HR's Changing Role
In the latest episode of The Human Capitalist, host Trent Cotton delves into a pressing issue for HR professionals: the risk of being bypassed in organizational decision-making. While the fear of AI replacing jobs is prevalent, Cotton argues that the real threat to HR is being excluded from key strategic decisions. As Cotton points out, "I don't think the biggest threat to HR is getting fired by AI. I think it's much worse. Keep your job. Keep your title. You may even keep your seat at the table. But the biggest workforce decisions get made without you."> I don't think the biggest threat to HR is getting fired by AI. I think it's much worse. Keep your job. Keep your title. You may even keep your seat at the table. But the biggest workforce decisions get made without you. — Trent Cotton
The Monday.com Case Study
Cotton uses Monday.com as a case study to illustrate his point. Despite being profitable and experiencing growth, Monday.com cut 20% of its workforce to redesign the company for AI. The co-founders and co-CEOs stated that "improving margins was not the purpose of this decision. We intend to reinvest the vast majority of the savings in our people, our products, AI, and future growth."> Improving margins was not the purpose of this decision. We intend to reinvest the vast majority of the savings in our people, our products, AI, and future growth. — Trent Cotton This move highlights a shift in capital allocation from traditional workforce investment to AI and technology.
Organizational Design Over AI
Cotton emphasizes that the changes at Monday.com are less about AI and more about organizational design. "Look at what leadership says that they're building," he notes, referring to a flatter organization with fewer management layers.> Look at what leadership says that they're building. A flatter org, fewer management layers, more autonomous teams, broader ownership. — Trent Cotton This restructuring reflects a shift in how companies are approaching growth and efficiency, focusing on autonomous teams and broader ownership rather than expanding headcount.
Staying Relevant in the Age of AI
To remain relevant, Cotton suggests HR professionals adopt various mindsets, such as the architect and scientist mindsets. These involve questioning old assumptions about workforce planning and exploring new organizational models. "If your 2027 workforce plan is still revenue times a historical headcount ratio, I bet your CFO is already asking a different set of questions,"> If your 2027 workforce plan is still revenue times a historical headcount ratio, I bet your CFO is already asking a different set of questions. — Trent Cotton warns Cotton. By embracing these new approaches, HR can maintain its role in shaping the future of organizations.
Strategies for HR Professionals
Cotton offers practical advice for HR leaders to stay in the room where decisions are made. He emphasizes the importance of understanding which jobs will change due to AI, identifying areas where output can grow without increasing headcount, and recognizing where human judgment is indispensable. Finally, he advises HR to critically evaluate AI and automation risks, ensuring decisions are backed by evidence, not merely opinion.
Through these insights, Cotton cautions that HR's future isn't about defending its seat but about actively designing the organization's future. "Someone needs to answer those questions. Someone needs to be the architect of that organization. Someone needs to be the scientist who stress tests the old assumptions,"> Someone needs to answer those questions. Someone needs to be the architect of that organization. Someone needs to be the scientist who stress tests the old assumptions. — Trent Cotton he concludes.
