HR's reinvention moment
Why great People leadership is essential in the age of AI
“Why HR?” People ask me this regularly. After building companies and leading teams at Google and Slack, why focus on the People function? HR is often dismissed as hall monitors or, worse, the layoff executioners. But the People function holds the key to what’s next as AI transforms organizations.
I was in the office of a CHRO recently, staring at a wall mapping out HR initiatives and workstreams: performance reviews, engagement surveys, compliance checklists, training programs. “We know over half of this needs to go away,” they told me. “It’s not adding value.”
That wall captures HR’s existential crisis. Samantha Gadd, founder of employee experience consultancy Humankind and co-author of the forthcoming Employee Experience Design, offers a brutal test: “Put everything your team works on up on a wall. Then ask yourself what employees would actually miss if you took things off.”
The calls for change are coming from forward-thinking People leaders who understand that AI creates opportunity—but only if HR transforms itself first. That transformation needs support: research that challenges conventional wisdom, case studies from companies actually making it work, and forums where leaders learn from each other rather than from consultants selling solutions.
That’s what Charter is building, and it’s why I’m working with them. Today’s newsletter will give you a sense of why—starting with why 2026 is HR’s make-or-break year..
Charter People leadership dinner in San Francisco, December 9th 2025
Two futures emerging
Recent conversations across HR conferences and with dozens of CHROs reveal a clear fork in the road. One path leads to HR diminishing—most functions automated or absorbed by business leaders armed with new tools. The other path leads to evolution, with HR taking the lead role in driving organizational AI transformation.
Which path organizations take won’t be determined by market forces. It’ll be determined by whether HR can prove its strategic value before business leaders decide they don’t need it.
Tracy Layney joined a recent Charter Forum I ran. As former CHRO of Levi Strauss & Co., she now teaches human capital strategy at Chicago Booth while advising both Fortune 500 CHROs and HR tech startups trying to disrupt the space.
She put it bluntly: “If you didn’t need HR, IT, or finance, you could outsource those, which people have been trying to do for a very long time, and usually with marginal success. For us in HR, the imperative is to demonstrate value creation. I don’t demonstrate value by selling to a customer, but I do demonstrate value by making sure I have the best salespeople.”
Tracy Layney
This isn’t a new issue for HR, at all. But the risk is now very real. AI-powered tools now enable business leaders to assess skills, automate recruiting and screening, and manage performance—all without HR involvement. When leaders can treat People teams as pure cost centers, they will.
When Salesforce acquired Slack, our HR team was labeled as over-invested: too many people, too much cost. What the acquirer missed: our engineers shipped product faster because of that back-end support. After the swap to Salesforce’s leaner model, engineers quit—over paperwork and tickets that never got resolved. Every dollar “saved” by cutting HR vanished into lost productivity and attrition costs.
But here’s the opportunity: as Ethan Mollick argues, HR should be R&D for organizations. These are the people who understand organizational behavior and design. With the right leadership, they could be redesigning how work happens rather than managing how policies get followed.
The automation paradox
AI offers HR a way out of the activity trap, but only through fundamental shifts starting with HR’s own work. First, there’s the basics of the jobs in HR themselves. As Layney put it: “AI can write great job descriptions. A recruiter or HR business partner probably should never write one again once they know how…but they should know what good looks like and they should then focus on more value added work.”
That’s the distinction. AI should eliminate low-value administrative work—job descriptions, paperwork, policy questions. The question is what HR becomes once those tasks are automated.
The trap most companies have fallen into: treating AI as a cost-cutting excuse rather than an optimization opportunity. “Most companies haven’t optimized AI,” Layney observes. “They’re using it as an excuse. They have to spend on AI, so they’re cutting heads to fund it, but they’re not getting the efficiencies yet.”
Source: Challenger Gray, Nov 2025
The result is a fear culture that undermines the very transformation these investments are supposed to enable. “You can only operate in that for so long without real depletion,” Layney warns. People burning out while automation fails to deliver—that’s not transformation, it’s managed decline.
The fundamental shift: HR can’t keep being the “spans and layers” people who count headcount and manage org charts. They need to become strategists who redesign how work actually gets done.
What strategic HR actually looks like
Three approaches separate the leaders from the laggards:
Solve business problems, not HR problems. Stop asking “How do we get people to update their development plans in the system?” Start asking “Why are we losing customer deals because sales and product can’t align on roadmap priorities?” That reframing changes everything—from process management to strategic enablement.
At a recent Charter CPO dinner, Layney challenged the room: “We should be turning it on its head: you’re not going to win by cutting 10% more than everybody else. There’s no reason HR can’t lead those conversations: what is our vision? We then have to deliver the people strategy to fulfill that vision.”
Build product management capabilities. Treating employee experience like a product isn’t a new idea—it’s just rarely executed. HR needs actual product managers who understand the end-to-end journey of work—from application through exit—rather than separate HR processes that don’t talk to each other.
You need to pair people with those skills with subject matter experts: compensation, learning, performance management and more. AI won’t eliminate the need for experts who can push the field forward, and in the interim can validate what’s real.
Functional teams and business units lack the skills and tools needed to overhaul how they work. It’s really hard to redesign work processes that aren’t visible. HR’s organizational design and job mapping skills plus AI tools create the ability to understand how an organization really works as opposed to the myth of an organization chart. HR is uniquely positioned to leverage to get clarity around how people actually work, identify friction, and build solutions.
Lead skills-based transformation. AI tools now map organizational skills in weeks, assess market demand, and quantify disruption risk per role. “If you’re taking a skills-based approach,” Layney explains, “it’s much easier to understand the AI implications.”
This builds the foundation for strategic workforce planning in an AI-enabled world. Organizations that understand their workforce at the skills level can make smart decisions about where to invest in humans, where to automate, and where to build entirely new capabilities. Those that don’t are guessing.
Canva’s strikingly simple approach to skills-based management
The leadership gap
Here’s what won’t happen in 2026: AI won’t replace HR.
Here’s what will: business leaders will decide whether HR remains strategic or fades into irrelevance. And they’ll make that decision based on whether People teams prove their value before someone else proves they’re unnecessary.
These changes demand HR leaders who speak business language, demonstrate value creation, and lead transformation rather than manage compliance. As one CHRO put it: “We need to stop being the people who answer policy questions and start being the people who help the business win.”
The gap between what HR could be and what it currently is has never been wider. AI doesn’t create this gap—it just makes it impossible to ignore. Every day you spend on activities nobody would miss is a day you’re not solving the problems that matter.
The organizations answering honestly—and acting on what they learn—will become the strategic partners their businesses need. Those that don’t will manage an increasingly irrelevant function.
The best support I got throughout my career—from startup days through Google and Slack—came from HR partners who made me a better leader. People like Mariah DeLeon at Alibris, Alex Buder Shapiro and Catherine Brown in our days at Google, and Dawn Sharifan at Slack. They didn’t answer policy questions. They helped me build better teams and solve actual business problems.
But HR leaders need support too. And the traditional organizations serving them are failing spectacularly. In the case of SHRM, they’re not just stale—they’re actively demonstrating what not to do.
This is why I’m working with Charter. They’re building what forward-thinking HR leaders actually need: research that challenges assumptions, case studies from companies making it work, and a community of leaders learning from each other. Not compliance training. Not policy frameworks. Strategy for building better organizations.
(And yes, the basic newsletter and many resources are free—because this conversation needs to be accessible to everyone trying to build better teams.)
The choice is binary: reinvent or fade away. You can’t do both, and waiting to decide is itself a decision.
Which future are you building?
Want to learn more about reimagining work for the AI era? Join Charter’s community of leaders focused on building a better future of work for people and organizations and follow them on LinkedIn.
Related Reading
Dean Carter, Samantha Gadd, and Mark Levy’s upcoming Employee Experience Design is brilliant; pre-order your copy today.
Eric Anicich and Dart Lindsey’s Reimaging Work as a Product is a must-read.
You can also follow my columns on Charter for free!
One last pic: Jacob Clemente, Massella Dukuly, Michelle Peng, and me at the Charter Workplace Summit back in October!
Always appreciate your insights, Brian. This conversation has been circulating in our field for decades...I even wrote my graduate thesis on HR becoming a true strategic business partner (and that was awhile ago!) ;/
I think what has shifted is business expectations. With AI now able to handle so much of the transactional and operational load, the expectation for HR to be data-driven, strategic, and proactively connected to the business isn't a "nice to have" anymore. It's the baseline. AI won't just make their work easier. It'll make their roles redundant.
One problem I see over and over again in organizations is that HR doesn’t get the development needed to actually be and think strategically. Especially in small to mid-sized organizations, the HR team gets bogged down with the tactical and don’t truly know what thinking strategically looks like. Strategy is not something that just comes naturally to most people, it needs to be developed and practiced.