HR transformation is considered a priority for organisations, with 81% of organisations having it on their roadmap over the next two years. However, more than three in five organisations (65%) have had HR transformation delayed.

Latest research* revealed that only 4% of organisations recently completed HR transformation, with 12% currently undergoing operational changes. Half of C-Suite (50%) and HR managers (52%) agree that costs and budget constraints are the biggest challenges.

Whilst C-Suite and HR managers agreed on other most pressing barriers, such as ‘Complexity of the task’ (50% and 44% respectively) and ‘Completing priorities/projects’ (31% and 33% respectively), the most considerable misalignment occurred in understanding the availability of resources and/or time to implement operational changes. Whilst over half of HR managers (51%) flagged it as an issue, only 34% of C-Suite considered it a barrier to successful HR transformation.

Michael Campbell, Commercial Director at AdviserPlus, experts in employee relations management, said: “It’s concerning to see that whilst the perception of barriers aligns, there is a disconnect in awareness of the resource pressures HR teams are under. Any transformation project will only be as successful as those responsible for implementing it, so this gap in understanding the resource issue could be a significant barrier to success. The misalignment must be addressed to ensure HR transformation initiatives can be successfully implemented.”

When considering the biggest drivers of HR transformation, changes to the working environment were considered the highest challenge by both C-Suite (59%) and HR Managers (55%).

Campbell explained further: “The results suggest that the complexity brought by hybrid and remote working is a significant pain point for both HR teams and business leaders. In addition, the ‘Changing recruitment market’ and ‘Changing diversity and inclusion needs’ are also significant drivers, which again point to challenges created by changes in the motivations of employees, as we’ve seen with The Great Resignation and quiet quitting trends experienced in 2022.

“However, with the right HR transformation strategy delivering better employee engagement and freeing HR teams to be more strategic, these factors can be positively impacted.”

Answers were analysed from 100 C-Suite leaders and 120 HR managers from businesses with 1,000+ employees to understand the drivers of HR transformation and the barriers to implementation.

“Interestingly, 4% of organisations claimed to have completed HR transformations. As organisations and the needs of people within it continuously evolve, HR transformation isn’t ever really complete,” concluded Campbell.

*Conducted in partnership with the Empowering People Group and AdviserPlus

HR Transformation Conundrum Research