Addressing the HR Overlook: Insights for High-Performing Teams to Enhance Impact

In today's dynamic business landscape, the role of Human Resources (HR) remains crucial yet often underestimated. A recent study conducted by isolved in collaboration with Sapient Insights Group sheds light on the significant obstacles that HR departments face in asserting their strategic influence within organizations. This report invites organizations to reconsider their perception of HR, emphasizing its potential to drive business success.

The Current State of HR

According to the report titled "Leveling the Playing Field: Unlocking Better Business Outcomes by Elevating the HR Role," nearly 3,500 small and mid-sized businesses (SMBs), which collectively employ over 25 million individuals, participated in this research. The data reveals a troubling gap between HR's intended strategic role and its actual influence. While 62% of business owners and 55% of CEOs regard HR as a strategic partner, only 23% of finance leaders and 35% of IT leaders share this view.

Moreover, even among HR professionals, only 52% are perceived as strategic within their organizations. Such statistics underscore the need for HR to transition from a compliance-centric function to one that is integral to business decision-making.

Barriers to HR’s Influence

The report identifies three fundamental barriers limiting HR's strategic impact: outdated perceptions, inadequate utilization of artificial intelligence (AI) tools, and persistent gender disparities within HR leadership.

1. Perception Issues: Despite the recognition from some business leaders, HR is often seen merely as a support function, which in turn diminishes its credibility and influence in critical decision-making processes.

2. AI Utilization: Research indicates that organizations leveraging AI in their HR functions experience an approximate 8% improvement in HR-related outcomes. Alarmingly, 25% of SMBs and 20% of mid-market companies are unaware that their existing HR technologies already harness AI and machine learning capabilities. This lack of awareness poses a significant risk of organizations missing out on the strategic advantages these technologies can provide.

3. Gender Disparities: The gender gap is stark, as men dominate strategic HR roles in publicly traded companies, occupying 86% of these positions despite women comprising over 70% of HR leadership overall. This inequality reinforces traditional perceptions of HR as transactional and diminishes women leaders' influence in shaping strategic operations.

Transforming HR into a Strategic Leader

To adapt successfully to the current business environment, HR must embrace strategic credibility. Organizations that foster cross-functional collaboration, data fluency, and workforce-centric scheduling not only enhance their image but also their operational outcomes. The report highlights that when HR functions align with business objectives and meet employee needs, they contribute significantly to areas such as profitability, innovation, and agility.

Furthermore, a shift towards an outcome-focused approach in HR can generate substantial business value. HR teams that prioritize skills development, internal mobility, and proactive workforce planning tend to see enhanced organizational performance.

Future Insights and Engagement

As companies navigate an era marked by rapid transformation and a shifting economic landscape, the demand for effective HR leadership is more critical than ever. The findings from isolved’s report also serve as a rallying cry for organizations to promote HR's strategic capabilities and enable them to contribute meaningfully to business objectives.

HR professionals can deepen their understanding of these findings by attending isolved's Connect for People Heroes events taking place in Philadelphia and Scottsdale in November 2025. These key events, featuring keynote presentations from key researchers, highlight the pathway for elevating HR's role and maximizing its strategic potential.

Conclusion

As organizations prepare for future challenges, recognizing and enhancing HR’s strategic influence is imperative. Embracing advanced technologies and fostering equity will empower HR to transform from a support role to a vital partner in driving business success. By addressing these inequities and barriers head-on, companies can unlock the full potential of their HR function.

For more insights, visit isolved's website and explore comprehensive strategies to elevate HR's impact.