savvy—lower than any other C-suite roles surveyed.

This perception “is a problem when the big change that everyone’s talking about is technology,” said McRae. “It’s particularly a problem when the fact is that one of the greatest weaknesses to the technological approach right now is that people do not have enough conversations about the impact on roles and workflows.”

While employers have poured billions of dollars into AI, despite not yet seeing an ROI, they’ve been more frugal with workforce development, said Philby. Research from Accenture found that companies spend three times more of generative AI budgets on technology than on people. And a 2024 Gartner survey found that only one-fifth of CIOs consider employees’ work or well-being when making decisions about generative AI.

This has left CHROs torn between investing in long-term goals and keeping up with short-term demands: The top two strategic priorities for CHROs over the next two years, according to a Korn Ferry survey, are growth and market expansion (69%) and cost efficiency (56%).

“They’re sort of being pulled in two directions,” said Philby. “It’s like, ‘How do we invest in the risk? How do we transform our business through our people, and at the same time, maintain or reduce our costs?”

As a result, CHROs—particularly those who haven’t had exposure to strategic conversations in recent years—are missing out on the most important C-suite conversations.

“We’re fighting about whether someone should be in the office three days, four days, or five days, instead of saying, ‘In five years, are we going to need the same people, and are we going to need people that have a different AI toolkit, and maybe we need to set up offices elsewhere in the world to attract those people?’” Kaplan said.

Time to step up (again). It’s critical that HR leaders not only be included in AI strategy conversations, but also bring insights and ideas to the table.

“In the past, HR has always been very reactive. And I think there’s an opportunity to be proactive and really saying the hard things really early, rather than waiting,” said Noussi. “And so I think that’s one area that we don’t talk about, but courage is a wonderful, wonderful virtue when it comes to being impactful in the HR space.”

HR leaders should have “both ears to the market” on AI, Kaplan said, including understanding the technology’s innovations and evolutions, engaging in forums with top AI leaders, and integrating their learnings into talent strategy. They should also make sure they’re included in five-year planning and AI strategy conversations with their C-suite peers, and advocate for HR priorities.

And while many functions are competing for money amid tightening budgets and AI investments, HR leaders should still make long-term financial plans, said Tamesa Rogers, a fractional CHRO who was Netgear’s chief people officer until 2024.

“I think doing nothing is the wrong decision,” Rogers said. “Even if you have to stagger it out, having a plan on what you can invest this year, next year, the following year. And then how do you, with that investment, make sure that you are also developing your workforce, or planning your workforce to accommodate it?”

For top CHROs, the question around HR getting a seat at the table is long over, said Kaplan. And those waiting for the CEO to seek them out as a strategic partner will likely be waiting a long time. “The best HR leaders aren’t waiting to be asked,” he said. They’re prepared with insights to share and an understanding of the AI ecosystem.

“There’s still a large population that is waiting to be asked and doesn’t realize that the plane has already left the terminal.”