With EOFY pressures mounting, CHROs who engage CFOs early are shielding their functions from blunt budget cuts
As end-of-financial-year pressures intensify and artificial intelligence reshapes workforce planning, chief human resources officers (CHROs) who fail to partner with their chief financial officers (CFOs) risk watching their budgets be cut without context – and their functions sidelined at the moment they matter most.
That is the warning from Robin Boomer, senior director in Gartner's HR Practice, who says that while cost optimisation has traditionally sat outside the HR remit, the rise of AI-driven workforce decisions has forced people leaders into the centre of the conversation – whether they are ready or not.
"HR is getting involved more and more," Boomer said. "I think they're still under-involved and often too late in the process."
The AI effect on workforce cost decisions
The catalyst for HR's growing role in cost optimisation is, in large part, AI. Business leaders across industries are increasingly asking how automation and AI tools can reduce operational expenditure – and that question has direct implications for workforce design and headcount.
"Lots of the thinking among business leaders is, well, this is a cost optimisation opportunity that will shift away from some of our workforce costs," Boomer said.
"And so, there's a lot of looking at how many people do we actually need to manage and continue delivering, especially our internal or corporate functions."
The organisations getting it right, he argues, are those bringing CHROs and CPOs into those discussions early – before decisions are made – rather than engaging HR only to execute a restructure that has already been signed off.
For HR leaders looking to understand the strategic workforce planning frameworks shaping this shift, that early seat at the table is the difference between influence and implementation.
EOFY as a forcing function
End of financial year is a critical moment for this partnership. Budget reviews, cost realignment exercises, and annual workforce planning cycles all converge at this time – and Boomer said HR leaders who are not aligned with finance going into that period are vulnerable.
Gartner's 2026 CHRO Leadership Perspectives Survey, which gathered input from more than 400 CHROs, found that optimising or reducing costs has moved ahead of increasing revenue as a top priority – the two have swapped positions compared to 2025. That shift signals that people leaders can no longer treat workforce investment as immune from financial scrutiny.
Boomer described a tiered model he uses with HR leaders to prioritise spending: from the non-negotiable (legal compliance, business continuity) through to medium-term capability investment, functional transformation, and what he frankly categorises as "vanity projects." The point, he said, is clarity.
"Make sure that we're funding the things that are necessary for our survival and health first," Boomer explained. "And then if we still have budget available and it's going to be worthwhile, sure, do some of that transformation agenda."
The practical application of this approach is one of the more pressing challenges facing CHROs heading into the second half of 2026 – and it is one reason why HR leaders need a seat at the strategy table before budget decisions are locked in, not after.
The CHRO–CFO relationship is undervalued
Despite the clear need for alignment, the CFO–CHRO partnership remains strikingly underdeveloped. Boomer cited Gartner data that only 20% of CFOs rank their CHRO among their top three executive relationships. At the same time, HR functions are squarely in the sights of cost-cutting initiatives.
"HR is third on the list behind marketing and IT," Boomer said. "34% of CFOs say that the HR function is one of their top three targets for budget reductions in the year ahead."
The solution, he argued, is straightforward – but requires CHROs to lean in, not wait to be invited. That means engaging finance leaders on budgeting methodology, asking how zero-based or driver-based budgeting approaches could sharpen HR's financial rigour, and taking shared ownership of strategic workforce planning – a process he describes as a persistent "hot potato" between finance and HR.
"Getting coordination between finance and HR – especially strategic workforce planning and HR business partner teams – to make sure finance and HR are working well together," Boomer said. "Operating like two great tastes that taste great together, instead of trying to vie for the attentions of our internal stakeholders, independent of one another."
For HR leaders navigating how to build a stronger CFO partnership going into budget season, the time to establish that relationship is not when the cuts are already being decided.
