In this episode of Reimagining Company Culture, we sat down with Lars Schmidt, founder of Redefining HR Accelerator and one of the sharpest voices in modern People leadership. Lars has spent more than two decades working across every layer of the HR function, and his take on where HR is heading is both optimistic and practical. He is not interested in the next buzzword. He is interested in what the best People leaders are quietly doing differently from their peers.
What Lars keeps coming back to is that HR is undergoing a real structural shift. The function is being asked to deliver on compliance, culture, data, and business strategy at the same time, with smaller teams and faster cycles than the generation before. That combination makes the old HR operating model insufficient. The question is what takes its place.
What a Modern HR Function Looks Like
A modern HR function is one that treats People work as part of the business operating model rather than as a support function sitting next to it. That looks like HR leaders in business reviews, data flowing between People systems and business systems, and decisions about headcount, pay, and culture being made with the same rigor as decisions about product or go-to-market.
Gallup's State of the Global Workplace data underscores why the shift matters. With engagement at an 11-year low in the US, the old model of running a single annual survey and reporting results once a year does not give the business what it needs. Modern HR runs continuous signal, and it does so alongside a stronger investment in the case work that sits under the hood.
The function also looks different in how it hires and develops its own team. HR leaders with backgrounds in operations, product, and analytics are increasingly common, and their contributions are visible in the quality of programs and the sophistication of measurement.
How Modern HR Actually Operates
How does a modern HR function use data?
It treats data as a live input, not a periodic report. Engagement survey movement, turnover rate by team, case pattern analysis, and pay equity checks are reviewed monthly, not quarterly. That frequency changes the conversation from retrospective to anticipatory.
Where does ER fit in the modern HR operating model?
ER moves from being a reactive function to a diagnostic one. The case data becomes part of the standard business review, and ER leaders sit alongside their talent and DEI peers rather than underneath them. Strong case management systems make this possible by giving ER leaders the analytic tooling their peers already have.
Lars also made a sharp observation about how much of the HR function's effectiveness depends on protected time for its leaders. CHROs who spend every day in reactive meetings produce reactive decisions. CHROs who build protected blocks for strategic work, team development, and data review produce different outcomes. This is a scheduling problem, which sounds small, but it has outsized impact on how well the function runs.
It is also a modeling problem. The way a CHRO spends their week signals to the whole HR organization what is actually important. If the CHRO never makes time for data review, no one else in the function will either.
The same point applies to relationships across the executive team. Modern HR leaders spend real time with the CFO, the COO, and the product leader, not just in meetings but in unscheduled hallway conversations. Those relationships shape how HR decisions land inside the business, and they are a core part of what makes the CHRO role work.
What Actually Works in Modern HR
Principle 1: Invest in the operating rhythm before the programs
Most HR functions over-invest in programs and under-invest in the meetings, reports, and review cycles that keep the function running. Modern HR flips that. The rhythm comes first, and the programs fit inside it.
Principle 2: Build the team to match the work
A modern HR team has more diversity of background than the traditional model. Analysts, operations people, former lawyers, and former line managers all bring useful perspectives. A team made up entirely of career HR generalists will usually struggle with the work the function is now asked to do.
Principle 3: Treat the CHRO role as a business leadership role
The best CHROs spend as much time talking about revenue, cost, and customer outcomes as they do about HR metrics. Not because HR metrics are unimportant, but because connecting the two is what gives HR real effective inside the business.
Where Employee Relations Fits
ER is often the most undervalued part of a modern HR function. Investigations, case management, and sensitive-issue handling are where the organization either demonstrates its values or contradicts them. Modern HR leaders are investing heavily in ER operating models and structured investigation workflows because the risk and the reward are both higher than the old model recognized.
ER drill-down: ER metrics in executive reviews
The test of whether ER is properly integrated is whether the function's metrics show up in monthly executive reviews. Case volume, time to resolution, repeat issues by team, and the correlation between ER patterns and engagement data are all reasonable candidates. Modern HR leaders are building these dashboards explicitly, not waiting for an issue to force the conversation.
Frequently Asked Questions About Modern HR
Is modern HR the same as strategic HR?
Related but not identical. Strategic HR is a term that has been around for decades and tends to describe a posture. Modern HR is an operating model. The posture alone is not enough if the rhythm, the team composition, and the tooling have not changed.
How does modern HR handle AI and automation?Pragmatically. The best HR teams are using AI for document drafting, case triage support, and pattern detection, while keeping humans in the loop for judgment calls. They are also thinking carefully about the ethics and the bias risks of AI-assisted HR decisions.Does modern HR require more headcount?Not necessarily. It usually requires different roles and more invested tooling, but the net headcount can stay similar. Efficiency gains from better tooling offset the specialist roles the function now needs.Is modern HR a good fit for regulated industries?
Is modern HR a good fit for regulated industries?
Yes. Regulated industries often have stronger operating rhythms already, and modern HR builds on that foundation. The hardest lift in regulated industries is usually cultural, not structural.
How do you start modernizing an HR function?Start with the operating rhythm. Add two or three data points to the monthly executive review, and build the discipline of reviewing them together. Once the rhythm is in place, everything else follows more easily.
Additional research from Deloitte's work on modern HR and leadership reinforces the point that the HR function is shifting from a compliance posture to a strategic capability, and leaders who make that shift deliberately end up with more lift teams.
The Bottom Line for HR Leaders
Lars's view, distilled, is that the HR function is in the middle of a structural shift, and the leaders who are doing well are the ones who see it clearly and adjust their operating model to match. The shift is not optional. The question is whether a specific HR function adjusts early enough to do it well, or waits until the gap between what the business needs and what HR delivers becomes untenable.
The good news is that the path is clear. Stronger operating rhythms, better tooling, more diverse team composition, and a CHRO who treats the role as a business leadership role. Each of those moves is achievable. Done together, they give HR a foundation that matches the complexity of the modern workforce.
There is real work involved, and it is not the kind of work that produces a flashy quarterly result. It is the kind of work that produces a function the business trusts in year three, and that is worth far more than any single campaign.
See how AllVoices helps modern HR teams build a connected operating model.
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