HR's role is often undervalued in the c-suite, despite its critical contribution to organisational success. The People Space looks at the latest research and what c-suite members think HR can do to close the alignment gap
“HR is like knicker elastic. You don't miss it until it's gone!" This quip from Jonathan Edge, group HR director at Quintessential Brands Group, captures the essence of HR's often underappreciated yet foundational role in organisational success.
His comment comes as research from people management tech provider Lattice finds a critical gap in alignment between HR and the c-suite that affects everything from recognising the importance of HR programmes to understanding the value HR brings to business outcomes.
Only 27% of the 1,000+ respondents said their c-suite sees a connection between HR programmes and revenue growth, while 28% said their executive team sees a link to product/service quality. Only 30% see the link between HR and customer satisfaction. Even in the strongest area of productivity fewer than two-thirds of c-suite executives (61%) believe it is impacted by HR, while fewer than half of HR professionals (48%) feel their c-suites take employee survey data seriously.
Across the board a higher percentage of HR professionals believe they contribute to their organisation’s success. For example, 83% of the HR professionals feel they can have a significant impact on overall company productivity. But even HR professionals are not confident in demonstrating their impact in other key business outcomes, with just over half saying they impact customer satisfaction, revenue growth and product/service quality.
The disparity in expectations around layoff recovery offers a vivid illustration of this misalignment. While 74% of HR leaders estimate that it takes four to 12 months for employee morale and productivity to bounce back after layoffs, a significant majority of c-suite executives expect recovery within three months or less. This difference in perspective underscores a broader issue: a fundamental misunderstanding of the human element within business operations.
How HR can bridge the gap
So what can HR leaders do about this? At an event organised by London HR Connection Mike Ellwood, chair, NED and senior executive with many years’ experience operating at board level across a number of complex global organisations, emphasised the importance of a unified vision of the organisation's purpose and goals. In his experience: "The dynamic between HR and the board works best when there is a clear view of what the purpose and goal of the organisation is, rather than one director owning it. For example, productivity is relevant to all. Everyone owns it, it’s not just an HR issue or a CEO issue. It's all about collaboration."
The need for better collaboration and communication between HR and the c-suite is a common theme. Non-executive directors (NEDs) generally show more interest in the people agenda than executive directors, suggesting a potential leverage point for enhancing HR's strategic influence. Where the CEO does value HR it is often the individual HR director that is valued rather than a belief that the HR function as a whole is adding value.
The solution lies not just in recognising HR's value but in integrating HR insights with business strategy through data-driven storytelling and shared objectives. But one area of contention is how to measure HR’s impact. Filipe Martins, VP people at collaborative automation platform provider Cutover, argues for a nuanced understanding of HR's contributions, emphasising the importance of context in evaluating metrics. “Is 'measuring' about justifying existence or actually aiding the business?” he asks.
He questions the use of traditional key performance indicators (KPIs) in HR, saying they are “loaded”. Take attrition rates. Whether the number is high or low is not the issue. Instead the conversation should be around whether that number is causing pain for the business. “What is the context? Is high turnover good or bad for the business? Is it causing a problem for the business?” he asks. Instead, Martins advocates for meaningful conversations that align HR metrics with business objectives.
While conceding that the board often misunderstands the value HR can bring – and indeed in many cases doesn’t even know what it wants from HR – there is some consensus that HR leaders need to be better at connecting the dots. Misalignment occurs when you can't tell stories backed up with data. If people professionals can't tell a story and make links to business problems then they are disconnecting themselves.
So a key lesson is that to bridge the HR and c-suite gap HR professionals need to look at the data and then tell the story – not the story HR wants to tell but what the data is saying. If HR goes first to the data it will win credibility.
Misalignment between HR and the c-suite is more than a simple misunderstanding; it's a strategic gap that can affect every aspect of business performance. By fostering a culture of collaboration, leveraging data to tell compelling stories and aligning HR initiatives with business goals, organisations can bridge this divide. But this requires a shift in perspective from both sides: c-suite executives must recognise the strategic value of HR and HR professionals must articulate their contributions in terms that resonate with business outcomes.
The dynamic between HR and the board works best when there is a clear view of what the purpose and goal of the organisation is, rather than one director owning it