Why Most CEOs Waste Their HR Function—And How to Fix It

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How HR Professionals Can Drive Strategic Priorities Beyond “Personnel” Matters

I’ve always believed that people make the difference in business—whether for good or bad. The right people in the right roles can drive extraordinary outcomes, while the wrong dynamics can bring even the best-laid plans to a grinding halt. Yet, I’ve also observed how many businesses squander the potential of a strong, operationally oriented HR professional.

Too often, HR is relegated to the rear echelons, focused on policies, compliance, and firefighting. But HR shouldn’t be confined to personnel matters—it should be forward deployed at the sharp end of the business, directly supporting strategic goals and operational needs. If businesses want a personnel manager, they should hire one and save the expense of a Chief People Officer or HR Director. But if they’re going to invest in a senior HR professional, they need to fully utilise the range of skills they bring to the table.

The challenge is that many CEOs and MDs simply don’t know how to use professional HR effectively. HR leaders often find themselves underutilised, operating reactively rather than proactively. CEOs need to ask themselves whether they are equipping their HR function to drive the business forward—or keeping them in a “personnel” box that limits their potential.

Here’s how CEOs can get HR out of the personnel shadow and forward deploy them as critical players in achieving strategic goals.

Integrate HR into Strategic Planning

The first step is to stop treating HR as an afterthought in strategic discussions. Too often, HR is brought in to “make it happen” once the plan has already been written. Instead, involve HR from the outset, giving them a seat at the table when strategy is being shaped.

  • Share the strategic priorities with your HR leader and ask for their input on how people and culture can support those goals.
  • Encourage HR to challenge assumptions about talent, structure, and resourcing that could undermine the plan.
  • Ensure HR understands the commercial realities of the business, so their recommendations are grounded in operational needs.

When HR is part of strategic planning, they can align their initiatives with the broader goals of the business, ensuring that people-related efforts are fully integrated into the roadmap.

Define HR’s Strategic Role in the Business

Many CEOs expect HR to focus on compliance, recruitment, and employee relations—important, yes, but hardly strategic. To unlock their potential, CEOs must clearly define the role they want HR to play in achieving the company’s goals.

  • Position HR as a driver of organisational performance, not just a function for “keeping the wheels turning.”
  • Align HR’s priorities with measurable business outcomes, such as revenue growth, market expansion, or operational efficiency.
  • Hold HR accountable for delivering strategic impact, not just ticking boxes.

By framing HR as a performance enabler, CEOs can push the function to rise above transactional work and deliver meaningful results.

Demand a Talent Strategy, Not Just Hiring Plans

If talent is the lifeblood of any business, HR should be the architect of how that talent is acquired, developed, and retained. CEOs must expect HR to take a proactive approach to workforce planning that directly supports the business’s strategic goals.

  • Insist on a workforce plan that anticipates future needs, not just current vacancies.
  • Ask HR to identify critical skills gaps and provide solutions to close them, whether through hiring, upskilling, or restructuring.
  • Ensure HR is building leadership pipelines to secure the future of the business.

A professional HR leader should be able to articulate how their talent strategy is enabling the business to hit its targets—and adjust that strategy as the business evolves.

Use HR to Build a Culture That Drives Results

Culture can make or break a business. Yet many CEOs leave it to chance, assuming it will take care of itself. HR is uniquely positioned to shape and embed a culture that supports the organisation’s strategic objectives.

  • Work with HR to define the cultural attributes that will drive success, such as innovation, accountability, or collaboration.
  • Ask HR to measure and manage cultural alignment across the organisation.
  • Use culture as a tool for differentiation—both to attract top talent and to retain the people who thrive in your business.

By tasking HR with owning and shaping culture, CEOs can ensure it becomes a competitive advantage, not a stumbling block.

Insist on Data-Driven Insights

CEOs rely on data to make decisions—but often, HR is left out of the equation. Modern HR should be as data-savvy as any other function, providing insights that inform strategy and demonstrate impact.

  • Ask HR for data on key metrics like retention, engagement, and workforce productivity.
  • Expect HR to use predictive analytics to anticipate challenges, such as skills shortages or attrition risks.
  • Require HR to quantify the ROI of their initiatives, showing how they contribute to the bottom line.

A professional HR leader who can speak the language of data will quickly earn their place as a trusted advisor to the CEO.

Empower HR to Lead Change Management

Strategic priorities often involve significant change—whether it’s restructuring, entering new markets, or adopting new technologies. HR should be at the forefront of managing these transitions, ensuring they succeed from a people perspective.

  • Involve HR in planning and executing change initiatives, not just communicating them.
  • Encourage HR to develop robust change management strategies that minimise disruption and build buy-in.
  • Hold HR accountable for the success of change efforts, measuring adoption rates and long-term outcomes.

By empowering HR to lead on change, CEOs can ensure that strategic initiatives are not derailed by poor execution or resistance to change.

Expect Strategic Impact from HR

Finally, CEOs must set the expectation that HR will deliver tangible, strategic results. This means moving beyond vague goals like “improving employee satisfaction” and focusing on outcomes that directly support the business.

  • Ask HR to demonstrate how their work is driving business performance, whether through improved productivity, reduced costs, or faster time-to-market.
  • Celebrate HR’s successes and communicate their impact across the organisation.
  • Continuously challenge HR to push boundaries and find new ways to add value.

When CEOs hold HR to high standards of performance and impact, they create the conditions for HR to truly excel.

Final Thoughts

Many businesses underutilise their HR leaders, keeping them stuck in a “personnel” mindset that limits their potential to add strategic value. But HR has the capability to be so much more. When fully utilised, HR can act as a force multiplier for achieving business goals—driving performance, shaping culture, and enabling change.

If you’re a CEO or MD, it’s time to ask yourself: Am I using my HR team to their full potential, or am I keeping them in the shadows of “personnel” work?

Businesses succeed or fail on their people. HR has the potential to tip the scales—but only if they’re given the tools, mandate, and trust to lead from the front.

This guide is part of NorthCo’s Leadership Series—designed to help leaders unlock the full potential of their teams. Subscribe to our newsletter for actionable strategies and insights that keep you one step ahead.

About the Author

Trevor is the Managing Partner of NorthCo, a fellow of the Institute of the Motor Industry and a member of the Institute of Interim Management. Trevor is a respected C-Suite leader, Chairman and professional Interim Leader. For over a decade, he has provided interim leadership solutions to private equity, venture capital, and asset-backed firms. Whether it’s to stabilise a business during a turbulent trading period, fill a temporary skills gap or support a management team to navigate challenging situations, Trevor’s wealth of experience and proven track record in delivering value creation and retention plans demonstrate his ability to lead and support operational management teams effectively. To find out more about his approach, explore his LinkedIn profile and read what others say about Trevor.

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