Part 2: What comes next. Read Part 1: What needs to change.
As my previous article discussed, HR’s traditional four-legged stool model no longer suffices in the artificial intelligence (AI) era. The big question for CHROs is: What comes next?
I think the answer is a fundamentally different operating structure that positions HR as a data-driven, AI-enabled, experience-oriented strategic partner rather than a compliance-first administrative engine.
HR’s next model replaces those aging stool legs—HR shared services, centers of excellence (COEs), HR business partners (HRBPs) and field/country HR teams—with new pillars organized around business challenges and innovation cycles. At its core, HR 4.0 requires a new set of capabilities and competencies.
HR 4.0: From good to great at warp speed
The clock is ticking on HR’s dual mandate to adopt AI and deploy people-focused enablers required to support the organization’s AI enablement. Meeting both requires a fundamentally different HR capability stack with the following proficiencies:
- AI fluency: Leveraging AI tools for decision support, experience personalization and talent insights
- Experience design, capability building and workforce architecture: Co-creating employee lifecycle experiences using design thinking, behavioral data and feedback loops to improve engagement; identifying skill gaps, activating learning strategies and supporting leaders in building future-ready teams; aligning talent strategy to transformation by interpreting workforce analytics, skills data and predictive models to guide planning, mobility and performance
- Change enablement and agile delivery: Leading transformation initiatives, coaching leaders through disruption and fostering adaptability across teams; operating in sprints, collaborating in cross-functional pods and developing and iterating solutions aligned to business needs
- Stakeholder influence and ethical governance: Building trust, challenging assumptions and influencing senior leaders through data-driven storytelling and strategic framing; ensuring fairness, transparency and responsible governance in people decisions, especially those involving AI and data.
These capabilities mark a genuine reorientation of what HR delivers. Achieving them will require HR to shift from a reactive function to one that proactively drives business results. Despite the challenge, HR leaders must build these competencies and elevate them from good to great quickly.
The four pillars of HR’s next frontier
Following the “personnel department” era (HR 1.0), business partnership (HR 2.0) and strategic talent leadership (HR 3.0), HR 4.0 introduces “workforce futurism.” In this model, HR leaders operate as elite business partners while running HR as a business-within-the-business through the following roles and enablers:
1. Digital people team
As HR technology expands beyond systems and applications to AI agents, these digital workers will take on far more administrative and operational work now handled by HR professionals. Narrow AI will help human workers draft performance summaries while generative AI solutions draft job descriptions and offer letters. Natural-language AI tools will answer policy and benefits queries, while agents initiate promotions, transfers, pay changes and similar transactions.
2. Global people services
This function handles the more complicated administrative and operational work previously performed by HR business partners and specialists—activities that are too intricate, risk-sensitive or judgment-based for digital workers.
Rather than focusing on compliance, this team operates as a next-generation “engine room” of HR dedicated to excellence in five areas:
- Delivering service management, knowledge management and transaction execution
- Meeting country-specific regulatory and language requirements
- Proactive auditing of HR task execution, responses to external audit and reporting requests and people and regulatory risk mitigation
- Driving the effectiveness of the HR technology stack
- Partnering with people-product owners to innovate and improve HR products
3. People-product owners
This function replaces most of the process execution currently conducted within COEs. This team will design new HR “products” that enhance business value.
HR 4.0’s product portfolio will include categories and offerings such as:
- Workforce enablement: Upskilling at speed and scale, AI fluency and readiness, leadership development, learning and development and more
- Strategic organization: Organizational design, AI-enabled role design, strategic workforce planning, people analytics and more
- Business performance: Skill and headcount planning, compensation, coaching and mentoring, career paths and more
- Workforce vitality: Benefits, well-being, employee and labor relations, recognition and more
- Culture and experience: Culture, engagement, employee listening and surveying, design thinking and more
4. Executive people strategists
Fewer in number, higher in cost, these elite HR leaders collaborate directly with executives who exert the greatest influence on business performance. Measured on shared key business outcomes rather than traditional HR metrics, executive people strategists will address people-related points of vulnerability in business value chains while assembling cross-functional teams to solve these and other problems.
To be sure, this is not the only HR operating blueprint for an AI-enabled organization. Some CHROs may prefer journey-centric models that borrow from product management methodologies.
Mitigating relegation risk
This redesign will not be easy. Protiviti’s forthcoming AI Pulse Survey measures AI penetration across HR, finance, operations and IT—and, spoiler alert, HR lags each of those areas in AI adoption.
Additionally, most HR functions have lengthy records of responding slowly to major changes, instead reacting to how the business navigates change. This legacy and mindset require a reset if HR is to avoid being relegated to a transactional personnel department. Impatient CIOs, COOs and CFOs are already turning to outside experts for the organization design, job redesigns, skills-based talent strategies and dynamic workforce-planning activities that their HR colleagues have yet to deliver.
New metrics and mindsets will help. Key business outcomes within HR’s span of control can be managed via metrics like succession coverage ratios, return-on-talent investment, manager net promoter scores and workforce vitality indices. When their performance is monitored by these types of measures, HR groups will become more fluent in business terms like market share, productivity and time to market.
Final thoughts
For their part, CHROs should encourage professionals to stop viewing HR as a reactive, compliance-first support function and start operating as a business-first dispenser of proactive talent insights whose mission is to create value. HR leaders who succeed in doing so will move beyond the security of being indispensable to policy compliance to becoming essential to business growth and innovation.
For more information related to AI workforce transformation, please visit Protiviti’s People & Change consulting page.
