HR roles are still missing from the C-suite — and it could cost companies in the future

If the last two years have made anything clear, it's that without a functioning HR department, employees' needs tend to fall through the cracks.  

The role of CHRO is now a top-tier executive role, yet still, one in four Fortune 100 companies have no people leader in the C-suite, according to a recent report from software company BambooHR, and only 35% of startups have any kind of HR support at all. Apple, a major employer with nearly 164,000 employees, just announced the hiring of their first-ever chief people officer.

How are organizations functioning without these vital roles? It may be because CEOs don't understand just how pivotal they are to a company's success, while HR leaders may not have the acumen to get there in the first place, says Anita Grantham, head of HR at BambooHR.  

Read more: Is your CHRO poised to become CEO? How the pandemic changed C-suite succession

"Very few CEOs know how to leverage the role strategically but also, most HR practitioners only know what to do tactically," Grantham says. "To get to the C-suite, HR people have to be judicious with spending and see themselves as accountable for the numbers on the balance sheet. If they aren't, they won't be relevant at the table where these financial conversations are happening without them. C-suite leaders have to be able to talk about how their role impacts the bottom line."

Much of this disconnect has to do with the way the workplace still views HR roles as limited to payroll and compliance. While those responsibilities have multiplied exponentially during the pandemic, with employees expecting more support and guidance from their HR leaders in both work and life, the burden of the old mentality could be holding HR professionals back from climbing the corporate ladder — and employers from seeing them as capable of doing it.  

"HR often still gets bogged down with tactical responsibilities," Grantham says. "We have to find ways to relieve HR of the paperwork and the administrative minutia so that they can do their best work, adding strategic value and building employee experiences."

As for the smaller companies who don't have an official HR department, the lack of a formal position doesn't necessarily mean that they haven't filled the role. Smaller organizations like startups are rebranding human resources: 39% refer to HR professionals with titles that touch on employee experience — such as chief people officer, head of human capital management, or chief of staff, BambooHR data found.

These title changes not only relegate some of the traditional HR responsibilities to managerial roles across departments, according to Grantham, but also appeal to more potential applicants as they search for jobs. 

Read more: How to recruit and keep top talent in 2023

"The term 'HR' has become antiquated and is almost seen as a negative by some," she says. "Companies are making attempts to rebrand what people see this function focusing on. Ultimately the title that should stick is one that positions it as a role which improves employee experiences in ways that make a meaningful difference to its people and the bottom line of the company." 

But while companies may think they're managing these roles in a new and creative way, the need to prioritize HR strategies will only grow with time. As a recession looms and employers continue to feel the effects of the Great Resignation, it's critical for companies to adequately manage recruitment, employee engagement, compensation and benefits administration, as well as labor law compliance. 

"As a company scales, the needs for HR will differ," Grantham says. "With 50 employees or less, at a minimum, you'll need an HR software that automates workflows and helps relieve some of the pressure. But by the time you get to 120 employees, you should have a recruiting leader and at 500 or more, if you don't have HR professionals in leadership, the company will suffer."