Human resources has firmly entered the strategic spotlight with 65% of senior leaders now viewing HR as a key business enabler, driving transformation and value creation. Organizations with stronger HR capabilities report lower turnover and cut the time to fill critical roles by roughly 17-18 days on average compared to peers. Leading CHROs are partnering directly with CEOs to steer enterprise strategy and support business leaders in execution to create outsized returns.

Yet the function faces a critical execution challenge. More than half of leaders (51%) cite administrative workload as the primary barrier preventing HR from contributing more strategically, and while AI adoption is widespread, measurable impact remains uneven.

These are among the findings from Creating People Advantage 2026: Four Power Moves for the CHRO, published today by Boston Consulting Group (BCG) and the World Federation of People Management Associations (WFPMA). The latest in a series spanning two decades, the report draws on survey responses from more than 7,000 HR and business leaders across 115 markets globally with data from 25 different industries. The report assesses 28 people-management topics by future importance and current capability to identify the biggest priorities for CHROs and their teams.

AI Adoption Is High—But Impact Lags

Nearly 70% of respondents report using generative AI in some capacity, primarily in reporting, learning, and recruiting. However, only 38% of respondents indicate high or strong relevance of generative AI (GenAI) for their organization today, and half (50%) of companies expect agentic AI to have high or transformational impact on their organizations in the future. The challenges of scaling AI remain significant, with 51% of respondents citing data privacy and compliance concerns as the greatest barriers to the introduction of GenAI, more than any other factor. However, 32% say their organization has limited or no processes in place to measure the risk of GenAI use.

The report asserts that shifting from exploration to at-scale implementation 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. Building the required data infrastructure to connect HR and business systems end to end to embed technology across the full employee lifecycle is also a key priority for CHROs, as is ensuring that teams within the HR function and across the entire enterprise have the skills and capabilities they need to succeed with AI.

Digital Ambition Is Rising Faster Than Capability

Among the 28 topics assessed, digital solutions (such as HR process automation) made the biggest jump in terms of future importance among respondents—improving 13 ranks to 12th—but the authors warn that they should be ranked even higher. Current capabilities in this area are among the lowest overall, underscoring the need for CHROs to act. HR leaders increasingly experience pressure to utilize digital to automate, deliver analytical insights, and offer a seamless employee experience. Rather than being an objective themselves, digital and AI are a means to an end for HR, streamlining workflows and helping teams support the business more efficiently and effectively.

“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,” said Philipp Kolo, a BCG partner and director and a coauthor 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 results also reveal a widening gap between digital ambition and execution in terms of company size. Large organizations place greater emphasis on, and demonstrate stronger capabilities in, data- and technology-driven topics such as people analytics and the deployment of GenAI, while small and medium-sized enterprises (SMEs) lag in these areas. By contrast, SMEs attach relatively higher importance to culture, rewards, and skills-related topics, reflecting different levers for creating a people advantage at a smaller scale.

The Skills Transformation Remains in Early Stages

When it comes to workforce renewal, companies have pushed over the last several years to revamp talent management around skills rather than roles. But progress is uneven, and many organizations face a persistent gap in execution. Only about half (54%) use skills-based matching (matching an individual to a future role based on the individual’s skill profiles and the requirements of the new position), and just 48% run structured reskilling programs. Overall, only 11% of the companies surveyed have fully embedded skills taxonomy across the enterprise.

Investments in skills and workforce development are tied to measurable outcomes such as retention, speed to mastery, and progress on strategic priorities. To best achieve these outcomes, the authors advise that HR must take a more active role in orchestrating capability development at scale and embrace the four power moves for the CHRO of the future:

• Delivering business value through HR; working in partnership with the CEO to align people strategy with the overall business strategy and goals
• Leading the AI and digital transformation; both in HR and across the overall enterprise
• Building workforce and leadership capabilities; evolving skills and capabilities in how companies assess and develop employees and leaders
• Anchoring the change; all of these initiative require a sold change-management approach

Regional Differences and Case Studies

The survey highlights regional differences in emphasis. While strategic workforce planning and people and HR strategy serve as universal anchors, priorities diverge across geographies, underscoring the need for globally aligned but locally tailored people agendas.

The report also includes examples of companies putting the priorities outlined in the report into action. The case studies illustrate that with the right approach, CHROs and their teams can evolve from a support function to a driver of transformation and outsized business value.

“Ultimately, companies measure the success of the HR function by the value it creates for the business, not the volume of activity it delivers,” said Peck Kem Low, WFPMA President and a coauthor 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.”

Download the publication here:
https://www.bcg.com/publications/2026/four-power-moves-for-the-chief-human-resources-officer