HR Transformation: Better Elevate Your Organization’s Performance and Growth

HR transformation is the evolution of HR to drive operational excellence and create greater business value.

HR transformation

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Transform the HR function to deliver more impact

HR transformation is more urgent now than ever as talent becomes an even greater driver of competitive advantage. It’s critical for success in a world with new cost pressures, hybrid work models and ever-evolving employee expectations.

HR transformation doesn’t have to be a wholesale restructuring or massive change. It’s about CHROs evolving, even if incrementally, the HR function to better align people, strategy, processes and technology with business goals to deliver more impact for all stakeholders.

The 4 key components of HR transformation

A successful HR transformation must consider changes in four areas: world-class leadership, a modern HR operating model, future-proofed HR team competencies and HR technology enablement.

Where effective CHROs focus

Highly effective CHROs today do more than just lead the HR function. Rather they help enable business success across the enterprise as a strategic business leader. Specifically, top CHROs:

  • Build a strategy for the HR function and adapt it as the business and operating environment change

  • Provide key inputs to business strategy development

  • Position the HR function (operating model, structure and staffing) to meet business needs

  • Optimize the HR function’s budget

The best CHROs know how to distribute HR leadership among their direct reports to create a future-focused, financially disciplined function while also contributing to the overall vision and strategy of their organization.

Model of a world-class CHRO

The Gartner Model of the World-Class CHRO provides a roadmap for greater personal effectiveness and strategic leadership, based on these best demonstrated qualities:

  • The board and CEO’s leader of human capital and culture

  • Ability to win in a dynamic talent landscape

  • Leader of enterprise strategic change

  • Leading through evolving stakeholder scenarios

  • Trusted advisor and coach

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

In their increasingly strategic position, CHROs also have 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 organization 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 nonexecutive directors understand the role of each member and commit to continuous improvement.

Economic and social volatility has reshaped workplaces and the talent landscape

A series of recent shocks, such as the COVID-19 pandemic, widespread adoption of hybrid work and the Russian invasion of Ukraine, have reshaped workplaces and the talent landscape. As a result, the CHRO’s role as creator of talent strategy — and associated strategic workforce planning — have shot to the fore.

Devising a people strategy that maps to business needs in an uncertain world requires CHROs to identify strategic priorities, analyze emerging trends, translate priorities and trends into workforce capability needs, and prioritize those capabilities — all based on solid labor market intelligence and workforce analytics.

CHROs must recognize the limits of HR’s expertise and ability to react to novel talent demands as they arise. World-class CHROs recognize HR’s role as a convener and catalyzer in the organization — bringing stakeholders together, orchestrating frameworks for them to make decisions and inspiring a flow of new ideas for the workforce.

Upgrade your HR operating model to support changing business needs

The HR operating model is a foundational piece of any HR transformation strategy, as it organizes the structures, capabilities and processes through which the HR function delivers value to stakeholders.

In evaluating the performance of the existing operating model, HR leaders must consider all its moving parts — from the responsibilities of HR business partners (HRBPs) and the structure of shared services, to the ways in which HR professionals interact with leadership and how technology is used. This will continue to be a focus, as demands on HR begin to outstrip HR’s supply of resources.

4 ways HR operating models are evolving

Gartner expects progressive CHROs to transform the HR operating model in the following 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 centers of excellence (COEs).

  • Build a robust HR operations and service delivery team.

Reinvent the HRBP role as strategic talent leaders

HR functions must redesign the senior or VP-level HRBP role toward a more analytically oriented strategic talent leader and reallocate transactional tasks. Similar to present-day HRBPs, these leaders are aligned with a specific business unit or function, and own the talent management strategy for that group. Effective strategic talent leaders must think holistically about the strategy of the business and talent processes that support the business’s goals.

Create a dynamic pool of HR problem solvers

A dynamic pool of problem solvers that works on various strategic projects is critical to the success of the HR operating model of the future. As their name suggests, problem solvers’ primary job is to hypothesize, test and build solutions to strategic problems. This team creates and upgrades resources, practices and policies used by HR and the workforce. It effectively serves as the “flex muscle” of the HR function, agilely moving from project to project.

Provide agile support with next-generation COEs

Next-generation COEs need to become more agile, dynamic and adaptable. The overall goal of COEs remains unchanged: Provide deep expertise in important subject areas for HR. They achieve this goal by redistributing and specializing tasks across other roles in the HR operating model of the future. For instance, instead of being the sole producer of talent management policy, practices and procedures, COEs work with the problem-solver pool to develop policies, practices and procedures across HR. In addition, COEs rely less on full-time, static teams and rely more on external, contracted work.

Build a robust HR operations and service delivery team

As organizations increasingly outsource and automate transactional and administrative tasks, they have an opportunity to upgrade HR’s operational capabilities. Led by an HR COO, an HR operations and service delivery team should include shared services, human capital intelligence (HCI), people relations managers and the HR technology team. The goal of the team is to act as a centralized, dedicated team servicing employees and managers with the proper infrastructure and support to effectively carry out their day-to-day work.

Understand the knowledge, skills and competencies your employees must possess to support the business

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

  • New ways of working

  • Increased demand for data-driven insights

  • Evolving HRBP roles and competencies

New and evolving workforce needs

Today’s hybrid work environments and rapidly changing business priorities require new ways of working. As organizations shift business strategies and implement new processes and structures, HR must be prepared to support the execution of these changes. HR staff can use an open-source change approach to ensure that employees remain engaged despite potential change fatigue. HR must also support leaders in developing their ability to be more human-centric to ensure a happy, healthy workforce that can generate sustained performance.

Data-driven HR insights

HR increasingly needs data-driven workforce insights — and the skills to turn talent analytics into workforce plans and decisions. The growth in the number and availability of employee data sources requires HR professionals to develop their ability to not only analyze employee data but also communicate that data effectively to their audience.

By asking the right questions, choosing the right metrics and crafting a compelling narrative with the right data, HR professionals can drive better data-driven employee decisions. In doing so, they can increase their business impact and play a more strategic role within the organization.

Shifting HRBP competencies and roles

As the HR operating model changes, the HRBP role is likely to be split between more specialized roles. HR leaders must ensure their staff are equipped with the competencies necessary to effectively provide value to the business in these new roles. Gartner’s HR Professionals Competency Model identifies the critical competencies and behaviors HR employees must demonstrate to be effective strategic partners to the business.

HRBPs as strategic talent leaders

Strategic talent leaders are a VP-level evolution of the HRBP, focusing on strategic priorities, and are aligned with a specific business unit or function. This requires strong business acumen and talent management skills to work with the aligned business unit or functional leader, as well as strong strategic consulting and relationship management skills to collaborate and network within and outside HR. Data judgment is critical to helping these leaders use and interpret labor market intelligence and other talent data to inform decision making.

HRBPs as problem solvers

Problem-solving HRBPs define talent problems and hypothesize, test and build solutions. Core competencies for this role are similar to those of a consultant: project management, consultative problem solving, relationship management, as well as creativity and innovation.

HRBPs as people relations managers

These are a central pool of HR staff that takes on much of the work traditionally owned by the HRBP role, including compliance, employee relations issues and people manager support responsibilities that are not self-serve or automated.

Expertise augmentation across the HR function

HR faces more novel workforce and technology issues. In addition to building HR’s internal capabilities, HR must facilitate permeable movement of skills and ideas into the function from other areas to develop solutions. HR must be ready to both encourage and collect those innovations that originate outside of HR and remove the barriers to people and ideas flowing into the function.

Leverage the power and promise of HR technology to increase HR’s impact

With radical flexibility and hybrid work environments the norm, it’s imperative to leverage technology effectively to provide a seamless employee experience. Virtual and technology-enabled processes can create both positive and negative impacts, and Gartner research shows that employees who are dissatisfied with workplace technology are twice as likely to look for new positions externally than internally. (Gartner clients: See full research here).

People-first technology strategy

With significant advances in HR technology, HR technology leaders are poised to become the catalyst of change across HR processes as technology now touches every aspect of employees’ lives. To power this transformation, technology should be more accessible and help employees “in the flow of work.”

To empower and engage their workforce, HR needs a people-first HR technology function. This means that the pillars of the operating model — the processes, structure, team capabilities and network — must be informed and aligned. When successful, a people-first HR technology function can improve key people and business metrics around DEI, well-being, collaboration and innovation.

Emerging HR technology

Innovations, such as generative artificial intelligence (GenAI), machine learning (ML), natural language processing (NLP) and virtual assistants (VAs) all play a part in this evolution toward more virtual HR processes. These technologies may result in more tasks directly in the hands of managers and employees if incorrectly deployed. As such, HR must take a “business-enabling” implementation approach — co-creating solutions with end users rather than automating past HR-defined ways of doing things.

HR leaders responsible for investing in emerging technology must:

  • Ensure that investment in innovative technology is balanced between business transformation versus cost and risk

  • Focus on trends that have an immediate impact on employees and HR operations

  • Drive HR process innovation using a digital-first, location-independent strategy by creating a roadmap to move from ad hoc, task-based automation projects to end-to-end process transformations

  • Create a more secure remote operations environment by enhancing employee data privacy and adopting adaptive access management strategies

  • Assess trends that are likely to impact HR strategy over the next five years by evaluating the function’s capabilities in collecting, maintaining and analyzing complex datasets to turn them into actionable insights that influence employee behavior

Talent analytics technology solutions

With the growing importance of talent strategy, it’s imperative to implement new approaches and supporting technologies to track, develop and deploy talent. IT marketplaces and worker data platforms are key. Locate critical talent hot spots, identify skill relationships and competition for in-demand skills, and ultimately turn data into actionable insights.

IT marketplaces and skills and worker data platforms are key and must be incorporated into technology roadmaps.

From there, you’ll be able to turn data into actionable insights. This means locating critical talent hot spots and identifying skill relationships and competition for in-demand skills.

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FAQ on HR transformation

HR transformation is the evolution of the HR function such that service delivery, talent and technology are seamlessly integrated and aligned with HR strategy to create greater business value for internal and external stakeholders. It doesn’t require wholesale, immediate change but instead a thoughtful approach to improving both operational excellence and the strategic impact of the HR function over time.

Due to cost pressures, hybrid work models and fast-evolving employee expectations, HR transformation is a critical prerequisite for business success.


To drive a successful HR transformation strategy, HR leaders should take following steps:

  1. Build an HR transformation narrative by defining the why, the what and the how of the transformation.

  2. Create a long-term master plan for implementation by breaking down activities into manageable steps, considering dependencies and setting a realistic timeline.

  3. Manage the change with open communication along the way, driving employee engagement and equipping managers to lead through the change.

HR transformation delivers:

  1. World-class leadership

  2. A modern HR operating model

  3. Future-forward HR roles and competencies

  4. Integrated HR technology and analytics

Drive stronger performance on your mission-critical priorities.