According to The Economist, American businesses employed about 1.3 million HR professionals in 2024, representing a massive 64% growth over ten years compared to just 14% overall employment growth. HR chiefs saw their compensation jump from 40% of average director pay in 1992 to 70% by 2022, with leaders like GM’s Mary Barra and executives at Dunkin’ Brands and Chanel moving from HR roles to CEO positions. The profession ballooned due to skilled labor shortages affecting 74% of companies, plus workplace disruptions from #MeToo, COVID-19 remote work shifts, and DEI initiatives. But now McKinsey data shows 22% of companies globally are reducing HR headcount due to AI, while only 5% are increasing it, marking a potential turning point for the people profession.
HR’s Perfect Storm
Look, HR didn’t get big by accident. They basically rode a wave of workplace chaos that started around 2017 and just kept coming. First it was #MeToo putting harassment in the spotlight. Then COVID hit and suddenly everyone needed HR to figure out remote work policies, employee safety, and mental health support. And just when things might have calmed down, DEI initiatives exploded across corporate America.
Here’s the thing about HR – it’s always been a profession that’s a bit insecure, constantly looking for the next big thing to justify its existence. All these disruptions gave HR departments plenty to work on, from micro-aggression training to figuring out non-gendered bathrooms. Companies were adding compliance staff to handle new state regulations about sick leave and minimum wages. Employees got more litigious too – discrimination allegations jumped from 6 to 15 per 1,000 workers between 2021 and 2023.
The AI Reckoning
But now the party might be ending. AI is coming for the HR professionals who thought they were immune to automation. We’re already seeing companies use AI to scan through thousands of resumes and handle basic employee questions through chatbots. Moderna even merged their HR and digital technology departments, which tells you everything about where this is heading.
The McKinsey survey is pretty damning – 22% of companies are cutting HR jobs because of AI, the highest of any business function. Only 5% are adding roles. That’s a huge reversal for a department that was growing nearly five times faster than overall employment. And honestly, can you blame companies? When you’ve got technology that can handle routine HR tasks more efficiently and at lower cost, the business case for massive HR departments starts to crumble.
Beyond the Hype
So what happens next? Well, the low-hanging fruit of resume screening and basic policy questions will definitely get automated. But the strategic HR work – talent development, organizational design, culture building – that’s harder to replace with algorithms. The problem is that not every HR professional is equipped for that higher-level work.
I think we’re going to see a bifurcation in HR careers. The administrative side will shrink dramatically, while the strategic business partner roles might actually become more valuable. Companies still need people who understand organizational psychology and can navigate complex human dynamics. But the days of HR departments growing unchecked? Those are probably over.
The real question is whether HR can adapt fast enough. They spent the last decade expanding their empire through compliance and initiatives. Now they need to prove they can deliver real business value in an AI-driven world. It’s going to be a brutal transition for many in the profession.
