The new battle for control of the workforce as HR cedes ground to its C-suite peers

Ruth Umoh here, luckNext to the main editor. For decades, HR professionals have been denied their “seat at the table” in company leadership. But during the COVID-19 pandemic, it has become abundantly clear that senior executives can no longer ignore their chief people officers, who have led companies through existential business challenges, including lockdowns, remote work, and major resignations. Now a quieter, more structural transformation is underway. The seat remains, but the power associated with it moves elsewhere.

Across the Fortune 500, HR is reaching an inflection point that looks strikingly similar to the one marketing faced in the late 2000s. As digital tools made it possible to measure ROI at a granular level, brands lost their footing in performance metrics, and CMOs who couldn’t quantitatively measure impact saw budgets shift toward finance and analytics. HR is now facing its own version of that moment. As AI-driven job redesigns, labor scarcity, and rising capital costs collide, companies are becoming less interested in culture as a value and more interested in business as an investment.

The result is a shift in who holds strategic power. As workforce strategy becomes a matter of cost, production and automation rather than engagement and belonging, finance, operations and technology leaders are increasingly setting the agenda. This can leave HR to implement decisions that no longer fully shape it.

It’s already begun: CTOs are effectively rewriting job descriptions by defining workflows that can be automated. Operations leaders source work through professional services firms, freelance and talent platforms, outsourced delivery centers, and automation software. CFOs reinforce this dynamic by treating labor as a variable investment to improve performance, rather than a fixed cost, and applying an ROI system to talent spending as much as they do on research and development or infrastructure.

At the same time, AI is absorbing parts of the HR function. Recruiting, screening, scheduling, learning paths and even performance management are increasingly handled by software, diminishing the impact of not only HR but the function itself.

This shift is as much cultural as it is practical: HR tools and training emphasize culture, development and capacity building, while finance and operations are more likely to speak in terms of margins, financial models and forecasts about how workforce decisions will impact company performance and profitability. The fundamental workforce question is no longer how to find people, but how to solve a business problem using the optimal mix of humans and automation.

The next generation of chief people officers may need to look less like sociologists and more like workforce economists.

Ruth Umoh
Next to the main editor
ruth.umoh@fortune.com

Around the table

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