Admin workload preventing HR from contributing more strategically to business success: report

Human resources teams must learn to better use artificial intelligence (AI) and new technologies if they are to make a positive impact on organisations’ business success, according to a recent report.

Currently, HR professionals play an important role in driving the business forward in organisations, and business leaders are very much aware of this. Specifically, 65% of senior leaders see HR as a “key business enabler, driving transformation and value creation,” note the Boston Consulting Group (BCG) and the World Federation of People Management Associations (WFPMA).

However, more than half of leaders (51%) cite administrative workload as the primary barrier preventing HR from contributing more strategically.

HR has a vital role in modern business, according to a previous report.

AI adoption high, safeguards lag

Nearly 70% of respondents report using generative AI in some capacity, primarily in reporting, learning and recruiting, according to the BCG–WFPMA report based on a survey of more than 7,000 HR and business leaders across 115 markets and 25 industries. It assesses 28 people‑management topics by future importance and current capability to identify priorities for CHROs and their teams.

However, only 38% indicate high or strong relevance of generative AI for their organisation today, and just 50% expect agentic AI to have a high or transformational impact in future.

Data privacy and compliance issues are the most frequently cited obstacles to GenAI adoption, named by 51% of respondents as the greatest barrier. At the same time, 32% say their organisation has limited or no processes in place to measure the risk of GenAI use.

According to BCG, the shift from experimentation to scaled impact with AI “depends less on deploying AI (including agentic AI) into current work and more on reshaping processes and workstreams to generate greater value from the technology.”

The report says building the data infrastructure to connect HR and business systems end‑to‑end, and embedding technology across the full employee lifecycle, is emerging as a key priority for CHROs. It also highlights the need to equip both HR teams and the broader workforce with the skills required to work effectively with AI.

Digital HR ambition outpaces capability

Digital HR solutions – including process automation – recorded the largest jump in perceived future importance among the 28 topics assessed, rising 13 places to rank 12th, according to the BCG–WFPMA report. Even so, BCG notes that current capabilities in this area are among the lowest overall, underscoring a gap between digital ambition and execution.

“HR needs to move faster in terms of implementing digital technology, both within the HR function and driving the people elements of digital transformation across the business,” says Philipp Kolo, a BCG partner and co‑author of the report. “Moving from GenAI pilots to unlocking real and transformative value on the business side depends on focusing on areas including upskilling, adoption, and designing new ways of working. HR can make or break business performance in the AI era. CHROs must meet the moment to embrace what could—and should—be a golden era for HR.”

The survey also reveals a widening gap by company size. Large organisations place greater emphasis on, and report stronger capabilities in, data‑ and technology‑driven topics such as people analytics and the deployment of GenAI. Small and medium‑sized enterprises (SMEs) tend to lag on these dimensions but place relatively higher importance on culture, rewards and skills‑related topics, the report finds.

BCG says this pattern reflects different levers for creating a people advantage at scale versus in smaller organisations, and suggests that HR strategies will need to be tailored by size as well as sector and region.

A recent report notes that for HR leaders, compliance demands are expanding rapidly while governance and technology investments lag behind, according to a recent report.

Skills‑based talent management still in early stages

On skills, BCG and WFPMA say the transition from role‑based to skills‑based talent management remains at an early stage. About 54% of companies use skills‑based matching to align individuals with future roles based on their skill profiles and role requirements, and 48% run structured reskilling programmes. Only 11% of surveyed organisations have an enterprise‑wide skills architecture fully embedded through a formal skills taxonomy.

The report links investments in skills and workforce development to outcomes such as retention, speed to mastery and progress on strategic priorities. It argues that HR needs to play a more active role in orchestrating capability development at scale and outlines four “power moves” for the CHRO of the future: delivering business value through HR in partnership with the CEO; leading AI and digital transformation in HR and across the enterprise; building workforce and leadership capabilities; and anchoring these efforts with robust change management.

The report also presents case studies of companies that have put these priorities into practice, illustrating how CHROs and their teams have shifted “from a support function to a driver of transformation and outsized business value,” according to BCG.

“Ultimately, companies measure the success of the HR function by the value it creates for the business, not the volume of activity it delivers,” says Peck Kem Low, WFPMA president and a co‑author of the report. “The results of our survey make clear that HR's remit has expanded. CHROs and their teams are expected to be at the forefront to lead the workforce transformation and help leaders achieve their ambitious agendas, through fit‑for‑purpose people strategies and matching HR capabilities.”

The HR business has become far more complex over the past few years.