HR is being held back from delivering important strategic value to their business, as half (50%) of C-suite executives admit they don’t know how to use their HR team as effectively and strategically as they’d like to.

That’s according to the latest research from Personio, Europe’s leading HR software company for small and mid-sized businesses, which surveyed 500 C-suite level executives and 1,000 HR decision makers at SMEs in the UK and Ireland.

Over half (55%) of C-suite executives state they are behind where they need to be to navigate current and future workplace challenges, including managing an increasingly fragmented multi-generational workforce, providing on-going support during the cost of living crisis and fostering more diverse and inclusive organisations. But C-suite executives are currently under-utilising their HR teams as a strategic function to help navigate such issues. Over half (54%) state they only see HR’s strategic value at times of crisis – such as during the Covid-19 pandemic or when there are talent shortages.

Meanwhile, highlighting a disconnect between C-suite executives and HR teams, two-thirds (66%) of HR professionals say they want to play a more strategic role in the business. HR teams have direct insights from employees on key topics such as how to maximise employee engagement, or how best to communicate new company goals, which business leaders often lack. But they are facing a myriad of challenges when it comes to supporting the business’s success, with 31% citing too much administrative and process driven work as a key barrier, while 29% cite poor collaboration with their senior leadership team.

Pete Cooper, Director of People Partners & Analytics at Personio says: “Our research highlights a significant disconnect between the C-suite executives and HR teams. While HR teams more than proved their value in navigating businesses through crisis periods during the Covid-19 pandemic, in the long term the function is underestimated, underappreciated, and underutilised at too many organisations – preventing HR teams from fulfilling their strategic potential within the business.”

Despite a current lack of communication, both HR and C-suite executives are eager to collaborate more effectively. To help C-suite executives realise HR’s strategic value, there are some levers HR teams can deploy. Two-thirds (67%) of C-suite executives want to have a better understanding about what their HR team does, and three quarters (75%) say it would be beneficial for HR to demonstrate their contribution to business success, highlighting that by tangibly demonstrating their achievements and impact HR can prove their value.

Pete Cooper continues: “It is clear that positive progress is underway, as the C-suite are beginning to recognise the importance of HR to business success. After all, HR can support executives in many ways – for example by using their employee insights to build a strong people culture, to support with implementing pilots on new ways of working and also to provide business leaders with analysis and context around attrition data.

“But this more strategic HR role can only be achieved once HR have been freed from their administrative burden and been given the opportunities to be effective. It’s time for the C-suite to recognise there is space for HR at the table.”