TL;DR

Short answer: It depends on how much of its own remit HR is willing to keep giving away, and the honest read is that irrelevance is a bigger threat than AI. Brandon Jeffs, one of the sharpest recruiting voices I know, argues that HR outsourced payroll and benefits to finance, handed policy enforcement and risk to legal, and kept the pep rally, which leaves it defending a seat rather than defending a number.

Key stats you need to know:

  • AI-native startups are generating $2 million to $4 million in revenue per employee against roughly $300,000 at the average public SaaS company, with one company hitting $400 million in recurring revenue on 146 people (Forbes).
  • Average CHRO tenure sits around five years, one of the shortest runs in the C-suite (Korn Ferry).
  • Employers have removed degree requirements at scale, and yet sustained changes in who actually gets hired remain elusive for most companies (Burning Glass Institute and Harvard Business School), with the share of non-degree hires rising only about 3.5 percentage points from 2013 to 2024 (Deel).

The leadership takeaway: Over the next 12 to 24 months, the HR functions that survive will be the ones measured on revenue per employee and the quality of who walks through the front door, because those are the only two numbers a CFO already believes.

📺 Watch the full episode on YouTube: https://youtu.be/yUYpq1ASwSc

📻 Listen to it on Spotify: https://open.spotify.com/show/57xtYAUsIYrg7gQ0a6RFwc

Is HR Becoming Irrelevant, or Is It Giving Its Relevance Away?

HR is giving it away, one function at a time, and AI is only making the subtraction visible faster. I brought this to Brandon Jeffs, a recruiting leader whose public take on revenue per employee has been rattling talent leaders for two years, and a close friend. People see us going back and forth in the comments and assume we are adversaries. We are not. That is what made this the most candid conversation I have recorded.

Brandon walked the subtraction out loud. Payroll and benefits administration went to finance. Policy creation and enforcement went to legal. Employee relations still works in lockstep with legal on risk. Learning and development, in his read, is optional now because firm-specific human capital has given way to general skills already available on the open market, which was not true when IBM and GE hired smart people and trained them on proprietary technology. Strip all of that out and ask what is left. His answer landed hard. What is left is a function arguing about a seat.

I feel that one in my gut. I have a nearly primal reaction when someone says HR deserves a seat at the table. Nobody at that table deserved to be there. They earned it with insight, with pushback, with data. I came into HR in 2004 from the line of business, and I got the seat by defining my job as owning the largest expense and the largest revenue-producing asset in the company, then running every decision through that lens. Brandon's version is blunter and better. What happens if you finally earn a seat at the table and everyone at the table stands up and finds a new table?

The market pressure is real. AI-native firms are producing $2 million to $4 million per employee where the average public SaaS company produces around $300,000 (Forbes). When headcount efficiency becomes the flex, a function that cannot connect itself to that number becomes a line item. Same conclusion I reached in the CHRO playbook for closing the AI readiness gap.

What Is the Inverted Talent Pyramid, and Why Does It Matter in the Boardroom?

The Inverted Talent Pyramid is my term for redesigning the people function so acquisition sits at the widest point instead of the narrowest, because hiring is the root cause of most of the problems HR spends its headcount cleaning up later. I built it out of this conversation with Brandon, who has moved his own focus to recruiting for exactly that reason. Three layers explain why most enterprise HR orgs have this upside down.

  • The bloated base: risk absorption. Employee relations and HR business partners carry the largest headcount because they mitigate problems that already entered the building. I have seen orgs with 63 people handling employee relations and four recruiters, which is a system built to catch water rather than fix the pipe.
  • The choke point: acquisition. Recruiting is thin, and learning and development is thinner. Both go first when the economy tightens, so the two functions that decide who joins and who grows are the two the business trusts least with budget.
  • The inversion: prevention. Most good recruiters can spot a bad actor in the first interview. Widen that layer and the downstream employee relations load drops, because you stop hiring the problem. Brandon calls the future version of this labor market interface design: how a company accesses talent, how it prices itself against competitors, and how it reassembles teams from the market.

This is a boardroom issue because every layer carries a number. Recruiting owns the earliest and most holistic data in the employee lifecycle, including live compensation signal, competitive intelligence, and the referral graph inside your workforce. Brandon offered a test I plan to steal. Ask your top engineer to tell you about their HR business partner. Then ask them about their recruiter. His structural point is that recruiting gets stifled because most CHRO profiles come up through employee relations, and there is a subconscious pull to protect the path you walked. In a boardroom, I would say it this way. If sales fixes everything in the P&L, then hiring fixes everything upstream of sales, and your org chart should show that. It ties to the shift toward project-based teams I covered in what the Hollywood Model means for HR leaders.

How Should C-Suite Leaders Respond?

C-suite leaders and CHROs should respond by picking a business metric they will be judged on, then rebuilding the talent org around the front door rather than the cleanup crew. Here is the playbook I would run out of this conversation.

  1. Adopt revenue per employee as the headline people metric. Brandon's argument is that quality of hire fails as a measure because it has no universal definition, while revenue per employee is already on the CFO's page. Publish it by function, track it quarterly, and stop opening executive reviews with engagement scores.
  2. Rebalance the ratio between prevention and remediation. Count your employee relations headcount against your recruiting headcount. If remediation outnumbers acquisition by an order of magnitude, move two people and measure what happens to case volume over two quarters.
  3. Kill the job description and replace it with a scorecard. I want to nuke the things. Today's postings run on adjectives like dynamic and strategic, which nobody can manage or measure, plus a years-of-experience proxy. Run a real intake instead: what skills should someone have after those five years, and what outcome defines success. Then hold the hiring manager to it. I have told a manager we would take the req down and repost it, which triggers a five-day internal posting requirement, then asked whether they wanted to burn five days or hold to what we agreed. They held.
  4. Stop announcing skills-based hiring until you can prove one. Brandon's position is that it is not a thing yet, and the research backs him. Companies dropped degree requirements at scale while sustained changes in who gets hired stayed elusive (Burning Glass Institute and Harvard Business School), with non-degree hiring up only about 3.5 percentage points across a decade (Deel). Top engineers will not sit for long assessments without a reason, and preferences on a hiring manager's desk become the new proxies for requirements you deleted.
  5. Fix the recruiter comp ceiling before you lose the bench. A strong recruiter tops out as a VP of talent while the same person can bill seven figures independently, choose their clients, and work around their life. That math is why the industry keeps recycling its best people into 1099 work. Build a real pay path, or accept that your pipeline of future talent leaders is somebody else's client roster.

What This Means for You as a Leader

The tension underneath this episode is that AI is compressing headcount while HR is still arguing about proximity to power. Brandon's read on bleeding-edge companies is uncomfortable and probably right. A 100-person frontier AI company likely will not have an HR function, and it will not have a traditional recruiting team either, and that is survivable. The work still happens. It gets owned by commercially minded operators who understand the market for talent.

Right-sizing matters more than pace here. Governance is unsettled, we are waiting on landmark cases to set precedent, and adoption is uneven. Survey research from my day job found that 69% of talent leaders report using AI or automation somewhere in their practice while 45% have no governance framework at all, and only about 18% of that adopting group uses it across the function rather than at a single pinch point like interview scheduling. That is a bell curve still near the front end, the same trust problem I wrote about in why AI adoption in HR stalls on skills, privacy, and resistance.

Winning here has less to do with defending the function and more to do with taking the work nobody volunteers for. That was Brandon's closing line, and it was the best thing said in 40 minutes. Take the gnarliest req. Take the ugly employee relations case. Figure out what you are better at than anyone else and double down. Leaders who do that stay in the room when the org chart gets redrawn, which is the durability argument I made in rebuilding the CHRO seat after Bolt fired its HR team.

One more thing worth saying out loud. Both of us are where we are because someone took a 15-minute call. I think of it as leaving an imprint, like the handprints pressed into a sidewalk outside a building. You never know where it goes, and that is not your business anyway. Get on the plane and shake a hand you only know from the internet.

The full episode covers the ADP 2026 predictions we both pushed back on, shadow AI risk when your star performers bring their own models, and why Leo Messi wears Adidas while the rest of Argentina wears Nike. Catch it on this week's episode of The Human Capitalist podcast.

FAQ

Is HR becoming irrelevant?

Not automatically, and the risk comes from subtraction rather than AI. HR moved payroll and benefits to finance, policy and risk to legal, and kept programs, which leaves it defending a seat instead of a number while AI-native firms post $2 million to $4 million in revenue per employee (Forbes).

Is skills-based hiring real or just better marketing?

Mostly marketing so far. Employers removed degree requirements at scale while sustained changes in who actually gets hired stayed elusive (Burning Glass Institute and Harvard Business School), and non-degree hires rose only about 3.5 percentage points from 2013 to 2024 (Deel). There is also no universal definition of what qualifies as a skills-based hire, so companies cannot report against each other.

Why is recruiting the most strategically underrated function in HR?

Because sales fixes everything in the P&L and hiring sits upstream of sales. Recruiting also owns the earliest data in the employee lifecycle, including live compensation signal, competitor intelligence, and the referral network inside your workforce.

What is the Inverted Talent Pyramid in simple terms?

It is my framework for flipping the people org so acquisition is the widest layer and remediation is the narrowest. Most enterprise HR functions run the opposite way, carrying heavy employee relations headcount against a handful of recruiters, which treats symptoms instead of the hiring decisions that created them.

Why do great recruiters keep leaving corporate roles?

Because the ceiling is low and the alternative pays better. A strong recruiter tops out as a VP of talent while the same person can bill seven figures independently and choose which hiring managers to work with, which is why the industry keeps cycling its best people into contract work.

What should CHROs and CEOs do first?

Put revenue per employee on the first page of your people review, then count employee relations headcount against recruiting headcount. If remediation outnumbers acquisition by an order of magnitude, you have found the first thing to redesign.

I talk through frameworks like this one every week on The Human Capitalist. If this hit, the deeper five-mindset breakdown for HR leaders navigating the same shift is part of my upcoming book, "The FutHRist," dropping in September 2026. You can find where you stand with the assessment at trentcotton.com/futurist.