C-suite leaders: HR is not playing a leading role in business priorities

Recent research has revealed a gap between the type of metrics the c-suite wants, and what HR is actually providing, says Jessica Fuhl, a co-author of an in-depth study on HR’s impact

The pandemic has shone a light on the work of HR. Just under  three quarters of HR leaders (72%) told us that the crisis has helped them demonstrate their value and increased understanding of HR’s role, as HR and people teams sprang into action to respond.

However, despite this, 84% of c-suite leaders we polled here at Sage also told us that they were previously unclear on the value that HR brought.

As HR and people teams look ahead to the future, the pandemic has offered a window of opportunity. The message from c-suite leaders we polled in our brand-new research report was clear: HR need to take it.

Sage polled 500 HR and C-suite leaders to find out more about how aligned HR are to business priorities post pandemic, what role they’re playing in them, and how people analytics is being used to drive business decision-making. The report, Impact through Insights, is the second report in Sage’s HR in the moment research series. Overall, we found:

• 81% of c-suite leaders believe HR is aligned to business priorities.
• However, just 41% think HR is playing a leading role.
• 94% of c-suite execs say they have access to some form of HR analytics.
• Yet just 40% of c-suite leaders say their organisation uses people data to make business decisions.

How aligned are HR to business priorities?

The good news is that the c-suite is confident in HR’s focus, with 81% saying HR’s priorities are aligned with those of the overall business.

Both HR leaders and business leaders agreed on their top four business priorities. Financial performance took top place; leadership ranked second for both the c-suite and HR with a third (32%) of both groups agreeing this to be a business priority; business operations and digital transformation also appeared in the top four for both HR leaders and c-suite execs.

C-suite execs are expecting HR to lead more

However, being aligned on business goals is one thing, leading the delivery of them is another. Our research found that less than half (41%) of the c-suite say HR is playing a leading role in delivering business priorities, even in those areas traditionally within HR’s wheelhouse, such as skilling and upskilling.

Remarkably, HR and people leaders agree with the c-suite about this – and identify their own lack of leadership in these critically important areas. For example, less than half of HR leaders (48%) and business execs (45%) believe HR is playing a leading role in skilling and upskilling. Less than half (46% of HR leaders and 47% of c-suite execs) feel HR is playing a leading role in company culture.

About a third of HR leaders (31%) and c-suite leaders (36%) say HR are playing a leading role in scaling the business.

C-suite leaders expect more from HR than HR leaders

When we delved deeper into the data, we found some even more intriguing perspectives.

More than a third (39%) of the c-suite feels HR is leading in digital transformation, compared with just a quarter (25%) of HR leaders.

Overall, we found c-suite leaders expect HR to lead more than HR leaders expect themselves to, in all but two categories, revealing a significant expectation gap around the role of HR in organisations today. There are many ways you could interpret this, but one is this: c-suite leaders have a lot more confidence in HR’s leadership abilities than HR and people leaders themselves do.

When looking at these different perspectives, it’s clear that while HR leaders have gained influence – 59% of HR leaders told us in our previous research report Changing Expectations and Perceptions of HR that they’ve become more influential as leaders – there’s still plenty of room left for them to develop HR’s leadership and impact across the business even further.

HR must free up capacity

Why then, if HR and people leaders have had more opportunity to influence and lead, is the chance not being seized? Our previous report in the HR in the Moment Research series, found most HR leaders (up to 60%) said their workload had increased as a direct result of the pandemic, with 40% of HR leaders saying they’re too focused on paperwork and admin.

The challenge then, is for HR to free up capacity within their teams so they can redirect and focus their efforts into leadership and driving change. Automation and self-service play a vital role in this. Another way is by providing business leaders with more meaningful and actionable insights, and more useful recommendations for the business.

HR and leadership: the next steps

Businesses have an abundance of HR and people data at their fingertips, and HR leaders are in prime position to provide insights that drive real and measurable business impact. Yet our research findings from Impact Through Insights show that despite 94% of the c-suite receiving data from HR, more than half (68%) are not heavily reliant on it.

What we discovered was a gap between the type of metrics c-suite want, and what HR is actually providing. Our c-suite respondents told us that “leading metrics” such as employee satisfaction rates and cost per hire data would be invaluable, but in many instances, HR and people teams are not providing this.

The role of HR tech in helping organisations achieve their business priorities must not be underestimated either. Our research identified a need for more investment in training and technology for HR, so that data can be accurately interpreted to make inferences about the future and provide the kind of insightful recommendations that improve strategic decision making.

What now for HR leaders?

The pandemic has thrust HR leaders into bold new territory, exploring new ways of working, experimenting with resources, and navigating unparalleled challenges like never before.

As we move into this next chapter, our new research shows that HR and people leaders have a once in a generation opportunity to take on more of a visible, leadership role – and fellow c-suite leaders are expecting HR to do so. But this can only happen if HR leaders can properly leverage HR tech and automation to free up precious time, away from admin and towards proactive analysis, to deliver the insights that will truly make all the difference to business outcomes.

The spotlight is on HR. The question is: are HR and people leaders ready to step in and play the leading role before it moves away?

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