Amid ongoing economic uncertainty and artificial intelligence-related changes, HR teams say they’re shifting their talent strategies to stay ahead, according to a June 25 report from DDI, a leadership company.
Half of CHROs ranked internal talent development as their top business priority, followed by building a high-performance culture. Hiring the right people into the organization has dropped to the bottom of the list, with only 33% calling it a priority right now.
Succession management remains key, with only 20% of HR leaders saying they have leaders ready to fill their critical business leadership roles. On average, internal candidates could fill only 49% of these positions immediately, they said.
“Leadership is becoming a tougher job each day, and CHROs are uniquely positioned to help leaders rise to the challenge,” said Tacy Byham, CEO of DDI. “While organizations can’t control the deluge of external challenges they face this year, strategic HR executives can build resilience by using trusted people analytics to forecast needs, build their bench and reinvigorate the next generation of leaders.”
In a survey of 2,185 HR pros, 86% said they anticipate their organization needing to develop new leadership skills and capabilities during the next five years. However, most HR leaders said measuring success was their biggest challenge when implementing leadership development programs.
Two-thirds of HR pros said their organization uses online learning libraries, which had the lowest ROI rating of any learning and development method. On the other hand, HR pros who use assessments to understand leaders’ strengths and development needs tended to report strong ROI.
DDI recommended structured and scalable succession systems, finding that successful internal promotions are 3.7 times more likely when leaders participate in cohort-based leadership development programs, 2.6 times more likely when leaders receive frequent coaching from managers and 1.6 times more likely when assessments are used to inform leadership selection.
“HR is under increased scrutiny to demonstrate ROI, as organizations navigate economic uncertainty, evolving talent needs and AI change management challenges,” said Stephanie Neal, director of DDI’s Center for Analytics and Behavioral Research. “CHROs are making a pivotal shift to develop talent capabilities within.”
HR pros may feel stuck in a Catch-22 when trying to identify and upskill top talent but training is lower on their organization’s priority list. Training as a top priority dropped from 12% in 2024 to 5% in 2025, according to HR Dive’s Identity of HR survey.
Skills-based strategies such as skills mapping and skills-based rewards programs can close talent gaps, according to a Mercer report. An increasing number of HR leaders said they’ve established a skills library, identified the most critical skills across departments and mapped skills to individual roles or employees.
