“There’s been an incredible evolution over these last 20 years that has allowed the HR function to take a business driver position,” says David Wayner, General Manager, MidMarket Service Operations at Insperity. “But our data shows that not all organizations have kept up.”
A recent survey of 150 HR leaders and 200 C-suite executives, conducted by Insperity and HR Dive’s Studio by Informa TechTarget, found strong agreement that HR has a clear purpose and influences profitability. Despite that recognition, many organizations still haven’t elevated HR to the role of a true strategic partner. The expectation, however, is already there. According to the survey results, more than half of executives (51%) expect HR to propose solutions when business performance declines, yet only 14% view HR as a strategic growth partner.
The survey also uncovered several disconnects that may be limiting HR’s ability to operate as a key business partner. While executives and HR leaders largely align on near-term priorities like engagement, retention and productivity, they don’t always agree on what HR does in practice or how the function can create greater business impact. That puts HR in a tough position: expected to drive growth, but not always valued for the growth they do deliver. Closing the gap requires HR and the C-suite to answer — and align on — the following questions.
1. What is HR, really?
Executives unanimously agree that senior leadership understands HR’s strategic value, but when asked how they view the HR function, results quickly splinter.
Some see HR as an advisor focused on talent (28%). Others view it as a compliance and risk management function (23%) or a cost center focused on payroll and benefits (22%). Most notably, only 14% see HR as a strategic growth partner.
Without a clear definition, it becomes much harder for HR to operate as a strategic partner. But the disconnect isn’t only coming from the C-suite. HR leaders were more likely than executives to view their function as a cost center focused on payroll and benefits (27%), suggesting an opportunity for HR to own its role as a growth driver.
2. What is HR responsible for?
More than two in five executives (44%) say HR is very influential in major business decisions. However, when asked to identify HR’s primary responsibility, there’s less consensus.
Some say HR’s role is to drive long-term growth through talent (34%), while others say it is to protect the organization from HR compliance risk (24%). Others point to enabling leadership effectiveness (15%), supporting operational stability (15%) or optimizing workforce costs (14%).
This lack of alignment can make it harder for HR to focus its efforts and create impact in the areas that matter most.
3. Where can HR make the greatest impact?
Neither executives nor HR leaders have a clear, shared view of where HR has the greatest opportunity to drive business impact. The responses were strikingly fragmented: no single opportunity exceeded 20% in either group.
The most notable disconnect was succession planning. Executives ranked it as HR’s top opportunity to drive business impact, while HR leaders ranked it last. Multiple executives also doubled down on succession planning in a short-form question about what would meaningfully increase HR’s strategic influence.
This gap may be one of HR’s biggest opportunities to close the divide, but it wasn’t the only one. HR leaders ranked driving workforce performance 6 percentage points higher than executives, signaling another area where expectations need clarification.
4. Does HR get enough executive support?
More than two in five executives (44%) say HR is very influential in major business decisions, but HR may not always have the backing it needs to turn influence into action.
While the majority of executives believe HR has the executive support it needs, HR leaders see things differently. Sixty-four percent of executives say receiving executive support is “not too challenging” or “not challenging at all,” yet over half of HR leaders (51%) say receiving executive support is at least “somewhat challenging.”
Without consistent executive support, HR may struggle to strengthen its perceived influence.
5. Is HR burdened by administrative demands?
Most executives believe HR has the resources and capacity to manage its responsibilities. Most HR leaders disagree.
Sixty-three percent of executives say administrative burdens hinder HR’s ability to operate strategically “not at all” or “not too much.” Nearly the same share of HR leaders (64%) say administrative demands hinder HR’s ability to operate strategically “somewhat,” “very,” or “extremely.”
For growing organizations, this gap can become especially difficult to ignore. As Maria Jugin, Manager, HR Services at Insperity, explains, “Your system can make sense when you have 50 employees, but now, at 250 or 450, it no longer does.”
6. Is an HR leader’s perspective valued?
The good news: when asked whether HR’s perspective is highly considered in executive meetings, no respondents disagreed. But “somewhat agree” was the most common response among both groups (53% among HR leaders, 48% among executives).
This finding suggests HR has a voice in the room, but its perspective may not always extend to broader business strategy. For HR leaders, the difference between being included and being meaningfully considered can shape how much impact they can drive.
What HR can do next
HR clearly has a larger role to play in the boardroom and across the board, and that role is only expected to grow. Three-quarters of executives (76%) and HR leaders (75%) predict HR’s strategic influence will change “somewhat” or “significantly” in the next five years.
Shaping that future role will require stronger alignment on HR’s purpose and responsibilities. To get there, Jugin gives HR leaders one more question: “Do I understand what it takes for the business to be successful, and can I align the work that I do on a daily basis with my company’s overall mission?” Answering that question can help HR leaders clarify where strategic change needs to begin.
The full survey report identifies where to start, outlining seven levers HR leaders can use to operate more strategically, including improving the internal talent pipeline, becoming stronger business communicators and using AI to create more room for strategic work. Download the full report to learn more about the levers that can help HR leaders create alignment and own their role as growth drivers.