The evolving role of HR as a strategic business partner is not a new concept in 2026. However, what is changing is the function’s expanding responsibility as an enterprise risk manager. Beyond people operations, HR now plays a growing role in overseeing legal, reputational and technological compliance risks.
The PwC Global Compliance Survey 2025 outlines that organisations are operating in an increasingly complex regulatory ecosystem, where compliance responsibilities now span areas such as workforce, ethics, governance, data protection, and technology risks. Nearly 90% of respondents reported that the breadth of compliance responsibilities has increased over the past three years, reinforcing the need for cross-functional leadership involvement, including HR.
This shift places HR leaders at the centre of workforce risk management, particularly in areas such as employee data governance, AI adoption policies, digital behaviour standards and skills development for compliance awareness.
How the shift happened
HR’s expansion into risk management was not a sudden transition. It began with the integration of AI into workplace systems, where the initial priority was ensuring transparency and fairness in core HR processes such as CV screening and candidate selection. Over time, this role evolved to encompass ethical oversight within workspaces, employee monitoring practices and data protection requirements amid rapid technological disruption.
Supporting this trajectory, Deloitte’s Global Human Capital Trends 2025 report found that more than half of HR and business leaders are concerned about blurred boundaries between human and technology-driven work. This concern further reinforces HR’s growing responsibility in compliance oversight and risk governance, positioning the function as a strategic safeguard within increasingly complex business environments.
The emerging expectations from HR leaders
With HR securing an influential position as risk managers, they are increasingly expected to anticipate risks rather than respond to them. With this, HR teams are increasingly expected to develop stronger capabilities in data literacy, risk assessment, governance frameworks and ethical decision-making, alongside traditional people management expertise.
Executives are also looking to HR to provide insights into how risk decisions will influence employee trust, engagement and organisational reputation. For example, decisions around AI deployment, workforce restructuring or employee monitoring are no longer viewed solely through operational or legal lenses, but also through cultural and behavioural impact.
How HR balances compliance and culture
Among leadership functions, HR holds one of the closest connections to both organisational decision-makers and employees affected by those decisions. While HR understands the strategic intent behind policy, technology and compliance changes, it is also among the first functions to assess their impact on workforce behaviour, engagement and morale. This dual visibility positions HR uniquely to navigate uncertainty created by evolving compliance requirements.
Here’s how HR is balancing its expanding risk mandate while sustaining people culture:
- Embedding compliance into organisational culture: Rather than treating compliance as a separate control function, HR integrates it into everyday behaviours, leadership expectations and performance frameworks. For example, they evaluate managers on ethical decision-making or adherence to workplace conduct standards. This approach improves accountability while reducing resistance from employees.
- Governing responsible AI adoption: HR plays a central role in establishing ethical AI policies for recruitment, performance management and workforce analytics. This includes mitigating bias risks, ensuring transparency and building employee trust in automated decision-making systems.
- Protecting employee data and digital trust: As custodians of sensitive workforce data, HR collaborates with IT and legal teams to strengthen data privacy protocols, cybersecurity awareness and responsible data usage. A common example includes mandatory training on phishing risks or clear policies on how employee data can be accessed and used.
- Strengthening workforce risk awareness: Through training, communication and leadership development, HR helps employees understand compliance expectations, ethical conduct standards and digital behaviour risks, transforming compliance from obligation to capability. This could include organising workshops on social media conduct or ethical decision-making scenarios.
- Preserving trust during monitoring and control measures: As organisations introduce surveillance tools, productivity tracking or stricter governance systems, HR ensures transparency, fairness and clear communication by defining boundaries, such as limiting monitoring to work devices only. This prevents cultural damage or disengagement.
- Enabling cross-functional risk collaboration: HR participates in enterprise risk committees, working alongside legal, compliance, technology and operations leaders to anticipate workforce-related risks and design proactive mitigation strategies. They may contribute workforce insights when companies assess risks linked to legal and technological changes.
In doing so, HR acts not only as a risk manager, but also as a cultural stabiliser, helping organisations maintain alignment, transparency and psychological safety during periods of change.
What this means for employees
While compliance frameworks and risk controls are often perceived as organisational safeguards, HR’s expanding role as a risk manager also delivers direct benefits for employees, making workplace systems clearer, safer and more predictable for employees. Here’s how:
- Greater transparency in workplace decisions: Clear policies guided by HR around AI use in hiring, promotions or performance management help employees understand how decisions are made, reducing perceptions of bias or unfair treatment.
- Stronger data protection and privacy assurance: Defined data governance frameworks reassure employees that their personal and professional information is handled securely and accessed responsibly. This promotes trust and retention.
- Clear behavioural expectations and reduced ambiguity: Compliance frameworks provide employees with guidance on acceptable conduct, digital behaviour and workplace responsibilities, making it easier to navigate complex environments.
- Safer channels to raise concerns: HR-led whistleblowing systems and ethical reporting mechanisms create psychological safety, encouraging employees to report misconduct or risks without fear of retaliation.
- Increased trust during organisational change: When HR communicates the purpose behind compliance measures or technological changes, employees are more likely to accept them and remain engaged.
The future outlook: From people function to enterprise stabiliser
Looking ahead, as organisations become more digital, distributed and regulated, those that recognise HR as a core component of enterprise risk strategy will be better positioned to maintain trust while implementing controls, defining true leadership capability.
Over time, HR’s role will increasingly involve designing systems where compliance supports culture rather than constrains it. In this environment, HR will not choose between protecting the organisation and supporting its people. Instead, the function will integrate both priorities, acting as a stabilising force in complex and rapidly changing workplaces.