By Anne Walker, Founder of LEVEL 110
The gap between how high-performing HR functions operate today and how most companies run their People function is wider than most CEOs realize. Here are the signs it's time to modernize.
What constituted a well-run HR function ten years ago looks meaningfully different from what high-performing companies expect today. The tools have changed. The data available has changed. The speed the business requires has changed. And for most mid-size companies, the HR function hasn't kept pace with any of it.
This is not a criticism of HR teams. It's a call to action for the organizations they work in. Most HR leaders are clear-eyed about the gap. Many have been asking for the investment, the authority, and the executive partnership to close it. CEOs who recognize that and act on it will have a significant advantage over those who don't.
If your monthly People update is a headcount report, a turnover percentage, and an open roles list, the function is operating on outdated infrastructure. A modern HR function provides leading indicators: which segments are at attrition risk, which managers are struggling, which roles are taking too long to fill and why. If your HR data is telling you what happened last month instead of what's likely to happen next quarter, the investment in better systems hasn't been made yet.
If your first signal of a performance issue is a resignation, a conflict that's already escalated, or a team that's visibly struggling, you're operating reactively. High-performing HR functions surface risk early, before it becomes a crisis. That requires data, manager accountability, and a cadence of check-ins that most companies haven't built. Finding out late is expensive. Finding out early is a competitive advantage.
If every search begins with posting a job and waiting, if your time-to-fill for critical roles exceeds 60 days consistently, if you're losing candidates to faster-moving competitors, the recruiting infrastructure hasn't been built yet. Modern recruiting functions run on data: source quality, conversion rates by stage, offer acceptance trends, time-to-productivity by hire type. Building that infrastructure requires executive sponsorship, budget, and organizational commitment, not just a better HR team.
Annual performance reviews were already outdated in 2015. If your performance management system is primarily a compliance exercise, with forms to complete, ratings to submit, and boxes to check, it is not functioning as a performance tool. It's functioning as a documentation tool. This is often as much a reflection of organizational risk culture and executive priorities as it is an HR design choice. High-performing companies have moved to continuous performance conversations, and that shift requires leadership commitment at every level, not just a new HR process.
Every other function in the business has real-time data the CEO can access: revenue, pipeline, product metrics, financial performance. If People is the exception, if you're waiting for a manually produced report to understand what's happening with your talent, the HR function is not operating at the level the rest of the business expects.
When a restructuring, a new hire at the leadership level, or a significant team change happens without HR's early involvement, it's a signal that the executive team hasn't fully integrated HR into strategic decision-making. A modernized People function is in the room when organizational decisions are being made, and getting there requires executives to change how they operate, not just HR.
HR modernization is not a technology project. It's an operating model change that happens to involve technology. The companies that get it right do three things:
That's it. The tools support the model. They don't create it. If you start with the model, with clarity about what a high-performing People function looks like in your company and a CEO who is an active partner in building it, the technology decisions become straightforward. If you start with the technology and leave HR to figure out the rest, you get expensive software and an under-resourced function that was set up to fall short.
Anne Walker is the Founder of LEVEL 110, a San Diego-based executive HR consulting firm. She works directly with CEOs and senior leaders to remove organizational drag, modernize the People function using AI, and build leadership systems that scale.
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