Lattice's 2027 State of People Strategy report: Three key decisions for HR leaders

More than half (55%) of HR professionals considered leaving the profession in the last 12 months - up from 41% the year before.

That’s the headline finding from Lattice’s 2027 State of People Strategy report, which canvassed 1,358 HR professionals across the US and Europe.

Respondents reported feeling undervalued (39%), operating in crisis mode (35%), and pressure and burnout (34%) as drivers for evaluating their future in HR.

The takeaways from the 2027 report show the mandate of HR is expanding faster than the support or authority provided to deliver it.

UNLEASH examines the three key decisions in front of HR leaders uncovered by Lattice's report that will impact on retention drivers among HR teams.

1. Performance management needs infrastructure, not intent

Performance management was identified as the top HR priority for the coming year (38%), while updating HR tech stacks as a priority rose to 32% - nearly doubling from 2025.

The report shows high-performing HR teams are far more likely to prioritize updating tech compared to those not achieving their goals (41% vs. 20%).

They are also twice as likely to run quarterly reviews (36% vs. 16%) and use AI to summarize feedback (64% vs. 24%).

The findings underline that performance management is now a business imperative – it is also moving in lockstep with tech.

The report stated that “HR tech is what keeps performance in perpetual motion,” but also warns that it is only impactful when “managers and employees give it something meaningful to work with.”

For HR leaders, there is a choice on how performance is undertaken: keep it as an annual practice bolted into existing infrastructure and process, or rebuild in tandem as a continuous process with the tools required.

Lattice’s findings indicate that for HR teams to achieve high-performing status, the only real option is the latter: performance outcomes and tech investments are intrinsically linked and moving forward hand-in-hand.

Elevating performance management as a culture, rather than a ritual, means treating it as a key driver when budgeting for tech.

2. AI should be input only on people decisions

The report found that 83% of HR leaders are either “somewhat or very excited” about the use of AI in their function. Meanwhile, excitement over agentic AI increased from 13% to 19% over the past year.

It has also made its way into performance management processes, with nearly three-quarters (74%) of HR respondents believing AI is being used by managers to write reviews – 64% believe this leads to higher quality outcomes.

Likewise, there are high levels of comfort with AI handling clerical work, such as summarizing meetings (76%), drafting reviews (74%) and identifying bias (65%).

However, when it comes to using AI to identifying workers for promotions or pay increases, comfort drops to 42%.

The data shows that HR’s AI perspectives are based on proven effectiveness rather than enthusiasm levels, acknowledging that the tech is not the answer to all the function’s challenges. Nearly three in four (74%) of HR respondents stated that organizations cutting human headcount in favor of AI are overestimating the productivity gains they’re going to see.

Despite overall concern over the potential impact of AI falling from 27% to 16% year-on-year, HR leaders need to ensure the line between AI as an input and AI as a decision maker is both clear and transparent.

That line must be an explicit decision instead of an organic development – and transparently communicated to the rest of the organization.

3. Speak culture in business terms or watch it get cut first

The impact of psychological safety in Lattice’s findings is clear: HR teams that feel safe to take risks and challenge decisions without fear of judgements are 12x more likely to exceed targets, 8x more excited about using AI in their function, and are significantly less burned out (2% versus 41%).

Despite these measurable impacts on business results, around half (48%) of HR leaders are under pressure to justify Learning & Development.

The report also surfaces a correlation between HR leaders and the rest of leadership teams here – those with an “excellent relationship with their C-Suite face significantly less pressure to justify their efforts across every single program” compared to those with weaker relationships.

For HR leaders, the decision is whether to keep making the case for culture and psychological safety in the function’s own vocabulary – engagement scores, values statements, survey results – or to translate it into the terms the C-suite is already using for evaluations: retention cost, customer experience, growth.

The risk is that by not translating that impact, these culture programs become more exposed to the scrutiny the report illustrates, which already falls on engagement, wellbeing and growth – regardless of how well they are performing.