The skills gap threatening HR’s seat at the C-Suite table

How HR’s lack of business acumen and systemic perspective is leading to second-class status, and what we can do to deliver real business value

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“It sounds like you need a competent Head of Operations who also excels in management skills.” More and more often in the past year, this has been my answer to CEOs who contacted me asking for referrals for their HR Executive roles. Before referring someone, I try to understand the challenges the company is facing and what they expect from this person, and together, we think about the skills needed for the role.

These CEOs seek HR professionals with business acumen, structured problem-solving, trade-off analysis, risk management, and deep business knowledge. Instead, they find HR pros who rely on traditional playbooks for no particular reason other than "this is how things are done", apply frameworks without fully understanding specific business problems, and struggle to engage with other business areas from a place of knowledge and dialogue. This often makes them appear idealistic, impractical, and risk-averse.

During the pandemic, HR had a golden opportunity to secure a permanent seat in the C-suite. The crisis demanded a lot from HR top management—navigating new remote work models, ensuring employee well-being, managing layoffs and furloughs, and developing strategies for business continuity. HR professionals were then required to manage dispersed teams (or drive return-to-the-office strategies), adapt to changing regulations, and leverage technology for seamless operations.

However, as the immediate crisis waned, it became evident that the skills developed during this period were insufficient to sustain HR’s elevated role. We failed to fully embrace and integrate critical skills such as digital proficiency, data literacy, and strategic business acumen. These competencies are essential for HR to contribute meaningfully to complex business problems and align HR strategies with broader organizational goals.

Unfortunately, in some companies where HR has a C-suite role, it holds a second-class status, perceived as less strategic than other functions. In others, there has been a growing movement of professionals from operations, finance, project management, and management consulting stepping into HR roles. While this isn’t entirely new, the trend is accelerating, and more C-level executives are interested in this shift. The diversity of skills from these professionals is not a problem — in fact, it can be an asset. But the perception of HR professionals needs to change; we need to change it.

To truly elevate HR, we must understand and address the tough feedback we’re receiving from company leaders: the skills traditionally found within HR are no longer sufficient.

We must focus on several key areas:

1. Business Acumen: HR leaders need a deep understanding of the business they serve. This means knowing how the business operates, its goals, its key metrics and performance, and, ultimately, how HR can contribute to achieving them. This approach helps us abandon the firefighting mode we usually operate in and work towards the future, building the business it aspires to be.
2. Systemic perspective: Moving beyond delivering flawless operations, HR leaders must think and act strategically. This involves developing and implementing policies that align with the company’s strategic goals and adapting to changing business environments. It also includes trade-off analysis and risk management to make strategic decisions that balance short-term needs with long-term goals.
3. Data Literacy: The ability to interpret and use data effectively can help HR leaders make informed decisions that align with broader business objectives. Data-driven strategies can enhance everything from talent acquisition to employee engagement.
4. Influence and Critical Thinking: HR leaders must be able to identify opportunities, articulate problems and solutions, and promote change effectively. This requires strong communication skills and the ability to influence others within the organization.
5. Digital Proficiency: Understanding and leveraging digital tools is crucial. This includes everything from HR software to AI-driven analytics that can provide insights into workforce trends and productivity.

By addressing these areas, HR can transition from being seen as a support function to a true business advisor. This shift is not just about gaining a seat at the table but about actively contributing to the company’s success.

As HR professionals, we bring unique traits to the table, but we risk falling behind if we don’t evolve. Let’s use this as a call to action to develop the necessary skills to reclaim and solidify our place at the strategic decision-making table. Additionally, I invite HR leaders to think about how we are developing our teams — the next generation of HR leaders — to keep the discipline relevant and effective.

Reflecting on this shift, what are your thoughts? How can we bridge this gap and ensure HR remains a vital part of our organizations?