AI, Middle Managers, and the New HR Mandate with Brian Kropp

What if the biggest AI disruption isn’t at the entry level, but right in the middle of your org chart? Bill Banham sits down with Brian Kropp, VP of Global Insights at Heidrick and Struggles, to explore why the winners are treating AI as a people and change problem, not a tech project—and how that shift rewrites HR’s mandate.

We start with speed. Startups jump from idea to pilot in 30 days; large enterprises often take 270. Training alone won’t fix that gap. Brian lays out a concrete path: give teams specific tasks and roles to experiment with, shrink approvals, and track learning as a real return. He makes a sharp case for “R before ROI,” arguing that early value shows up as capability, not neat cost savings, and that CHROs should design experiments that surface where returns exist before scaling investment.

Then we tackle the middle manager shakeup. Scheduling, approvals, status updates, and first-line coaching are ripe for automation or AI agents. That could remove 30 to 50 percent of a manager’s workload, forcing a choice: fewer managers or a redesigned role focused on judgment, sensemaking, escalation, and culture. Brian Kropp warns that without a plan, finance will default to cuts that hurt long-term capacity. He also maps where job evolution is most visible—from call centers and finance ops to diagnostic work—and why liberal arts and market insight skills may surge as tech meets cultural change to create breakthrough opportunities.

The conversation closes with two pivotal moves: setting an explicit formula to split AI savings between margin and reinvestment in people, and standing up a new role—VP of AI Workforce Transformation. This team would own task design for automation vs augmentation, agent selection and “performance management,” and the operating system for fast, safe experimentation at scale. If you’re a CHRO, HR leader, or curious operator, this is a pragmatic playbook for turning demos into durable advantage.

Chapters

• 0:00 Welcome And Guest Introduction
• 1:12 AI Adoption Is A Change Problem
• 3:44 Beyond Encouragement: Direct Experiments
• 6:15 R Before ROI And Learning Returns
• 7:36 The Middle Manager Shakeup
• 10:55 Signals On Roles Evolving And Emerging
• 14:33 Rough Transition And Reskilling Economics
• 18:22 New HR Role: VP Of AI Workforce Transformation
• 25:46 How To Connect And Further Resources
• 26:50 Closing And Subscription Reminder

Transcript

SPEAKER_00: 0:02

Welcome to the HR Chat Show, one of the world's most downloaded and shared podcasts designed for HR pros, talent execs, tech enthusiasts, and business leaders. For hundreds more episodes and what's new in the world of work, subscribe to the show, follow us on social media, and visit hrgazette.com.

SPEAKER_03: 0:26

Welcome to another episode of the HR Chat Show. Hello, listeners. This is your host today, Bill Bannham. And in this episode, I'm joined by one of the most influential thinkers in the world of people, strategy, and organizational transformation, and a jolly nice chap, my friend Brian Krop, Vice President of Global Insights over at Hydric and Struggles. Brian leads global research initiatives that provide chief human resource officers with the insights that they need to elevate personal and functional effectiveness, drive commercial outcomes, and build data-driven HR practices. Brian's work spans market intelligence, future work trends, and the rapidly shifting landscape of AI adoption inside modern organizations. And in this particular conversation, we're going to explore how AI is reshaping HR's mandate, how leaders can truly design AI-enabled workforces, and what most companies are still missing as they try to navigate this new era. Brian, how are you doing? Welcome back to the show.

SPEAKER_01: 1:33

It's great to talk with you again. Really uh looking forward to the conversation, and thanks for having me.

SPEAKER_03: 1:38

It's been too long, so I'm glad to get you back. Uh let's get straight into it then. When you when you look across the organizations that you work with, Brian, what what do the most successful CHROs understand about AI adoption that others perhaps don't?

SPEAKER_01: 1:53

Yeah, the there's uh several things um that the the ones that are most successful that are understanding uh and thinking about differently. The first one is uh they realize that it is not a um technology problem. It's a talent management and change management problem. The reality is that the AI technology that exists is uh incredibly robust. There's all sorts of amazing things that can be done with it. Uh but the reason why the impact feels slow right now is not because the technology is not good enough, it's because the talent management, change management challenges associated with driving that adoption are not being focused on smartly enough, strongly enough in the right ways. Like, for example, one of the things that we hear from a lot of organizations is that their strategy to drive AI adoption, their talent management strategy, is we're just gonna encourage people to use it. We're gonna buy the tools, give them the app, uh, whatever it might be, and we're just gonna say, explore, try, experiment. The problem with all of that is employees don't know how to use the tools, where to try, where to experiment, what sort of direction. So the best heads of HR as they're thinking about this are not just encouraging, they're really approaching it as a change management problem and challenge with direction, guidance, focus, where to experiment, how to experiment, when to experiment, and so on. But that is at the highest level, the fundamental difference that the smartest heads of HR are seeing when it comes to AI adoption.

SPEAKER_02: 3:28

Thanks for listening to this episode of the HR Chat Podcast. If you enjoy the audio content we produce, you'll love our articles on the HR Gazette. Learn more at hrgazette.com. And now back to the show.

SPEAKER_03: 3:44

Okay, love it. Thank you very much. So there's a perception that HR's role in AI adoption is mainly training and employee encouragement. What should HR's strategic role actually be?

SPEAKER_01: 3:58

Yeah, you know, that there's um this really interesting uh reality when it comes to AI adoption, which is if you're the head of an head of HR at a large company, uh you're probably going too slow right now. Uh and I'll just give you a little bit of data to give you a sense of that. There's a study that came out from MIT uh Nanda uh a couple of months ago. And what it essentially found, and this is not going to be exactly right, but it's it's directionally right, um, small companies go fast, large companies go slow. So to put a look a little bit of uh data around that. For a startup, it takes about 30 days to go from AI ideation to a pilot. Small companies, it's about 90 days, large companies, it's about 270 days. So everybody's really focused on this question of are we getting ROI? Are we really getting the return that we expect? Uh, and so on. And yes, those are important questions. But strategically, the more important question is how do you experiment faster, especially if you're the head of HR or a large company. And so your role strategically, the first part of it is how do you just accelerate experimentation? How do you go quickly? Because if you're not experimenting quickly, your small, more nimble competitors are beating you in the marketplace, for sure. Now, why is it so hard to experiment? Why is it so slow? It's one, we don't provide direction for employees about where to experiment. We're often too worried about the systems and processes that are associated with that. Uh, we uh have too many approvals, our organizations are too big, we've got too much risk compliance in place. And those things are good in a lot of ways, but they're at odds with the ability to go fast. So strategically, the first thing that you need to be thinking about as a head of HR is not just do you provide the training and the encouragement, but how do you make it go fast? The way that you make it go fast is to provide very specific direction on where to experiment these types of tasks, these types of roles, these types of activities. And that's one of the first most important things. Second thing strategically is ROI in most business situations is absolutely an incredibly important business metric to keep track of. And no reasonable person would disagree with that. However, we're at a point now where we really don't know what the investments are, we really don't know what the returns are. So if we're holding ourselves to an ROI measure at this point in time, we're never going to go forward because most of these investments have a zero ROI or negative ROI at this point in time, because we just don't know. So instead, strategically, what you need to be thinking about from these experiments is identify where there's a return to begin with. Where can we make a difference? Once we've identified where there's a return, then we can figure out the right degree of investment to build on that return, to scale that return, or perhaps the investment's too large to actually take advantage of that return. But we need to figure out where there's an R before we worry about where there's an ROI. And the other part of that strategically, which is really important, most of the R initially is gonna come from learning, not cost savings, efficiency, new product launches. But it's gonna come from returns through learning, then it'll come from returns where that learning enables cost savings, new product launches, et cetera. But that's another important strategic thing to keep in mind. We've got to have a measure of the learning from an HR perspective, not just the cost savings that are associated with it.

SPEAKER_03: 7:35

AI's impact, Brian, on entry-level roles gets all the headlines. Um, and rightfully so. Um, but instead, I'd kind of like to understand from you what where do you predict the biggest changes across mid-level and senior roles?

SPEAKER_01: 7:54

This is uh one of the biggest misses that I think HR executives have when it comes to AI's impact on the organization structure. Um, rightly so, a lot of entry-level tasks are being automated away. Well, I shouldn't say rightly so, that's not the right way to frame it. Uh it is true that a lot of entry-level tasks are being automated away uh by AI. And that's because that's where these tools make the most sense. Repeated tasks where there's a clear right or wrong answer. And in terms of driving organizational productivity, we would expect that to occur. And that has a lot of implications about do we need as many entry-level employees or not? Uh, what is the career progression of those entry-level employees or not? And those are really hard, difficult questions. But most HR executives know that is happening. The place where a lot of HR executives are missing is how AI is going to actually disrupt middle management. And let me take that apart a little bit. When you look at a lot of the tasks that managers have, they fall into a couple of buckets. One bucket is uh the tasks of just management. So approving expense reports, uh setting up schedules, uh uh, allocating tasks to different people. Those all fall into the same repeated, clear yes or no right answers, things that AI could do faster. So one chunk of a middle manager's job can easily be automated away through AI tools. So it's kind of first thought. Second thought, uh, there's a lot of new AI agents that are starting to emerge that can provide more effective coaching for employees. So if you've got uh well-documented jobs on how to do particular tasks and you're an employee that's doing that task, pretty soon they're gonna be able to go to an AI agent that gives them advice on how to do those tasks rather than their manager. So a lot of that initial coaching, feedback, development can be done by an AI agent rather than the manager. Uh, third thing. What do middle managers do a lot? They're the conduit of information from the top of the organization to the bottom and the bottom back up to the top. What is AI really good at? Tracking data flows and information flows, creating dashboards on systems, processes, that sort of stuff. So you look at three of the major things that middle managers do: automatable tasks via scheduling and so on, AI agents starting to take over some of their ability to provide feedback and direction. Then three, the management of the flow of information across the organization, AI can do that better. At the extreme, it's not unreasonable to think that 40%, maybe 50%, maybe even higher of what a middle manager does today can be significantly automated or augmented via AI. So do some back the envelope math. Maybe 30% of what a manager does, maybe 40% of what a middle manager does can be replaced by AI. So that begs a really important question for you as the head of HR. What do you want your middle managers to do? At one end of the continuum, there is this question of could you get by with 30% fewer middle managers? I mean, maybe. Or do you want those middle managers to be doing different things? If you're not going into those conversations with a clear point of view on what you want, the CFO and the public markets are going to push you to have 30% fewer managers. That's just kind of the reality of things. Um, because that in the short term, financially, is probably a better answer, but not necessarily in the medium to longer term. So where HR executives really should be focusing is not just on the impact of AI on entry-level jobs, how many need, what are the skill sets look like, which is a very real thing. But also, how does it change the shape of the pyramid of your organization? And what does the role of middle management look like in an AI-enabled workforce when AI is driving schedules, AI is providing feedback to entry-level employees, and AI is controlling the flow of information. I don't know the answer to that, but I know that's a spot where most AHR executives are not even thinking about when it comes to how AI is going to shape the organization.

SPEAKER_03: 12:19

Okay, so uh kind of as a follow-up then from uh and I'm I'm hoping that you can give me some kind of answer to this um because it's 2026 now. We're recording this episode in early 2026. Uh, I feel like in 2022, three, four, five, it was okay when people didn't know. But um uh I think at this point I'm I'm looking for hard answers this year. From a from a research standpoint, Brian, what what signals are you seeing that indicate which jobs will evolve? I mean, we just spoke there about that 30% for for middle managers and and how those roles will evolve, uh, which will disappear. You said, you know, if it's if it's just a cost-saving piece, then the chances are 30% of folks will go. So we maybe don't want that to happen. And and and which entirely new roles will emerge. People have haven't been able to tell me about these new roles, but it's 2026. I bet you've got a grip on it. What's your take?

SPEAKER_01: 13:10

Yeah, uh, so the the uh the roles across organizations, it's pretty easy to identify which types of roles. So repeatable, augmentable tasks, clear right or wrong answer, all those sorts of things. So where we're seeing a lot of it is uh call center, uh we're starting to see more of it in finance, we're starting to see more of it uh even at uh uh entry-level HR roles, pretty much every function, any role that has repeatable tasks that have a clear yes or no right answer, that uh is going down the path of automation. But there's also a set of other jobs that are becoming really interesting where um uh AI is impacting things. So a couple of examples. One, uh doctors reading x-rays. Uh when you think about x-rays uh across the globe, there are millions, if not billions, of x-rays that are done and that we have information on. We also know with all of those patients whether or not they ended up having cancer or some other treatment based upon those early x-rays. So places where there's a large volume of information, where there's again clear yes or no answers, even if it's not within your organization, but across organizations, uh places where we're also going to start to see AI impacting things. I'll tell you where I believe uh there will be new opportunities that are created from AI. And this is a really important thought process that I think HR executives should go through. The way that the conversation emerges with a lot of executives is some version of, well, we see how Uber changed the world. We're AI is going to do something like that. And yes, that's true. And so what they say is um, well, we need to make the technology investment so we can have our Uber-like moment that dramatically changes what the world looks like. Uh but when you take a step back and say, well, why was Uber and everything that's associated with that? So Uber lift kind of that whole evolution, why did it occur? Uh it's not actually because of technology. There's a couple of other things that were going on. One, uh culturally, we became much more comfortable with the idea of a shared economy. Uh, two, uh, we had a lot of idle capacity of cars that just weren't being used on an ongoing basis. Three, technology emerged uh that gave us connectivity, uh, always on where we could find people in the moment. Uh, and then uh four, there was a clear pain point where it sucked having to wait for a taxi. So, what I would actually say is that the companies that are starting to see the opportunity to have breakthrough performance, new opportunities that emerge, not just cost-saving things, are ones that are asking a question, which is um what culturally is changing right now? What are people becoming more comfortable with or changing their comfort level from a culture perspective? Uh, two, where is there inefficiencies in the market? Uh, so people waiting a long time to get a taxi. Uh where is um uh technology also changing on those fronts? But if you're approaching it as a technology problem, not a societal problem, a cultural problem, looking at those evolutions, you're gonna miss where the big breakthrough opportunities are. So for me, that begs the question like, well, who's good at that sort of stuff? And I'll pose a counterintuitive idea. With all of the focus on technology opportunities, with all of the focus on AI investments from a technology perspective, what you actually need is some set of people with liberal arts backgrounds who understand people, human beings, cultural issues, because to create the breakthrough opportunities, it's gonna be the technology plus the cultural change, technology plus the societal changes. And if you don't have people thinking about that societal point of view, then you're gonna miss out on what that looks like. So as I think about the jobs that are likely to change the most, or most likely to be in demand, and this is kind of rolling the clock ahead a couple of years. Uh, it's not gonna be entry-level jobs of people that do coding, because there's gonna be lots of people that code technology is gonna be able to do that. Uh, middle management is likely to shrink to some degree. But the things that are likely to grow are the subject matter experts that really understand cultural, societal, market opportunities around things. And that relative to where we've been for the last 10 years, might be people with more creative backgrounds, more liberal arts backgrounds, more understanding the flow of human beings as they interact with each other in the real world. So that's where I think we're gonna see opportunity and career growth. And it's probably a little bit counterintuitive because everyone for the last 20 years has been saying, you know, code, AI, tech jobs, that's gonna be the future. But I'll I'll share with you uh something that was really interesting. I was talking to the dean of a business school uh the other day, a top business school, and what they actually are saying is that the um uh the people that are coming out with computer science degrees are having some of the hardest times finding jobs right now because AI is taking over those entry-level coding roles. And the the belief that you just get a good degree in computer science and that's gonna be your ticket forward, um, maybe, maybe not, but it's not as certain as it was before.

SPEAKER_03: 18:36

Okay, very interesting. Thank you. Um hope for hope for all those folks out there who've been studying social sciences or uh organizational psychology, uh similar sort of disciplines to that, but it sounds a bit. Um sounds a bit bleak though, for other types of folks looking to get into get into a career, entry-level jobs. Sounds potentially a little bit bleak for large proportions of middle managers based on what you say. I'll be basically heading to this idea that um nobody will work. Um, and if you have a job, uh it's it's basically a hobby and we'll be getting we'll be getting subsidies from the government or something within 10 years. What's your take on that?

SPEAKER_01: 19:15

Yeah, you know, um uh any previous technological change, it's really easy to spot uh the things all be negatively impacted. Um so when you think about uh uh you know the globalization that occurred of roles in the early uh 2000s, it was really easy to point out like, well, there's other places that um uh can do that more cost effectively. Uh when you think about some of the dot com stuff, it was really easy to point out you know what roles that are impacted uh negatively. Exact same here. What is really hard to see is what are the new opportunities that will emerge. And uh because we don't know what those new opportunities are, uh I tend to fall into the camp. That across the next couple of years, we're going to see AI impacting organizations and employees from a cost savings perspective. Because it's easy to spot the returns. You can work through them and figure them out. At the same time, we're going to start to see new ideas emerging. We're just not there yet. So the next two to three years, I think it's likely to be a rough transition period because it's going to be really easy to spot where negatives occur, but we haven't gone far enough along to see where opportunities emerge. I tend to be optimistic in that human beings will figure it out, but the transition periods are always rough. And we're entering that transition period. Now, how do you get through that transition period faster as an organization, as a society? I think there's a really important question that heads of HR, and a really important conversation that heads of HR need to be having with their CFOs. The conversation needs to happen within companies around for every dollar of cost savings we create, every euro of cost savings we create, what is the distribution of that cost savings? How much of that goes to reskilling our employees versus how much of it goes to the bottom line to drive margin? Again, if you as an HR executive are not having that conversation about what that distribution looks like, the and the natural momentum of a company is going to force it to the bottom line. Because the conversation is going to be, well, we're able to pull this out, that's good, let's not put it back into the company. But here's the other thing to be thinking about. If you want employees to figure out what these new opportunities are, if you want them to come up with that next big idea, they have to see some of the value and benefit in it for themselves. Now, that value of some of those savings rolling back into them for uh for training purposes, new development purposes, uh some sort of compensation reward for it, whatever it may be. The more that can go back to benefit employees, the more likely they are to feel like they're part of the transformation and evolution to whatever's next. And if employees feel like they're benefiting from the evolution, they're much more likely to be part of the evolution than not. And so you as an HR executive have to sit down with your CFO, with the CEO, with the board, and get to some sort of agreement that's the right answer for you as to what percent of the savings that emerge go back into reinvestment in the workforce versus what percent go back to the bottom line of the organization? I'm not going to say that there's a right answer to that. Different organizations are going to get to different spots on that continuum. But where there is a right answer is that you, as the head of HR, have to have that conversation with the senior leaders at your company to have a point of view on it before any of this really flows through companies.

SPEAKER_03: 23:13

Do we think that the HR leaders will still be relevant in a few years, Brian? Or are they on the uh are they on the shopping board as well?

SPEAKER_01: 23:22

Uh uh I think they're only gonna become more relevant because this question of um what is human and what's not uh will become more important as we identify what parts of a job should be automated, what is the role of those middle managers whose more their tasks are gonna be automated? But what I'll also say is that there's gonna be um, I believe, a new role that's gonna emerge within the HR function, perhaps in a team within that HR function, which is uh who does talent management for the AI agents that we have in our workforce? How do we know which tasks should be uh automated? How do we know which ones should be augmented? How do we know that when the AI agents that uh that we should be hiring, because they can do something more effectively than other parts of our workforce can? How do we know when to uh performance manage them, those agents out of the organization because they're inaccurate, they create hallucinations, they're no longer effective for whatever it may be. I believe there's gonna be a new role that emerges in the HR function, which is the VP of AI workforce transformation. Because right now that's parts of lots of people's different jobs, and frankly, we're getting suboptimal answers as a company. If we want to go faster, get a better return, embed the learning that we're getting to then figure out what are these next big breakthroughs that we're gonna create, we need a VP of AI workforce transformation at most companies. And I think that is someone who sits at the intersection of understanding the technology and understanding people. Uh, but whoever has that skill set and can bring that skill set to the table, boy, they're gonna be in demand. And if you've got that skill set, I would be talking to your head of HR about this new role that needs to emerge, which is you know, VP of AI workforce transformation or kind of whatever you want to call it, but that is understanding where humans and AI agents work together and is responsible for the talent management aspects of supporting our AI agents.

SPEAKER_03: 25:26

I have so many more questions for you, Mr. Krop, but we're out of time. So just one more before we do wrap up.

SPEAKER_01: 25:35

And it's gonna happen faster than than we might expect.

SPEAKER_03: 25:39

I'll have to get you back on soon and uh do a bit of a follow-up with you. But just for today, before we wrap up, how can our listeners connect with you? So LinkedIn, email, TikTok, Instagram, whatever you want to share there. And of course, how can folks learn more about hydric and struggles?

SPEAKER_01: 25:54

Uh, best way uh to connect with me directly is just via LinkedIn. Send me a message directly. They're more than willing to chat. And uh hopefully, as you can tell, these are some of the most exciting, challenging, interesting times that HR executives are ever going to face. Uh, we've got a ton of thought leadership up on hydricandstruggles.com. Always go there. There's a tab that'll say uh research and insights, and you can check out all the stuff we work on for uh uh HR executives and COs and board members that really care about these talent issues.

SPEAKER_03: 26:19

Wonderful. Well, um Brian Crop, let's not leave it so long until I get you back on the next time. I feel like uh, well, uh the next couple of years are kind of critical, so perhaps we need to get a regular slot with you uh to monitor the changes. Um but for today, thank you very much for joining me back on the show.

SPEAKER_01: 26:38

Talk to you soon, my friend.

SPEAKER_03: 26:40

And listeners, as always, until next time, happy working.

SPEAKER_00: 26:46

Thanks for listening to the HR Chat Show. If you enjoyed this episode, why not subscribe and listen to some of the hundreds of episodes published by HR Gazette? And remember, for what's new in the world of work, subscribe to the show, follow us on social media, and visit hrgazette.com.