HR still treated as 'support function' in organisations
Only half of chief executive officers view their HR teams as a strategic partner at work, according to a new report, which reveals a credibility gap over the HR function.
Insights gathered by isolved among nearly 3,500 primarily small and medium-sized businesses found that only 50% of CEOs view HR as a strategic partner.
Only 62% of business owners, 35% of IT leaders, as well as 23% of finance leaders agree with the sentiment, according to the report.
The credibility gap is also present in HR teams, as the report found that only 52% of their functions are seen as strategic for the organisation.
In fact, the report found that many HR teams remain reactive and focused on compliance despite companies experiencing an average of four-and-a-half major business changes a year.
"The research confirms what many HR leaders already feel. HR is expected to drive transformation but is still treated like a support function," said Amberly Dressler, Vice President of Corporate Marketing at isolved, in a statement.
The credibility gap comes despite the report finding that companies investing in the HR function achieve 34% better business outcomes over a five-year period.
These benefits contribute to innovation, market share, profitability, customer satisfaction, and competitiveness.
"Year over Year, companies that invest in an HR function recognised across the organisation as a strategic asset see stronger business outcomes," the report read.
On the other hand, organisations that only view HR purely as a compliance function "tend to fall behind," according to the report.
"This research is a wake-up call not because HR lacks capability, but because too many organisations that treat HR as a compliance function risk being left behind," said Stacey Harris, Chief Research Officer at Sapient Insights Group, in a statement.
The report added that organisations utilising AI in their HR processes report an average of eight per cent improvement across HR, talent, as well as business outcomes.
"We can't overlook the strategic value of intelligent tools already at our fingertips. AI is no longer a concept of the future. When HR leaders engage with it intentionally and ethically, they not only streamline operations but also elevate their influence and drive measurable outcomes," Harris said.
