Leading the charge: A CHRO’s guide to successful HR transformation

Human resources (HR) transformation can be rife with hopes and fears. As a company leader you’re not simply tasked with navigating the usual HR challenges like recruitment, employee retention and performance management – you’re increasingly responsible for identifying and addressing skills gaps while steering your organization through an evolving journey that has the potential to make or break workplace culture.

PwC’s 2024 Workforce Radar Report sheds light on the pressing question: How can you power through the challenges of HR transformation and emerge stronger?

The answer lies in becoming both a talent magnet and a talent factory, meaning attracting top talent to your organization while simultaneously developing and nurturing the skills and potential of your existing workforce.

But there’s more. According to our October 2024 PwC Pulse Survey, human resource leaders who are dedicated to enhancing workforce potential and increasing productivity often see technology integration as an obstacle to reaching their goals. In fact, 51% of CHROs indicate that investing in skill development, particularly in areas like artificial intelligence, is a major challenge. So, how can you bridge this technology gap and enable a successful HR transformation? Let’s dive into the three integral phases of HR transformation: Before, During, and After.

The Before: Set your vision

No transformation can happen without a vision.

Before setting your HR transformation strategy, evangelizing the plan or rolling out any changes, you should ask yourself an important question: Is this a “big T” transformation, meaning fundamentally changing how we deliver HR? Or is it a “little t” transformation, focusing just on technology? Your answer, which will likely set the groundwork for your vision, should be crisp and clear. It’s also important to keep in mind that while HR might not be a profit center, you will likely need a compelling business case that resonates with the C-suite. HR leaders can create this business case by demonstrating how strategic HR initiatives, inclusive of technology adoption, can directly contribute to organizational goals, such as increasing productivity, reducing turnover costs, enhancing employee engagement and driving better financial performance.

Another important thing to remember: The seven most expensive words in business are often, “Because we’ve always done it this way.” This mindset can be the enemy of real transformation. Instead, craft a narrative that highlights how your employees feel when they come to work every day. Spend more time upfront developing this story and crafting a clear business case that can garner buy-in.

Think of your plan like a photographer capturing their perfect image: set your aperture, compose your image and focus the shot. New capabilities in HR—like self-service, artificial intelligence (AI) automation and workflow changes—should contribute to the employee experience, and your vision should guide this process.

Finally, it’s imperative that you avoid viewing HR transformation as a finite project. It’s not meant to be a “set it and forget it” approach. Rather, it’s an ongoing journey that requires continuous, planned efforts and ongoing tech implementations to keep up with evolving needs.

The During: Lead the charge

Chief Human Resource Officers (CHROs) can set the tone for the organization.

In successful transformations, CHROs should lead from the front. They should be invested, constantly selling the vision and bringing their teams along and helping to clearly communicate the benefits to everyone – from other members of the C-suite to new employees. When transformation doesn’t go well, falls flat or fails to achieve widespread adoption, it’s often because the CHRO takes a backseat. To succeed, you should realize that you are the transformation.

This means design principles are crucial. Your vision should guide your decisions, and a good collaborator can help you understand the consequences of each choice. For instance, if a design principle like “no approval should take more than two clicks” becomes a guardrail, it can also become a prime opportunity for you to pressure-test your design and standardize processes.

Upskilling and empowering your team is also important. At this stage you have sold the vision — now confirm you have the desired team with the necessary skills in place. Lead from the front, check the map and elevate your team.

Embracing a skills-focused approach

Leading the charge often extends much further than design principles and an upskilling ethos alone. It means embracing a dynamic and forward-thinking approach that acknowledges the fluid nature of modern job roles. In the past, jobs were neatly defined boxes. Today, they resemble clouds—constantly shifting and evolving. The skills that define these roles no longer fit into rigid categories, demanding organizations to adapt.

Transitioning to a skills-focused organization can be a substantial undertaking, and it's important to approach it pragmatically. To do this, identify the more significant pain points to help prevent the process from becoming overwhelming. Start by examining your data: Is your organization struggling more with attracting new talent or retaining existing employees?

As a CHRO, your decision-making should be collaborative, involving functional leaders to uncover skills gaps you might overlook. Engage with voices like your CIO or CFO, who can provide insights into the skills necessary for a future-ready organization. It is also helpful to keep in mind that many companies encounter two prominent skills deficiencies:

• Foundational skills gap: Formerly known as soft skills, these are irreplaceable by AI. Employees who excel in interpersonal communication, exude positivity and are eager for continuous learning fall into this category. They possess the ability to manage themselves and others while integrating seamlessly into corporate culture and business competencies. Retaining such talent is imperative to your success.
• Technical skills gap: These capabilities extend beyond data analytics to include working with AI agents, synthesizing information and identifying actionable insights. It’s about understanding how to work effectively alongside AI.

Integrating AI with the right blend of skills can ultimately enhance your organization’s adaptability, flexibility and sustainability. It’s no longer just about job titles; it’s about developing broad skills that employees can acquire, utilize and build upon continuously.

By focusing on these evolving skillsets, many organizations can not only meet current demands but prepare for future challenges.

The After: Champion continuous improvement

There is no finish line in HR transformation.

Once you have gone live, start asking, “What is beyond this?” Focus on maturing capabilities, continuously improving processes and consistent upskilling. Decision-making doesn’t end here, either. As an HR leader or CHRO, it’s your job to keep the energy level high and your team engaged in the long-term vision.

If your organization has implemented a new cloud platform, for example, you’ll likely have access to an incredible wealth of new data. Data governance and strategy should be part of implementation, self-auditing at regular intervals and making sure it stays clean. This is an ongoing exercise. Additionally, in the spirit of continuous improvement, integrate AI where possible to help streamline operations and free up time for more strategic work – but remember, clean data is important for effective AI implementation. Remember the adage ‘garbage in; garbage out.’

Finally, remember that feedback can be a gift. Try not to get defensive; invite feedback in, listen and act on it. A continual focus on the bigger picture and actively listening to your employees and customers can help keep your overall HR transformation on track and your organization in a position to thrive.

Ultimately, as CHRO, you have a unique opportunity to drive meaningful, long-term HR transformation that allows your company to be more nimble, adaptable and future focused. By setting a clear vision, leading from the front and continuously improving, you can enable your organization to become both a talent magnet and a talent factory.

As CHROs navigate the evolving landscape of HR transformation, PwC and Workday are joining forces to help streamline the journey—leveraging industry-leading technology and deep industry expertise. Together, we help organizations integrate AI, automate workflows and build skills-focused, adaptable workforces.

From setting a strategic vision to driving continuous improvement, our collaboration helps confirm that HR leaders have the necessary tools, insights and agility to succeed. With Workday’s innovative platform and PwC’s transformation expertise, you can unlock workforce potential, enhance productivity and future-proof your organization.

Let’s lead the charge—together.