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It’s official. HR is no longer operating on the periphery, with 65% of senior leaders now viewing it as a key business enabler, according to a new report from the World Federation of People Management Associations.
Organizations with stronger HR capabilities are already seeing tangible returns such as lower turnover and a reduction in time to fill critical roles by roughly 17-18 days. At the top level, leading CHROs are working alongside CEOs to steer enterprise strategy and support execution.
Administrative workload stalls HR strategy
But whilst HR may be ready for the boardroom, it seems the boardroom might not be ready for HR, with some organizations unable to provide the support it requires to work effectively.
More than half of leaders, 51%, identify administrative workload as the primary barrier preventing HR from contributing more strategically.
“HR needs to move faster in terms of implementing digital technology, both within the HR function and driving the people elements of digital transformation across the business,” said Philipp Kolo, a BCG Partner and Director, and a co-author of the report.
“Moving from GenAI pilots to unlocking real and transformative value on the business side depends on focusing on areas including upskilling, adoption, and designing new ways of working. HR can make or break business performance in the AI era. CHROs must meet the moment to embrace what could—and should—be a golden era for HR.”
The challenge is not a lack of adoption, with nearly 70% of respondents reporting the use of generative AI in some capacity, particularly in reporting, learning, and recruiting. The issue is translating that activity into measurable outcomes.
Only 38% of respondents currently see high or strong relevance of generative AI for their organization, although 50% expect agentic AI to deliver high or transformational impact in the future. Not exactly as “all-in” as you might believe. That gap between present value and future expectation shows that adoption is widespread, but scaling remains elusive.
Risk concerns are a significant factor in that slowdown. Data privacy and compliance are cited by 51% of respondents as the biggest barrier to introducing generative AI. At the same time, 32% report having limited or no processes in place to measure those risks, leaving organizations exposed as they push forward.
The report suggests that the solution lies not in deploying more tools, but in redesigning work itself. Embedding AI across the employee lifecycle requires connected data infrastructure and a workforce equipped with the right skills to use it effectively.
Digital ambition outpaces capability
Digital solutions are climbing the HR agenda rapidly, rising 13 places in perceived future importance to rank 12th among key priorities.
Current capabilities in digital HR remain among the lowest overall, creating a mismatch between what organizations want to achieve and what they can currently deliver. HR leaders are under pressure to automate processes, generate analytical insights, and create seamless employee experiences, yet many lack the systems and integration required to do so.
Turning workforce data into early warnings for high-cost employees
Much depends on company size. Large organizations, traditionally slower to respond and change, are now moving faster, placing greater emphasis on data-driven topics such as people analytics and generative AI, while also demonstrating stronger capabilities in those areas. Smaller organizations, meanwhile, prioritize culture, rewards, and skills, reflecting different operational realities and levers for growth.
Alongside digital transformation, the shift to skills-based workforce models is far from widespread. Only 54% of companies use skills-based matching, while 48% run structured reskilling programs. Just 11% have fully embedded skills taxonomy across the enterprise, pointing to a significant execution gap in workforce planning.
Closing that gap is tied directly to measurable business outcomes, including retention, and progress on strategic priorities. The report identifies four core actions for CHROs to address these challenges: delivering business value through HR, leading AI and digital transformation, building workforce and leadership capabilities, and anchoring change through effective management practices.
“Ultimately, companies measure the success of the HR function by the value it creates for the business, not the volume of activity it delivers,” said Peck Kem Low, WFPMA President and a co-author of the report.
“The results of our survey make clear that HR’s remit has expanded. CHROs and their teams are expected to be at the forefront to lead the workforce transformation and help leaders achieve their ambitious agendas, through fit-for-purpose people strategies and matching HR capabilities.”
The HR function has already secured its place at the strategy table, but sustaining that position depends on resolving administrative burden, fragmented digital capability, and uneven AI impact, which all stand in the way of delivering the value now expected from senior leaders.
Five key take-homes
65% of senior leaders view HR as a key business enabler
Strong HR capabilities reduce time to fill roles by 17-18 days
Nearly 70% of organizations use generative AI, but only 38% see strong relevance
51% cite administrative workload as the main barrier to strategic HR contribution
Only 11% of companies have fully embedded skills taxonomy across the enterprise
