McKinsey Explainers

How is the CHRO role

changing?
The new mandate? Propel technological and operating-model
changes in HR while still keeping the “human” in human resources.

November 2023
For decades, there has been a single generally
accepted way for multinational companies to manage
people. This approach, pioneered by professor
and management coach Dave Ulrich in 1996, is
characterized by three pillars, adjusted to fit each
organization’s unique needs: business partners in
human resources (HR), specialized cross-disciplinary
units known as centers of excellence, and shared-
service centers.
That’s changing. There’s no longer just one HR
archetype to rule them all. HR now plays a central
role in helping organizations navigate change,
and modern chief human resource officers (CHROs)
are innovating in ways that are helping HR functions
evolve. The three-pillar model is breaking down
in favor of a pool of professionals who can be quickly
deployed to deal with the most critical issues or
the highest priorities. The CHRO’s job, as a result,
is becoming more nuanced than ever before.
How are the roles of today’s CHROs changing, and
how are they extending the reach and scope of the
HR function? Read on to find out.
Learn more about McKinsey’s People &
Organizational Performance Practice.
What are the five emerging HR
operating models?
Employees have made it clear that they want to
be managed differently in an era of hybrid working
models and the rise of the majority-millennial
workforce. In response, organizations are rethinking
their approaches. Many are looking closely at five
emerging HR operating models, all of which are
enabled by two core elements: a strong, consistent
data backbone and a user-friendly, highly reliable
service backbone.
1. The Ulrich-plus model
Many CHROs believe the classic HR model is
unable to meet today’s challenges, especially in the
case of multinational businesses with mature
business models. But an updated version of the
Ulrich model could change their minds by
making centers of excellence more flexible and
assigning more execution responsibilities to
HR business partners.
2. The agile model
CHROs who favor this model believe that HR
needs to move more quickly to accommodate rapid
transformations in their organizations. The agile
model features fewer HR business partners, with an
emphasis on counseling top management. And
it has center of excellence teams focusing on data,
workforce planning, and diversity, equity, and
inclusion initiatives.
3. The employee-experience-driven model
This model is meant to help CHROs gain a competitive
advantage by creating a world-class employee
experience journey. This means allocating outsize
resources toward “moments that matter,” such as
onboarding. The companies that employ this model
are highly dependent on their top talent.
4. The leader-led model
In this model, CHROs transition HR accountability
to the business side, supporting line managers with
HR tools and back-office support for processes like
hiring, onboarding, and development. Companies
exploring this approach typically have a high share
of white-collar workers, with a strong focus on
research and development.
5. The machine-powered model
HR professionals in a machine-powered model
focus on providing employees with counsel, leaving
tasks like talent selection and absenteeism analysis
to algorithms. Organizations experimenting with
digitization typically employ a large population of
digital natives.
In large, diversified organizations, CHROs may
find that different archetypes are better fits
for various aspects of the business—and may adopt
a combination of HR operating models.
How is the CHRO role changing? 2
Technology is a critical source of value
creation for every business function.
HR is no different, and CHROs must
link technological insights and
business decisions.
How are CHROs putting the ‘human’
back into human resources?
For years now, HR leaders have struggled with an
increased emphasis on cost efficiency. They’ve
been tasked with a worthy but uninspiring mandate:
optimize labor costs, reinforce compliance using
standardized measures, and support the adoption
of technology. Even in the most meaningful and
culturally significant areas of HR—recruitment and
learning and development—leaders have had to
focus more on productivity and how to measure it.
McKinsey’s recent interviews with dozens of
European CHROs reveal that there’s a marked
desire in that part of the world for more people-
centric policies in organizations, based on
the view that some core human element of talent
management has been lost in the wake of
technological advances, such as generative AI
(gen AI).
Of course, technology is a critical source of value
creation for every business function. HR is no
different, and like senior leaders in other business
functions, CHROs must link technological insights
and business decisions. Here are four ways to go
about this process:
1. Engage more directly and deeply
with employees
Many of the European CHROs we interviewed told
us they wanted to transform their functions to
engage more directly with the workforce, moving
away from self-service solutions. It’s better to
implement processes face-to-face with employees
or at least with enough individual or customized
attention to make remote interactions feel like
personal ones.
2. Let employees bring their whole selves to work
The vast majority of CHROs we spoke with said they
wanted to address the employee experience in a
more targeted, dynamic way. This may mean taking
a broader view of diversity, equity, and inclusion in
the organization and acknowledging and addressing
employees’ sense of purpose.
3. Pave the way to the ‘new possible’
CHROs can make agile workforces a reality by
spreading decision making across the organization.
It will be important to empower line managers
and help employees throughout the organization
develop agile skills and mindsets.
4. Act as ‘human capitalists’
CHROs may need to expand their view of talent
to prepare for changes in demand and the nature of
work required. They may need to engage more
temporary workers and freelancers, for instance—
not necessarily to cut costs but to increase
flexibility and tap into different pools of talent.
Learn more about McKinsey’s People &
Organizational Performance Practice.
Speaking of talent, how can CHROs
find and keep much-needed tech talent?
According to McKinsey analysis conducted in the
wake of the 2023 tech layoffs, more than 80 percent
of laid-off tech workers found new jobs within
How is the CHRO role changing? 3
three months—often with incumbent companies.
This means that technology firms are becoming
a little less “techie,” while incumbents are becoming
more so.
To boost their organizations’ tech capabilities,
CHROs can work closely with technology leaders to
explore new approaches to sourcing, supporting,
and scaling technical expertise. When it comes to
sourcing, HR and technology leaders can emphasize
skills rather than pedigree when filling critical
technology roles. In supporting technology talent,
leaders can themselves use digitization to
streamline processes wherever possible. Digital
approaches and tools, such as psychometrics
and gen AI, can help leaders propose specific
trainings an individual might need ahead of a
specific meeting or in anticipation of an internal
process change. And finally, to scale a skills-
based working model, leaders need to ensure
continual upskilling and reskilling.
How could gen AI affect
the HR function?
Gen AI is not just for computer scientists; it can
be used in all types of jobs. OpenAI, the artificial
intelligence research lab behind ChatGPT,
estimates that 80 percent of jobs can incorporate
gen AI technology and capabilities into work
activities today, giving CHROs an important role in
countering workforce concerns about replacement
and loss. For a wide variety of technical abilities—
including coordination with multiple agents, social
and emotional output, and natural-language
understanding—gen AI will match the median level
of human performance by the end of this decade.
CHROs can use gen AI to shape talent management
in several meaningful ways. Gen AI can augment the
employee experience by helping to facilitate the
training and upskilling process, enabling employees
to pick up new skills more quickly. It can empower
middle managers by freeing up more capacity so
that they can shift their attention to higher-value
leadership tasks, such as strategy-focused work and
people management. It can help with candidate
relationships, allowing for a more personalized
approach that includes identifying other available
roles to fit the candidate’s talent profile. And once
the candidate is hired, gen AI can help companies
match the new employee with mentors and coaches
to help improve the onboarding experience, upskill
talent, and streamline administrative tasks.
Gen AI also has the potential to accelerate the shift
in focus from credentials toward learned skills in the
recruiting process. Gen AI does tagging extremely
well, according to McKinsey senior partner Lareina
Yee. That’s “the ability to tag unstructured data for
words,” she says. “Now you don’t need to look for a
credential or a degree. You could look for keywords
in terms of capabilities and skills.”
To lead significant organizational change, HR
leaders must themselves be inspirational, focusing
on the organization’s internal culture and capacity
for change. Aside from their core responsibilities, it
is important for CHROs to spend their time not only
observing and listening but also proposing,
explaining, and convincing.
Learn more about McKinsey’s People &
Organizational Performance Practice.
How can CHROs build the leadership
capabilities required for an agile
transformation?
CHROs we spoke with from Europe and Asia–
Pacific shared some lessons for how to employ agile
ways of working in people management functions.
They note that leadership is the most important
enabler of—and barrier to—a successful agile
transformation. Leading agile change requires
leaders to shift their mindsets from authority to
collaboration, from scarcity to abundance, and from
certainty to discovery. These shifts can have
a big impact: for one CHRO, the shift from individual
to collective performance evaluation helped
the C-suite break down silos and shift to big
picture thinking.
How is the CHRO role changing? 4
 But the mindset shifts required to work in new and
Find more content like this on the
different ways must extend far beyond the executive
McKinsey Insights App
team—all the way down to the front line, in fact. One
CHRO we spoke with emphasized the critical role of
the quarterly business review process in transforming
organizational culture, especially the setting of
objectives and key results: “If you get the [quarterly
business review] process right, I think that it’s a real
key to help drive accountability.”
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Organizational Performance Practice. And check
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Articles referenced:
— “The organization of the future: Enabled by gen
AI, driven by people,” September 19, 2023,
Sandra Durth, Bryan Hancock, Dana Maor, and
Alex Sukharevsky
— “HR rewired: An end-to-end approach to
attracting and retaining top tech talent,” June
27, 2023, Vincent Bérubé, Dana Maor, Maria
Ocampo, and Alex Sukharevsky
— “Generative AI and the future of HR,” June 5,
2023, Bryan Hancock, Bill Schaninger, and
Lareina Yee
— “HR’s new operating model,” December 22,
2022, Sandra Durth, Neel Gandhi, Asmus Komm,
and Florian Pollner
— “Reimagining HR: Insights from people leaders,”
March 1, 2022, Laura Blumenfeld, Neel Gandhi,
Asmus Komm, and Florian Pollner
— “CHRO perspectives on leading agile change,”
August 30, 2021, Jason Inacio, Dávid Kincsem,
and Dániel Róna
— “‘Back to human’: Why HR leaders want to focus
on people again,” June 4, 2021, Talha Khan,
Asmus Komm, Dana Maor, and Florian Pollner
— “The new possible: How HR can help build the
organization of the future,” March 12, 2021,
Asmus Komm, Florian Pollner, Bill Schaninger,
and Surbhi Sikka

— “The economic potential of generative AI: The

next productivity frontier,” June 14, 2023,
Michael Chui, Eric Hazan, Roger Roberts, Alex
Singla, Kate Smaje, Alex Sukharevsky, Lareina
Yee, and Rodney Zemmel

Get to know and directly engage with senior McKinsey experts on

the CHRO role
Vincent Bérubé is a senior partner in McKinsey’s Montréal office, Dana Maor is a senior partner in the Tel
Aviv office, and Alex Sukharevsky is a senior partner in the London office.

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How is the CHRO role changing? 5