What's keeping HR leaders up at night?

By Jess Fuhl, Director Product Marketing, Sage

February 9 2023 - After supporting organisations to navigate the turmoil of the global pandemic, HR leaders are now naturally concerned about the impact of the worldwide economic downturn on businesses and their employees. Changing perceptions about the value of HR and creating resilient, highly efficient People functions are big jobs too.

So, it's no surprise that 95% of HR leaders say a career in HR is simply too much work and stress these days, with 81% admitting they're burnt out. These are just some of the findings of Sage's new annual research report, 'The changing face of HR'.

The changing face of HR: About the research

We spoke to over 1,000 HR leaders and c-suite executives from small and medium-sized organisations across the world to get their candid thoughts on the sector today; what's keeping them up at night, and what they need to solve the challenges they're facing. The answers provide a 360-degree view and up-to-date snapshot of the changing role of the profession.

The good news

Although Sage's research revealed a plethora of things keeping HR leaders up at night, it's not all concerning news. Despite 66% of HR leaders saying they're worried about the future, they also feel energised; 91% told us they're excited about the future of HR.

Furthermore, despite HR feeling the pressure of workloads, 57% say they love their jobs and working in HR.

HR leaders also told us they're adapting to become more agile, as the profession evolves in the changing world of work. 86% of respondents said they're organised for speed, efficiency, and adaptability - and 81% of the c-suite agree.

In addition, there was widespread agreement across the c-suite that HR have the skills to become CEOs. 95% of current CEOs believe this, as do 94% of CFOs.

On the other side, here's what HR leaders admitted to keeping them awake at night...

1. The economy

Unsurprisingly, 93% of HR leaders told us they're worried about the economic climate, and both HR and the c-suite predict economic uncertainty will be a significant challenge for HR in the years ahead.

Over the coming months, HR leaders will have to manage costs tightly, consider innovative ways to increase compensation through variable cost incentives, and find creative ways to engage top talent, like compressed hours and flexible working. Keeping close to business leaders with relevant data and insights will also be vital.

2. The volume of work

92% of HR leaders say the sheer amount of work is a big barrier to future success. 91% say the scope of HR's remit has changed dramatically over the last few years - and 96% of the c-suite agree. Our research also revealed that HR teams feel they're spending too much time on paperwork, and not enough time on their people strategy. 73% of HR leaders told us they are still process driven rather than strategic and people focused.

With only 59% of respondents using cloud HR technology, and just 54% having some form of automation, technology will be a vital way to tackle these challenges effectively. By automating admin, HR can spend more time on the strategic. Self-service also empowers employees to own their data and spares HR from some of the legwork.

3. Squeezed budgets

90% of HR leaders say limited budgets are a top challenge, and 83% feel downsizing is a key concern. At the same time, 91% tell us that uncertainty will remain an ongoing challenge for HR in the near future.

4. HR resource and skills

89% of HR leaders are concerned they don't have enough resources in their team, and 87% think their teams are missing the right skills. At the same time, 83% highlight a lack of the right HR technology and systems as a top challenge.

The top three skills HR told us they require most in their teams are leadership and management, teamwork, and coaching, mentoring, and training facilitation skills. The c-suite told us they also want to see a focus on financial and analytical skills from HR teams - with both being in their top three requirements for HR.

5. HR burnout

Worryingly, 84% of HR leaders cite low morale and burnout as key concerns for the future, which shows this is likely to be an ongoing challenge. 81% of HR leaders admit to being burnt out currently.

Often seen as custodians of employee wellbeing, HR teams need to make sure their own isn't forgotten. For HR leaders, the immediate priority is ensuring their people aren't working excessive hours and are investing time in projects they feel are meaningful.

6. Lack of support from leadership

Worryingly, 83% of HR leaders say lack of leadership support is a concern facing HR and, in fact, 82% of the c-suite agree. The research reveals that, despite HR's best efforts, many c-suite execs still see their HR team as purely admin-focussed. 63% of business leaders admitted this.

Recognising the opportunities as well as threats

When HR thrives, the whole business thrives. Or as Eszter Lantos, Head of People at TCC Global, puts it: "The understanding, empathy, and other soft skills that HR leaders have are key today. Ultimately, HR are going to help companies become winners."

HR professionals are facing myriad challenges ahead. However, with the right support, a firm focus on agile ways of working, actionable insights, and powerful automation, now could be the time to shift from an admin to strategic focus, steering business strategy and ensuring long term success.

Download the 'Changing face of HR' research report in full to discover more about what's on HR leaders' minds.

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