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AI + humans: CHROs invest in both
As concerns about external business risks ease, many executives are turning their focus inward, investing in new growth strategies and transformation. In our August 2023 Pulse Survey, 87% of CHROs say they’re evaluating new ways to deliver HR value at a lower cost — with a greater focus on the employee experience and generative AI (GenAI).
Cutting costs is nothing new, but the modern CHRO is looking to manage costs and reinvest savings to improve the employee experience. These reinvestments often focus on two key areas, growing digital and GenAI capabilities within the HR function and developing tailored programs and rewards to enhance the employee experience.
How CHROs balance cost cutting with strategic investment in the HR function
83%
of CHROs say they’re doing more to address cost optimization in HR this year than they were 12 months ago
CHROs are searching for ways to do more without spending more. Just over half (54%) of HR leaders say they’re either changing employee benefits to reduce costs or have a plan to do so.
They also report reducing headcount (70% either have or plan to) and rescinding job offers (68% either have or plan to). At the same time, they’re hiring strategically. Seventy-seven percent say they’re hiring fewer new employees today than they were 12 months ago, while 83% also say they’re hiring talent with specialized skills. Examples we’ve seen include data analytics and proficiency in cloud platforms. By comparison, 61% say they’re hiring for entry-level and less specialized positions, down from 79% in October 2022.
About a third (32%) say their company’s highest strategic priority is introducing new revenue streams. And while the CHROs aren’t on the front lines of revenue generation, they play a key role in supporting that growth.
What you can do
Concentrate on managing the total spend of your employee benefit program. This can free up dollars that can be reinvested in capabilities to support business leaders, build specialized skills and drive greater productivity.
Find out which benefits and training programs matter most to your employees. This can help you ultimately increase the value you get from your offerings. In our experience, average savings can exceed $1,000 per employee, while also providing them with something of perceived value to them — a win-win.
Focus on change management. Use curated content, personalized experiences and leader-employee activation from start to finish.
Get more on this topic
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- What else is important to the C-suite right now?
How CHROs can influence GenAI adoption
80%
of CHROs either have a plan in place or are already training existing employees on new technologies
Despite the costs, CHROs are counting on new tech being worth the investment. Nearly three quarters (74%) say they expect to use GenAI to support new business models in the next 12 to 18 months. Roughly half (49%) say they will invest in new technologies over that same time period, and 43% will invest in GenAI specifically.
HR leaders don’t need to break the bank to implement these new technologies. Eighty percent — 16 points higher than the C-suite overall — say they plan on or are already training existing employees to use new tech. As technology evolves and new risks are identified and assessed, CHROs can take the lead during technology rollouts in developing the appropriate employee training and help foster change.
What you can do
- Embed yourself into your company’s GenAI initiatives. Doing so can position your role as a leader in embracing GenAI at the enterprise. HR can be an early adopter of new technologies. You might, for example, use GenAI to help with tailoring the onboarding process, sorting and screening job applicants or serving as a digital assistant to respond to employee inquiries.
Quantify the impact of GenAI to the workforce and how it ties to the company’s overall mission. Be open and transparent that adoption and implementation will balance the best interests of the business, employees and society.
Invest in upskilling your existing workforce on new technologies, including GenAI.
Proactively manage change initiatives. Communicate how and why you’re redirecting investments to more value-added services and programs.
Building the employee experience for more than one workforce
90%
of CHROs say they’re tailoring benefit and development programs for different types of workers
We’re already seeing division in the workforce between employees with and without specialized skills and access to training. As the need for people with specialized skills grows, this divide may widen further. How can you effectively manage both groups at once?
Skills-based talent architecture is one area, with 84% of CHROs saying they’re increasing such investments. This means not just taking stock of what skills your company needs and what you already have, but integrating that skills taxonomy into your existing job architecture — including jobs, job families and compensation. This becomes the foundation for talent intelligence and “career marketplaces” — and can lead to a more engaged workforce, provide opportunities for your existing employees and reduce reliance on lateral hiring.
In addition, 90% of HR executives say they’re developing benefit and development programs that acknowledge all workers. This includes developing separate workforce strategies for those with and without specialized skills or training — both in-person and remote employees and even those in deskless and frontline positions.
What you can do
- Develop an employee experience strategy that comprises meaningful work, inclusive culture, an adaptive ecosystem and holistic support.
- Invest in developing a skills taxonomy, powered by talent intelligence technology, to help pinpoint what skills your business already has and what it needs to acquire through hiring or development. That can allow you to increase internal talent before going to the market.
- Include human capital statistics in your reports to the board. Highlight the progress you’re making to reduce operating expenditures to fund investment in employee experience. This can help increase awareness with other members of the C-suite and the board.
About the survey
Our latest PwC Pulse Survey, fielded August 1 to August 8, 2023, surveyed 609 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and their company’s strategic plans and priorities. Of the respondent pool, 69 were CHROs or human capital leaders.
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