With 61% of firms using genAI, CHROs face rising CEO pressure to cut costs

Chief human resources officers are facing intensified pressure from CEOs to deliver cost savings as organisations accelerate the adoption of generative AI, with 61% of firms now piloting or implementing the technology, according to new research presented by Gartner at its HR Symposium/Xpo in Sydney.

Gartner said HR leaders must prepare for a fundamental reshaping of work and workforce strategy as AI becomes embedded across business operations. The analyst firm noted that rapid AI uptake, combined with cost constraints and shifting executive expectations, will make 2026 one of the most challenging years for HR leaders in recent memory.

AI drives urgency across the C-suite

Aaron McEwan, vice president of advisory in Gartner’s HR practice, told attendees that executives increasingly view AI as a lever for efficiency. He said CEOs want clarity on how automation will lower structural costs, while CFOs are assessing whether AI can reduce HR headcount. Meanwhile, CHROs are under pressure to demonstrate how AI can absorb operational tasks so HR teams can focus on strategy.

Gartner projected that 50% of current HR tasks will be automated or handled by AI agents by 2030. Its surveys of 197 HR leaders in 2023 and 2025 show genAI adoption has surged from 19% to 61% in just two years, underscoring the pace at which HR functions must adapt.

Job redesign and redeployment accelerate

A separate Gartner survey of 114 HR leaders found that 27% of organisations have redefined roles due to AI in the past year, while 24% have redeployed employees to new positions as automation creates redundancies. Ten per cent reported replacing some jobs with AI outright.

McEwan said many CEOs were shifting investment from people to technology in an effort to lower costs, sometimes overestimating AI’s ability to replace human capability. He urged CHROs to help organisations rethink work design and define scenarios where human skills and AI tools complement one another.

To respond, Gartner recommended a “now–next” talent strategy that maximises current workforce performance over the next 12 months while planning for more profound changes as AI matures.

Balancing growth and efficiency

Gartner said 2026 will also test leaders’ ability to balance long-term growth ambitions with immediate cost controls. A July 2025 survey of 140 CHROs found that 64% believe their leaders lack the mindset to guide teams through continual change.

McEwan said organisations must treat change as a routine business process rather than an occasional disruption. He encouraged CHROs to equip leaders with core change skills and embed them into daily work to build organisational resilience.

The employment deal tilts further

The analyst firm also warned that the employment deal has shifted further toward higher demands on employees, including longer working hours, heavier workloads and reduced flexibility. A July 2025 survey of 222 CHROs found that only 47% believe their culture drives the performance needed to meet rising expectations.

McEwan said CHROs must respond by redesigning the employee value proposition to attract and retain the right talent, even as organisations increase their focus on productivity and transformation.

Gartner said the convergence of rapid AI adoption, rising cost pressure and declining employee support structures will force HR leaders to reset priorities in 2026. Those able to build AI-enabled operating models, clarify talent strategies and strengthen leadership capability will be best placed to navigate the shift.