HR's impact gap: how to prove strategic value to the business

Eight in ten human resources leaders say their single biggest barrier to being central to organizational strategy is that their impact isn’t being fully measured. That’s according to the finding of an informal HRD LinkedIn poll — and it exposes a persistent fault line running through the profession. Human resources (HR) is invited to the executive table, but it’s rarely handed the agenda.

The gap between visibility and genuine decision-making authority is one that Sonja Nelsen, Vice President of Human Resources at The Peak Group of Companies — a global consumer goods company headquartered in Canada with operations across the US, Australia, New Zealand, and China — has navigated directly.

“The influence paradox is an interesting challenge that many Chief Human Resources Officers face,” Nelsen says. “The fact that HR is seen as a strategic partner, but is still not viewed as central to the enterprise strategy, speaks to the complexity of the role. Part of the issue is that visibility doesn't always translate into decision-making authority.”

Her approach is deliberate and data-led. “By being proactive and offering data-driven insights and aligning HR initiatives directly with the business key performance indicators (KPIs), and by showing executives how our people strategy directly impacts profitability, productivity and customer satisfaction — that's when you can truly demonstrate that HR plays a central role to business success.”

Moving from internal metrics to value creation

One of the sharpest critiques emerging from HR leaders globally is that the profession has grown too comfortable measuring what’s easiest to count — engagement scores, turnover rates, absenteeism figures — rather than the outcomes that register with finance teams and boards.

Workforce transformation leader Carolyn Hamer, a Partner, Human Capital at Deloitte in Toronto, frames the problem in concrete terms. Deloitte's 2026 Human Capital Trends report found that 93 per cent of AI investment in organizations goes toward technology, with only seven per cent directed at people — a fundamental imbalance that is distorting how value is measured and reported.

“We're measuring the wrong thing,” says Hamer. “When it comes to return on investment, we're still looking very much at what’s coming out of our technology spend.”

The same logic applies when HR measures its own function. “Token consumption tells us about activity — how much people are using the tools — but it doesn't really get at impact,” Hamer says. “If you're looking at what HR teams should be measuring, how AI is actually improving quality, decision speed, and employee experience — things that get at the fabric of how individuals are managing and succeeding at work — that's going to be a better measure over time.”

Measuring human value

The global picture reinforces the urgency. Stacy Parker, a leadership trust and organizational culture specialist and Managing Director of Blu Ivy Group in Toronto, argues that HR leaders looking to build a credible measurement case must reorient.

“What we stand for is measuring what we call the human value chain — understanding the impact of every decision you're making,” says Parker. “How is your reputation as an executive team, as a CEO, comparing to your competitors in the marketplace? And how is that translating to customer perceptions and indicators of loyalty or lifetime value? Those are huge metrics to identify what your performance is going to look like next quarter.”

Parker believes that traditional engagement metrics are no longer enough. “For HR leaders, it’s really important that we're looking at value creation within culture as opposed to some of the metrics that we're historically comfortable with,” she says. “We have to be looking at how culture and people are shaping customer retention and customer growth.”

The global measurement challenge

The measurement gap is evident elsewhere. Yolanda Seals-Coffield, Chief People and Inclusion Officer at PwC US in New York, says that even at a firm of 80,000 people that moved early and aggressively on artificial intelligence (AI) adoption — achieving over 90 per cent completion of initial AI training across its workforce — the metrics question remains genuinely unsolved.

“What we're working through from a metrics perspective right now is how to measure the depth of that usage,” Seals-Coffield said. “We want to understand whether our people are using it just on the surface or whether they are truly using it to start to change the flow of their work.”

Seals-Coffield’s believes that HR's evolving mandate speaks directly to the strategic influence problem. “How our people are experiencing the transformation is so critical to our success on this journey — and that sits pretty squarely on the people team,” she says. “There's a very consistent theme among my peers around how closely we work with our Chief Technology Officers to think about not just how we build incredible technology, but how we deliver it to our people from an experience perspective.”

Jonathan Tabah, Director in Gartner's human resources practice in Sydney, adds a further dimension: the measurement problem runs not just at the HR function level, but through how HR evaluates its own managers — and the signal this sends to the C-suite about the function's strategic seriousness.

“Rather than simply measuring managers just on things like the engagement and retention of their staff, we should also be measuring them based on things like their contribution to the organization’s performance outcomes,” says Tabah. “Yes, we should still measure talent outcomes — engagement, retention — but we should also be evaluating whether they're impacting business goals too.”

Tabah is direct about what HR leaders are hearing from the top: “When I engage with heads of HR — direct reports to the CEO — almost all to a ‘T’ have got aggressive high performance targets and objectives,” he says. “When we really break it down, the word that keeps bubbling to the top is productivity… our job in HR is to provide a workforce that can help the business achieve its goals — if we aren't helping the workforce adapt to those new objectives, we will fail in that goal.”

What CHROs need to stop doing — and start

Nelsen is clear about what needs to change at the leadership level. “CHROs must stop thinking of themselves solely as policy enforcers,” she says. “Too often HR is still seen as a gatekeeper of rules and regulations, which can truly be a barrier to truly strategic conversations.”

Her prescription involves three interconnected shifts: strategic workforce planning and leadership pipeline development that tie directly to business objectives; building a genuinely data-driven HR function that translates people metrics into outcomes; and cultivating authentic relationships not just with the Chief Human Resources Officer's (CHRO's) C-suite peers, but with directors and managers across the entire organization.

Another critical piece is cultivating a data-driven HR function that shows how talent strategies impact key business metrics, according to Nelsen. “That's how we get seen as that trusted business partner that really understands the complexities and overall needs of the business,” she says. “Without engaged employees, you can't sustain long-term growth in the organization... when everyone's all in, that's when you win.”

The majority in the HRD LinkedIn poll who identified unmeasured impact as the barrier are not wrong about the problem. But the evidence from those who are doing it well points to the same solution: speak the language of the business, connect every people metric to a business outcome, and stop waiting to be invited into the strategy conversation. Walk through the door.