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HR leaders have been arguing for some time that alignment with C-Suite objectives is the best way to optimise their effect on the bottom line and see measurable ROI in their efforts.
The Holy Grail has been for recruitment and retention to attain the same level of importance to leadership as sales, marketing and PR.
And, if the World Economic Forum’s new Chief People Officers Outlook report is anything to go by, it’s very much starting to happen.
CPOs are finding themselves much closer to business strategy as organizations face short-term uncertainty coupled with long-term transformation and what were once called “unknown unknowns”
Based on a mid-2025 survey of more than 130 CPOs, the World Economic Forum report sets out a clear picture that shows that the people function is increasingly strategic, with companies relying on it not just to deliver an HR function but to actively influence and even lead strategy.
The report highlights three top priorities for the year ahead - redesigning organizational structures; focusing on culture and purpose, and accelerating the deployment of artificial intelligence (AI).
Despite the new-found trust in HR, however, caution remains the prevailing approach when it comes to the workforce, even while transformation is seen as a long-term imperative.
Labor market caution meets long-term change
The survey shows that 42% of CPOs expect no change in the labor market over the next year, while the rest are split between weaker and stronger expectations. Job openings and quit rates remain low compared to recent peaks, particularly in the US but also globally.
Many organizations are delaying hiring or restructuring decisions, waiting to see how macroeconomic volatility, geopolitical tensions and the technological disruption created by AI play out.
“Caution is the current setting – but transformation is the long-term opportunity,” it says.
That tension is also showing up in worker behavior. “Today’s talent is confident, well informed and unapologetically selective. They’re clear about what they want and willing to walk away from what doesn’t serve them,” one CPO notes.
Low vacancy rates and shifting expectations mean employees are in the unusual position of experiencing both confidence and insecurity at the same time. Mental health issues and a lack of faith in workplace value are also factors, with fears around AI amplifying those divides.
Leaders therefore see a pressing need to reinforce cohesion, culture and shared purpose to sustain engagement in increasingly fragmented workplaces. Which, of course, is why they are a lot more interested in what HR leaders can do to help.
Human-first AI deployment
But if labor market sentiment is cautious, AI is where the real urgency lies. Collaboration with technical departments, mapping the impact of AI on jobs, and redesigning roles and tasks are ranked as the top three short-term priorities.
CPOs describe AI not just as a tool for efficiency but a catalyst for more fundamental change. Proactively redesigning roles is seen as vital and inevitable as AI continues to become embedded into workflows.
For most, the thinking around AI is that it can remove repetitive tasks, freeing time for higher-value work, while improving decision-making, productivity and efficiency.
Turning workforce data into early warnings for high-cost employees
Many employers only learn about high-cost claims after the fact, relying on annual health plan reports that provide little opportunity for prevention. Yet when absenteeism, disability, and workers’ compensation are included, the top 5 percent of cases drive nearly 60 percent of total costs. Looking only at medical and pharmaceutical claims limits an employer’s ability to understand where risk is forming and how costs escalate over time.
By integrating medical, pharmaceutical, disability, absence, compensation, and broader human capital data, employers gain a more complete and predictive view of workforce risk. Workpartners’ Human Capital Risk Index (HUI) leverages this integrated data warehouse to flag emerging high- and moderate-risk cases early, enabling timely, HIPAA-compliant outreach and clinical prevention.
Through a holistic, person-centric care model, individuals receive high-touch support across health, work, and family dimensions—helping shorten or prevent periods of high risk and high cost. The result is earlier intervention, improved outcomes, and measurable reductions in utilization, lost time, and total cost.
What You’ll Learn
Why high-cost claims are often identified too late
How integrated data improves risk prediction
How our HUI flags emerging risk early
Why holistic, person-centric care matters
How early intervention reduces total cost
But concerns remain around employees not adapting fast enough, career stagnation through an over-reliance on AI, and ethical or privacy risks in areas such as hiring and evaluation.
The report warns: “Successful workforce AI integration will depend not only on effective technical deployment, but also on a deliberate redesign of work and a firm commitment to human-centred implementation.”
Without that, CPOs warn, AI could deepen disparities, erode trust and limit career progression.
Structure, culture and the new CPO skillset
When asked which practices are top of the agenda for 2025, CPOs had three major concerns - redesigning organizational structure and job design; focusing on workplace culture and business purpose; and supporting workforce deployment of AI.
Reviewing organizational structure and job design ranked highest, with 53% of respondents placing it in their top three and 21% choosing it as their number one priority.
More than half of respondents put culture in their top three as well. Culture, they argue, is often reshaped first by leadership models, making it essential to empower the next generation of leaders to foster resilience and guide change.
AI again made the top three, underlining its role as both a transformative force in the workplace and a threat to certain job roles.
Delivering on all of these requires a new type of CPO, with a much higher boardroom profile. Business acumen and strategic thinking are ranked as the number one success factor, with one leader stating plainly: “You can’t separate people and business anymore.”
Uncertainty over so many different variables means organizations are rethinking structures, workplace culture and role design. And while the transition is complex, it is also an opportunity for HR to play its part in shaping the future of business.
