Over 60% business leaders still see HR’s role as administrative

As many as 92% of C-suite executives believe the perceived value of HR is a challenge for the profession, reveals  a new study from Sage, the leader in accounting, financial, HR, and payroll technology for small and mid-sized businesses (SMBs).

The poll of more than 1,000 HR and C-suite leaders working in SMBs across six of the world’s largest economies also highlights that a staggering 81% of HR professionals are feeling burnt out and 62% are considering leaving the industry.  

The research signals that now could be a seminal moment for the HR industry and it’s time for HR’s big rebrand. Nearly 73% of HR leaders and 85% of the C-suite claim the term ‘human resources’ is outdated.

Furthermore, 91% of HR leaders say the scope of HR’s remit has changed dramatically over the last few years – and 96% of the C-suite agree.

However,  while 86% of HR leaders feel the sector is adapting to become more speedy and agile, over 60% of C-suite executives (63%) still see HR’s role as administrative.

Less than half (39%) of HR leaders say they believe employees are knowledgeable about what HR does. And many business leaders don’t expect HR to play a leading role in key areas that would traditionally sit in its wheelhouse, such as workforce planning and company culture, the study also reveals.

“HR leaders are often the unsung heroes of an organization but over the last few years have demonstrated their influence, visibility, agility and impact more than ever. Considering the acute shortage of talent, the great resignation, and the quiet quitting phenomenon that a lot of organizations are facing, business leaders need to prioritize investment in technology, and increase upskilling the HR department. As a sector, we need to embrace tech that relieves HR professionals of the admin tasks and empowers them to focus more on strategy, supporting businesses and employees to reach their growth and development targets,”  says  Amanda Cusdin, chief people officer at Sage.

While HR leaders are trying to evolve their functions from predominantly administrative to more strategic, 73% of HR leaders and 76% of the C-suite say the balance often tips in favour of admin.

The future of HR  

While 91% of HR leaders say they are excited about the future of the profession, 83% agree that not having the right HR technology is a challenge for the future – only 59% of organisations currently use people analytics and cloud HR systems, and just 54% have some form of HR automation in place.

With 92% of HR leaders citing the sheer amount of work they’re facing as a barrier to future success, technology is key to managing the challenge. By automating admin, HR teams can spend more time on strategy, while self-service empowers employees to own their data, sparing HR the legwork too.  

“HR leaders get into the profession because they want to make a difference. Unfortunately, paperwork and admin too often get in the way of that. So it’s not surprising HR leaders feel more exasperated than ever. Thanks to automation, analytics, self-service and more, People leaders have a bigger opportunity than ever to finally swap the spreadsheets for strategy and re-discover why they got into HR in the first place: to make a difference,” says Helen Armstrong, CEO and founder of Silvercloud HR.

Asked what the top challenges will be for HR in 2024, in addition to workload, 90% of HR leaders predict it will be limited budgets, 89% cite lack of resources, and 83% say not having leadership support will be significant barriers.

When asked what the profession will need to be successful, two things feature highly on the list for HR leaders: a boost in HR skills (42%) and increased investment in specialisms (37%) (e.g. DEI specialists). Forty percent also want more technological know-how, and 33% want better peer-to-peer support networks within HR.

As for the top priorities for HR in 2024, HR leaders and the c-suite agree that talent management should be at the top of the list. Diversity, equity and inclusion, and employee health and well-being are the next top priorities for HR leaders, while the C-suite feels HR should focus more on financial growth, and efficiency and productivity.