Rethinking People Investments: The New C-Suite Reality
I’m noticing a quiet shift underway in the C-suite. In the face of economic uncertainty and accelerating disruption from AI, many leaders are pulling back budgets—and also reexamining long-held assumptions about Rethinking People Investments.
Budget conversations are becoming more demanding. Programs that once felt untouchable are now being paused, downsized, or reexamined through the lens of cost and contribution. Even foundational people programs are not immune from scrutiny. Where growth and innovation once dominated the agenda, we’re now seeing a return to discipline, selectivity, and proof.
Deloitte, PwC, and Conference Board have all pointed to a business landscape shaped by economic caution. Oliver Wyman and NYSE see over two-thirds of CEOs reallocating resources with precision, focusing on bets they can measure, and pulling back on the rest. And nowhere is this shift more visible—or more painful—than in human resources. Gartner reports that 65% of HR leaders anticipate flat or declining budgets in 2025.
The Risk of Getting It Wrong
In times like these, the instinct is often to freeze and eliminate programs. However, this is not a moment for blind cutting. It’s a moment for cutting with clarity—and for understanding what—and who—is quietly keeping your company alive. The leaders I talk to certainly aren’t looking to slash indiscriminately. They want to prune carefully, removing what no longer serves the business while protecting the talent and programs that will drive its next chapter.
This moment demands precision. Scaling back on programs that aren’t working can be healthy, but it carries real risk if done without first getting clarity on what is working. For example, RedThread Research recently flagged a trend of performance management programs being trimmed back. Many employee experience efforts are narrowing in scope or disappearing altogether, unless those programs can be tied directly to business imperatives.
The Signals Leaders Are Searching For in Their People Investments
In every conversation I’ve had with leaders lately, this one theme keeps coming up: they want to protect what matters. They can’t fund everything. But they also know the cost of cutting programs that quietly hold the culture together. The challenge is knowing where to focus. Most traditional people strategies are designed to scale broadly, but in constrained environments, generalizing is expensive. It misses the mark.
Leaders don’t want to guess. They want to target. To retain the people who elevate those around them. To develop the ones with headroom to grow. And to solve for skills gaps by building, not just buying, by looking inward at where capabilities already exist but may be hidden, untapped, or underrecognized. This moment calls for sharper signals: clearer ways to understand who’s making the biggest impact, where collaboration is strongest, and where potential is being underutilized.
This Isn’t Playing Favorites. It’s Seeing Clearly.
There’s understandable hesitation when it comes to targeting investments in people. Leaders worry about fairness, about optics, about creating two-tier systems. But the answer to that discomfort isn’t to flatten everything. It’s to raise the standard for what programs should do.
If a program is going to survive this moment, it needs to perform on two fronts. First, it must calibrate investment to impact. The best people programs should disproportionately benefit the individuals who are driving the business forward—that’s not favoritism, that’s precision. Second, it must bring insight back into the business. The strongest programs don’t just support employees; they deliver people intelligence.
From Human Data to Actionable Intelligence
In an uncertain environment where every choice carries more weight, leaders need more than instinct. They need insight that is grounded in behavior, connected to contribution, and current enough to act on. The signals already exist inside your business: recognition, collaboration, and peer feedback. What may appear as culture initiatives are, in reality, some of the richest data sources you have. They reveal who’s driving momentum, who’s aligned with strategy, and where leadership is quietly emerging.
That’s why companies like Cisco continued to fund recognition at about 1% of payroll, even during a significant transformation. This move not only strengthened connection but also generated the crucial data leaders needed to better navigate change. The more I look at where organizations are thriving, the more I’m convinced that this kind of real-time, people-centered understanding will become the essential operating system of future workforce management. The goal isn’t to do more with less. It’s to do the right things with what you have.
Credit: Forbes.com
