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Insights from EY's CHRO 2030 Market Insights Report

Recently, EY published its global survey report, CHRO 2030 Market Insights, which highlights the anticipated evolution of HR departments and the strategic role of Chief Human Resource Officers (CHROs) over the next five years. This report is based on interviews with over 160 CHROs from leading companies across 26 countries and 15 industries, including Japan.

According to the findings, a significant 85% of responding companies believe that a strategic HR function will be crucial for success within the next five years. However, 89% of those surveyed also feel that a radical transformation of HR departments is necessary to respond to changing business needs. Alarming is the fact that only 32% of companies have established a talent advantage, achieving higher outcomes in both business and talent aspects. This highlights the urgent need for HR departments to transition from traditional administrative roles to strategic partners that contribute directly to business goals. In the future, HR must not only respond to changes but also lead innovative workplace creation that generates new value.

Commentary from Shinichiro Uzawa, Leader of EY Japan's People Consulting

Shinichiro Uzawa commented, "Through focused interviews with top HR leaders globally, this report organizes the challenges and potential solutions regarding the future landscape of HR departments. About 10% of the total responses came from Japan, leading me to believe that our insights are highly relevant in the Japanese market. The HR function must now engage more directly with business strategies and heavily employ the latest technologies like AI, shifting towards roles emphasizing problem-solving such as HR business partners (HRBPs). Ultimately, this transformation will position HR as a key driver of cultural change. We are committed to supporting companies in addressing these challenges, backed by our team of 300 professionals in Japan and 8,000 worldwide."

Evolution of the HR Function

The HR sector is currently at a significant turning point, demanding rapid evolution to meet new expectations and create greater value and results. The integration of generative AI presents opportunities for HR departments to facilitate new business value, promote financial cost reductions, and enhance employee experiences.

Anticipated Tasks Managed by Generative AI by 2030

Furthermore, there is an urgency to fundamentally redefine HRBPs' roles. CHROs are expected to bring new value to organizations, necessitating precise prioritization of strategic agendas, proactive adoption and implementation of highly responsive technologies, and redefinition of the concepts of “work” and “talent” from a business viewpoint. Additionally, CHROs must not only lead transformations but also reinforce organizational capabilities encompassing business, technology, and human aspects, which are crucial for generating business value.

Workforce Evolution

By 2030, a global talent shortage exceeding 85 million is projected. Companies will be compelled to reassess their talent strategies and management practices fundamentally. However, few enterprises have established the framework to respond effectively to these shifting expectations, and the pool of talent possessing the required skills is limited. To navigate this inflection point in the workforce, companies must concentrate on four key areas.

For further details on the EY CHRO 2030 Market Insights, please visit EY CHRO 2030 Market Insights.

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