Research finds 45% of HR professionals report increased pressure to justify programme spend, while just 27% believe C-suite recognises HR’s impact on business revenue.
The annual State of People Strategy Report*, featuring insights from a survey of over 1,000 HR leaders and teams from companies around the world. The exclusive research explores the state of HR teams after another turbulent year and how they’re setting goals and priorities for the year ahead. It also uncovers a fundamental disconnect between HR and the C-suite that could be making it more difficult for teams to demonstrate and communicate the value of their work.
The good news: In the face of a lot of uncertainty in the job market and the economy, HR teams overall are holding steady and there is reason to be optimistic. Even as they bear increased pressure to drive results amid shifting business priorities, they are meeting their goals, feeling engaged in their jobs and overseeing stabilising budgets.
Yet confidence in their day-to-day is not always translating into conviction in demonstrating and translating the impact of HR programmes on the bottom line.
“Successful people teams and leaders are increasingly those that are able to not just take a seat at the table, but really demonstrate the strategic potential of the function, implementing programmes and making decisions that move the needle for employees and drive business results,” said Cara Brennan Allamano, chief people officer at Lattice. “This year’s State of People Strategy Report reveals a missing link for some HR teams in demonstrating those business outcomes. We hope that by exploring some of the reasons behind this and how teams are overcoming it, we can help more HR practitioners prove the value of their work as absolutely crucial to the business.”
From strengthening C-suite relationships to reimagining the connection between performance and engagement, there is a lot on the minds of high-performing HR teams this year. Key findings from the 2024 State of People Report include:
Performance and engagement tied as HR’s top priorities for 2024
For the third year running, employee engagement topped the list as a leading priority for HR teams – but this year, it tied for the first place spot with performance management, which saw a 40% increase compared to 2022.
Likely driven by a newfound focus from leaders and businesses on productivity and business performance in the wake of layoffs and a rocky economy, this finding also reflects the shared belief of HR professionals that engagement and performance should be considered and managed in harmony.
A troubling disconnect between HR and the C-suite
According to many of the HR leaders surveyed, there are critical gaps in alignment between HR teams and the C-suite – both in executive leadership recognising the importance of priority HR programmes and initiatives and understanding the value HR was providing to the business. Among the respondents:
- Just 48% say their C-suites take the data from employee surveys seriously
- Only half say their C-suites recognise that a positive culture leads directly to better business outcomes
- And most worryingly, just 27% felt that company leadership believes in HR’s impact on business revenue.
This disconnect is also driving a significant difference of opinions around layoff recovery, something many teams faced this year and will continue to navigate moving forward. A significant majority of HR leaders (74%) said it takes between four months and up to a year for employee morale and productivity to bounce back after a layoff, while most said that their C-suite (66%) expected a full recovery within three months or less.
HR teams show resilience in a difficult year
Despite a challenging year of economic turbulence and mass layoffs across industries, many HR teams remain confident in their job security, budgets, engagement and outlooks for the year ahead. Our research found:
- 64% of teams feel engaged with 65% feeling confident about their job security
- 79% said their budgets are the same or increasing, while 86% reported a flat or increasing headcount
- And many HR teams are innovating in the way they get the job done with 76% proactively looking to incorporate AI solutions into HR workstreams.
High-performing teams reveal their secrets to successful business outcomes
Lattice’s research found that high-performing HR teams (those who reported exceeding their goals) also had a better partnership with their C-suite leaders: 82% of these teams were confident in connecting their work to business outcomes (compared to just 58% of low-performing teams) and they were much more likely to report that their C-suite recognised the impact of a positive workplace culture (62% vs. 44%).
High-performing teams are also:
- More likely to have increasing HR budgets for next year (62% vs. 24%)
- More likely to put more effort into DEIB programming and policies (39% vs. 13%)
- And 2.6 times as likely to be using performance management software
About the Survey*
The 2024 State of People Strategy Report is from Lattice and features survey responses from 1,052 HR professionals collected between July 18 and August 28, 2023. Respondents work across various industries and company sizes, with job titles ranging from HR generalist to chief people officer. They come from the US, Canada, the UK, Germany, France and other global markets.
full report here.
