The HR You Deserve

Article by Octavius Black, Co-founder and Exec Chair MindGym. This article originally appeared in People Management, February 2026.

‘How to get HR a seat in the Boardroom’ was the packed-out session at a conference I was speaking at. This was 25 years ago. If you promoted an event with this title now, the room would be empty because the Chief HR Officer (CHRO) already has one.

In 2010, Vineet Nayar’s plea for employee-centricity, Employees First, Customers Second: Turning Conventional Management Upside Down, sold over 100,000 copies, making it the ‘Da Vinci Code’ of business books.

Since then, almost every company has put HR firmly at the Exec table with the ear of the CEO and previously unimagined influence and status.

It’s quite an achievement for a business discipline to go from notetaker to agenda setter in half a working life. But is this a good thing?

Since the turn of the millennium, the proportion of the workforce in HR has increased significantly across Western countries, almost doubling in the UK¹. Meanwhile, CHRO total compensation has increased from 40% of the average senior executive, including the CEO, to 70%².

Over the same period, productivity is lacklustre, absenteeism is on the increase, allegations of harassment are up threefold³, economic inactivity is worsening, and it’s hard to discern among Gen X, Y or Z a love of work, for many of whom quiet quitting and side hustles are a badge of honour.

As these results show, in too many companies, HR has become a cost centre with a moral mission rather than a business function with a commercial one. Under the banner of good intentions, the people function has been distracted at best, destructive at worst.

At the root lie four fallacies.

Popularity vs performance

The first and most pervasive of these is that popularity equates to performance.

We all like to be liked, but that is different from improving a company’s performance.

In two separate studies, students’ ratings of their teachers were compared with their exam performance⁴. While short-term test results were good, students’ assessment of their faculty proved to be a very poor predictor of exam performance later on. There wasn't just no correlation, but an inverse correlation. The students of the higher-rated professors got worse results. 

The increasing dependency of upward feedback and employee attitude surveys to measure leaders’ performance has transferred this problem into the corporate world.  If what matters for my bonus is what my team think of me, or a claim, however unsubstantiated, of bullying or harassment could destroy my career prospects, I’ll be as lovely as I know how, whatever the consequences on the bottom line.

A CHRO of one of the world’s leading pharmaceutical companies came to me for advice. “Some of the leaders in our top-performing divisions aren’t signing up to our new competency model, which defines what we expect our leaders to do. Can you help me persuade them?” 

It transpired that the problem wasn’t with the leaders but with the standards, which had been based on an idealised ‘Sound of Music’ view of the world rather than a down-and-dirty understanding of what it really takes to succeed as a business leader.   

No statistical validation had been done. The result was a model weighted to ‘open’ behaviours like coaching and collaboration, but missing the ‘closed’ behaviours needed for high performance, such as holding people to account and rejecting sub-standard work.

When popularity becomes a proxy for performance, rational leaders will optimise for likability, not results.

Process vs progress

The second fallacy is almost as pervasive: mistaking process for progress.

Of course, this isn’t restricted to business. Nations can suffer from the same affliction. In his recent book Breakneck, Dan Wang, a sociology Professor at Columbia, compares China's “building big at breakneck speed” with America’s lawyerly system, which is overburdened by process, “blocking everything it can, good and bad”. 

He goes on, “Every problem in the lawyerly society is worse in the UK... the Leeds tram network [was] first legislated in 1993, [but] mass transit might not come to West Yorkshire until the late 2030s.” During this time, China has built over a thousand power stations and hundreds of thousands of bridges.

HR has specialised in designing processes that look rigorous but deliver vanishingly small business value.  In common with other global businesses, a UK bank identified that the time taken in their annual performance review process cost more than the total bonus and salary increase awarded as a result⁵.

It’s not the case that all processes are bad. Some are very necessary to prevent risk: remember the collapsed Chinese bridges. The problem with the progress vs process balance is that it is out of kilter with HR worrying about preventing every conceivable mishap and preparing for every potential outlier, without recognising the clogging effect of adding process on process.

The new employment rights legislation due in the UK is likely to make this more pervasive, which is why the swift simplification and automation of what currently exists is even more urgent. However, with a cognitive bias towards adding rather than subtracting⁶ and leaders who celebrate the shiny and new but rarely congratulate people for taking something away, this is likely to be a hard lift.

Performative vs profit

The third misalignment is confusing performative with profit.

At their most pernicious, DEI programmes became untethered from business outcomes, shifting from the commercially sensible aim of widening talent pools to pursuing a social justice agenda by enforcing ever more unachievable demographic targets. 

Activist employees have successfully pressured nervous leaders to take a stance on political issues from Ukraine and BLM. For many years, questioning the trans perspective as presented by the LGBTQIA+ networks was seen as job-threatening, even though a significant number of employees quietly disagreed. Even after the UK Supreme Court ruling, which clarified the definition of ‘sex’, many organisations have held back from providing women-only spaces for fear of a backlash. It’s hard to imagine any other situation where public companies would choose to breach the law.

Pursuit of ‘equity’, i.e. equal outcomes, replaced the quest for equal opportunities, which seemed at odds with recognition based on merit or achievement. While companies that banged on about ‘meritocracy’ were often found to be using it as a smokescreen for their own prejudices, other places appointed and promoted less qualified people to demonstrate their social virtue and meet representation quotas, which created a backlash⁷.

When CEOs were more likely to be fired for mis-speaking or misbehaving than for missing their numbers, as happened for the first time in 2018⁸, they understandably redirected their attention from minding their P&L to minding their Ps & Qs.

There are notable examples of companies that grew and accessed new markets as a result of becoming more diverse, but efforts to show that diversity led to improved performance, most notably by McKinsey, came apart under scrutiny⁹. The recent decline in the number of Chief Diversity Officers and corresponding investment implies that much DEI was performative in response to what regulators, investors and some customers were demanding, rather than a critical driver of business performance. The most obviously value-creating part is getting very different people to work effectively together, aka ‘inclusion’, which has sensibly been depoliticised and rolled into business as usual.

Passion vs proven

The fourth and final unhelpful HR tendency is passion over proven.

$50bn pa is spent on wellbeing programmes despite three large-scale, longitudinal studies revealing that these corporate initiatives have no significant impact on employees’ health or wellbeing¹⁰.

Under guidance from HR, over two thousand CEOs endorsed pledges involving billions in investment for unconscious bias training¹¹  despite little credible evidence of its effectiveness. Contemporaneous studies, found no positive effect¹². More recent evidence has revealed the programmes not only ineffective, but also harmful, deepening polarisation and provoking backlash.¹³

Authenticity isn’t a level playing field: the risks of ‘bringing your whole self to work’ fall disproportionately on people with less power, less protection, and less access to informal guidance.

Many HR leaders have gone hammer and tongs after a wholesale transition to become a ‘skills-based organisation’.  While a few have had success in pockets, usually in IT and Ops, many more have been bogged down in defining taxonomies and acquiring new human capital platforms that have yet to see sufficient employee usage to cover their cost¹⁴. Financial returns on this latest HR fad are hard to find, except for the consultancies that promoted them.

Another endemic passion is to build it ourselves. Rather than go with what has worked effectively elsewhere, albeit with a company-specific wrapper, the preference tends to be to create a custom solution even when it takes longer, costs more and carries a greater risk of failing to deliver. “If we went with off-the-shelf solutions, what would be the point of my job?” a client once asked me. Well…

Wake-up call

A clear sign that CEOs are waking up to the lack of commercial focus is that they are increasingly replacing CHROs with business leaders without an HR background. The brief is to ensure that HR avoids fads and focuses on the fundamentals that will drive performance. It doesn’t always work out so well in practice, but you can feel the itch that CEOs are so keen to scratch.

Moderna has taken things even further by combining its HR and IT functions. As AI accelerates, many of us may find that our ‘boss’ is a bot, and success will hinge on how effectively people and technology work in harmony. It’s not yet clear whether the solution is uniting these two disciplines, but it does signal that CEOs are ready to reconsider where HR belongs.

While it’s conceivable that HR will lose its seat on the Executive and revert to its more passive role, this would be the wrong answer. For most companies, payroll is one of the largest items on their P&L, and someone needs to be responsible for the return on this investment. 

CEOs consistently identify leadership bench strength as one of their most pressing capability gaps, and 74% report a broad shortage of skilled labour, almost double the level a decade ago¹⁵. Boston Consulting Group notes that realising the value of AI is “30% tech stack and 70% talent stack”. And while Peter Drucker never actually said, ‘culture eats strategy for breakfast,’ the phrase endures because leaders, regulators, and entrepreneurs recognise the underlying truth: sustained performance depends on people and culture at least as much as on technology or strategy.

What to do (and stop)

As pioneering CHROs in the world’s most ambitious companies have already realised, the answer is to reinvent HR from the ground up.

The starting point is agreement with the CEO on what success looks like. To keep it simple and commercial, you could do worse than variants on these two:

• Positive trend in Profit/EBITDA as % payroll

• HR headcount <1% of workforce

Of course, these won’t be perfect for every business. The first won’t lend itself so easily to companies with heavy capital investment, which is off the P&L. The second could be worked around with massive outsourcing or the use of consultants, but that doesn’t address the issue. But at least these, or others like them, would signal that HR is resolutely focused on business impact.

Following the spirit rather than the specifics of these two measures, here is what the most farsighted HR leaders are already up to.

First, HR headcount as % percentage of the total workforce means fewer people and those who are there will need to have greater skill and will be better paid. It needs to be populated by data analysts, AI ninjas, behavioural scientists and system integrators. 

Secondly, new HR does far less, and what it does do will be driven by data for what works. 50% of CHROs admit they could stop doing some things without it affecting business performance¹⁶, so get culling.  

This is easy to say, but as business leaders in all functions have discovered, you get little credit and a fair amount of opprobrium when you cut something which someone, somewhere, thought was a good thing. Praise goes to those who add something far more lavishly than to those who take away. 

Nonetheless, here are nine HR sacred cows that bold HR leaders, with the backing of their leadership colleagues, can remove or reduce without harming business performance, and in some cases, improving it:

1. Diversity targets

Focus on inclusion and respect for diversity of ideas, whoever they come from.

There are only nine organisational values that make up 95% of all company values. Pick the ones you like and stick with them. Use scientifically validated competence models rather than DIY.

3. Annual employee attitude surveys

Don’t delay with endless analysis and dancing around decimal points. Get on with what you know needs to be done. Use pulse surveys if you’re really not sure, but best of all, maintain an open dialogue through managers and internal influencers.

4. Mass eLearning libraries

Unless there is a correlation with adoption and performance, cut them. Learning should be tied to live business priorities.

5. Generic team building workshops

Unless they address a real performance constraint and lead to a shift in KPIs, they’re corporate theatre.

6. Wellness initiatives

Stop offering meditation apps and yoga classes. Fix the conditions that make people unwell and unproductive.

7. Large scale HR led redesigns

Changing taxonomies and role architectures rarely change performance. Plenty of companies have been mired in the transition to skills-based hiring without seeing a return.

8. “We’re different” bespoke HR

Adopt proven solutions and wrap them in corporate colours if needed. Customise as little as you can get away with.

9. HR tech without high adoption or measurable ROI within 12 months

If it doesn’t reduce transaction cost, cycle time, or management burden, it’s expensive noise.

There is essential HR, such as flawless payroll, regulatory compliance and employee relations, which will increasingly be delivered through standardisation, automation and a small number of high-quality experts. These need to be cost-efficient, disciplined, and boringly reliable. While they are all completely necessary, like IT infrastructure, they aren’t sufficient to merit a seat on the Executive.

Strategic HR should focus on generating value through five fundamentals, and nothing else.

1. Performance culture. Only excellence is good enough. Everyone is selected and supported to deliver to high standards and moved on if they consistently miss. Optimise workflow rather than obsessing about organisational structure. Think Netflix and Apple.

2. Leadership and management capability. Leaders have the psychological wherewithal to engage, mobilise, and deliver performance and to use the tensions inherent in business (e.g., perform and transform) as a positive force to accelerate impact.

3. Business transformation acceleration. Employees are excited by the strategy and committed to their role in delivering it. The cycle of learn, adapt, act, happens faster and faster. People embrace change rather than feeling overwhelmed.

4. Top talent attraction, assessment and retention – using validated diagnostics to identify which roles are most critical, who is most likely to succeed, and how to get them to join, perform and stay. Elite sports teams are built like this.

5. Robust data: Where Marketing has transformed into being evidence-driven, HR needs to follow. For example, robust diagnostics with competencies predict leadership performance far more accurately than in-house creations. If regulators want to be helpful, they would be better off creating consistent definitions for measuring absenteeism and turnover than creating new, often misleading ESG metrics.

Companies get the HR they deserve. If HR has been distracted, it’s because the CEO and C-suite allowed it, but it will be HR professionals who carry the consequences. 

The keynote question at my last conference was: ‘Is HR killing business?’ If HR doesn’t change its current playbook, many more people will be asking the same question.

References

[1] Bureau of Labor Statistics (2025); British Labour Force Survey (2025)

[2] Bloom, N. and Akan, M, Stanford University (2025)

[3] HR Acuity (2025)

[4] Carroll and West (2008)

[5] More Harm Than Good: The Truth About Performance Reviews. Gallup (2019); Reinventing performance management processes, Deloitte (2025); MindGym Financial Services client

[6] Subtract: The Untapped Science of Less, Leidy Klotz (2021)

[7] Showkat, M (2025)

[8] CEO Success study, PWC (2019)

[9] Green, J., & Hand, J. (2023)

[10] Barankay, I., & Cappelli, P. (2022); Reif, J., Chan, D., Jones, D., Payne, L., & Molitor, D. (2020); Flemming, W, Oxford University (2024)

[11] ceoaction.com/pledge

[12] Atewologun, D., Cornish, T., &; Tresh, F. (2018).

[13] Getting to Diversity: What Works and What Doesn’t, Frank Dobbin, Alexandra Kalev (2022)

[14] Zielinski, D. The Biggest Reason Why New HR Technology Implementations Fail. Forbes (2022)

[15] Manpower Group global survey (2025)

[16] MindGym HR leaders survey 2024