HR Has a Bad Reputation: 6 Actions To Improve HR Credibility

According to a recent survey, 30% of small business employees express distrust towards their HR departments, with a further 40% questioning the objectivity and impartiality of HR professionals. AIHR’s State of HR report highlights how historical perceptions have painted HR negatively and continue influencing today’s view of the function.

In this article, we explore the drivers of HR reputation, its influence on our credibility, and the actions required to move forward.

Contents
Why does HR have a bad reputation?
Should we care about the HR reputation?
How to establish credibility to improve HR’s reputation

Why does HR have a bad reputation?

Reputation is the beliefs and opinions others hold based on past behaviors or experiences. For HR, reputation refers to employees’ perception of their satisfaction with HR services, how HR is positioned in the organization, the skills and abilities of HR professionals, and the trust in the HR team.

Four realities currently influence HR’s reputation:

Reality 1: A lot of people have had a lousy HR experience in the past

The unfortunate reality is that many employees have had a less-than-stellar experience with HR at some point in their careers. Whether this has been due to a lack of feedback during a recruitment process, an administrative error when changing employee details leading to lack of payment, or not feeling adequately supported through HR advice.

Some of the criticism is warranted. Similar to functions dealing with clients or customers, HR had to professionalize how it provides services to employees and the underpinning processes and technologies to drive a good experience. However, this is only half of the story.  

HR professionals often get blamed for things that go wrong beyond our control or, even worse, not our responsibility. The fact that HR is seen as a custodian for practices such as performance, talent, and rewards does not imply that HR is the sole decision-maker in executing these practices. Often, the challenge is more related to line managers not being equipped to run people processes effectively, leading to blame being put at the door of HR.

Reality 2: People enter HR from various backgrounds, leading to a lack of baseline skill

HR professionals enter the profession from diverse backgrounds. As much as this is beneficial for the diversity of skills, there is not necessarily a consistent baseline of skills at junior levels of HR teams. This poses a challenge regarding the consistency of HR competence when compared to professions such as accounting, where formal standards and practices guide career development,

Several HR professionals enter from social sciences and education, bringing strengths related to practices such as learning and development. Yet, the basic knowledge of the HR value chain is not there.

Our State of HR report also found that some individuals move into HR later in their careers, bringing a wealth of business knowledge yet lacking basic HR expertise.

“HR has a little bit of an image problem. What really surprised me is how people get into the HR profession. It’s a lot later on average than in other functions such as, say, admin or finance or marketing, or any of the other big corporate functions. People seem to really stumble into HR, so those entries aren’t necessarily as planned as you think”.

Dr Lisa Simon, Chief Economist at Revelio Labs

Reality 3: HR is under-resourced with people and systems

HR is often expected to drive impact while not receiving adequate investment and resources to execute. HR is the function that receives the least investment, with HR headcount not proactively prioritized and lagging behind business growth.

Organizations also often do not invest in HR technologies to support transactional work, leading to many manual processes being executed with too few resources. This can lead to slow responses, high levels of burnout in HR professionals, and dissatisfaction with HR delivery within the wider organization.

“As organizations grow, the problems grow more than proportionally. Now, you have to worry about workforce planning retraining. So, this requires organizational skills at a much larger level. But what we see is that once companies hit a certain threshold, the HR team is not growing at the levels that you would expect, given the challenges that they face.”

Dr Hakki Ozdenoren, Senior Economist @ Revelio Labs

“We need to look at what HR needs to deliver — what are those skills? Sometimes, you need more of a particular skill, depending on where the organization is at. What was interesting for me from the investment conversation is seeing how HR compares to other functions. If you look at marketing and administration, HR is always the smallest little slither of the pie chart.”

Dr Marna van der Merwe, HR Subject Matter Expert at AIHR

Reality 4: The current perception of HR stems from its history as an admin function

When discussing HR reputation, we also need to consider the history of the function and its origins.

Even though HR today has evolved into a very different contributor than 100 years ago as part of the labor movement, many individuals still hold on to the “hiring and firing” perception of HR.  HR is often seen as representative of line management and as the “No” people in the room, acting more as a hindrance than an organizational enabler.

When reviewing these realities, feeling despondent as an HR professional is tempting. HR professionals often grudgingly accept these realities, and they do little to eradicate these misperceptions. Instead, they become numb to the criticism and usually see it as part of the job.

Given this mindset, it begs the question: Should we be concerned about the reputation of HR? Is the nature of the HR role one that will never be seen in a positive light?

Should we care about the HR reputation?

Stakeholders are selfish about their needs and less concerned about HR’s value to the broader organization.

For example, line managers are pushing HR to recruit faster for their roles, which might mean less focus on a critical candidate evaluation. Employees want HR to be responsive to their queries, while this inevitably means that they are not attending to others. Executives want HR to focus on culture, engagement, and talent succession without necessarily playing their part in shaping these practices.

These expectations position HR between a rock and a hard place. Pleasing one stakeholder inevitably leads to disappointing another. In many instances, HR is a thankless profession – never receiving recognition for a job well done but receiving criticism when things don’t go according to plan.

HR professionals must let go of the idea that positive feedback is the only success metric. Many HR teams measure their success through high levels of satisfaction with HR services, the achievement of positive eNPS scores, and positive stakeholder feedback.

However, the real success of HR should be measured differently and in line with the business outcomes and impact, not against the subjective perceptions of various stakeholders.

Strive for credibility not affirmation

We would argue that HR needs to strive for credibility rather than affirmation. Ulrich coined the term “Credible Activist” as one of the essential qualities of successful HR professionals. Let’s break this definition down:

• “Credible” refers to an individual who can be trusted, has influence over critical stakeholders, and earns credibility through their ability to contribute and add value to their stakeholders.  
• “Activist” refers to the ability to proactively advocate for their stakeholders’ requirements while keeping the business’s overall intent in mind.

The balance between credibility and activism is essential, as a lack of activism leads to HR professionals who have a lot of knowledge yet cannot translate it into real value. Inversely, without credibility, activism leads to HRBPs not being taken seriously, even though they might have good ideas.

As you can see, nothing in this definition is about HR being “liked” or that a positive rating from a business leader measures our value. Building credibility is highly dependent on managing the perceptions and reputation of HR within the organization, leading back to our initial challenge – HR has a bad reputation.

We discussed the state of HR, its reputation, and the future outlook with Lisa Simon, Chief Economist at a workforce intelligence company Revelio Labs, Hakki Ozdenoren, Senior Economist at Revelio Labs, and Dr. Marna van der Merwe, AIHR’s HR Subject Matter Expert.

How to establish credibility to improve HR’s reputation

HR needs to take several actions to establish credibility and improve the reputation of their function.

1. Shift stakeholder expectations of value

Stakeholders perceive HR based on their previous experiences with the function, and how HR has historically been positioned within the organization. More than 60% of business leaders still see the role of HR as administrative, with many not being educated to expect something different from HR today.

The top priority for HR must be to clarify stakeholder expectations of the function and align the value HR offers with business outcomes.

2. Legitimize the HR function within the business

For HR to change the perceptions of the past, the function needs to be legitimized. Legitimization means the positioning, power, and authority of HR within the organization. Not including HR in crucial strategic decisions or excluding HR from business activities creates a perception that HR is only there for reactive administrative work.

As a starting point, HR needs to work with the business to clarify the HR mandate and positioning within the organization. This could require education on new HR capabilities that the business might not have been exposed to, as well as demonstrating other case studies of how HR has contributed to similar organizations.

Even though this is difficult, the HR leader needs to have a candid conversation with the CEO about the role of HR, its mandate of operations, and how it should be positioned within the business. This can only happen if there is an existing relationship between these parties — if not, then building a relationship of trust should be the first step towards legitimizing the business.

3. Set clear standards and target experiences of HR solutions and products

Employees act more like consumers and evaluate HR products and services similarly. HR needs to set transparent service standards about the employee experience that are reasonable to expect.

Utilizing data to demonstrate how HR is meeting its commitments is also important. Here, stakeholder feedback and satisfaction metrics can be valuable. However, they must be measured against a benchmark of set criteria, not individual employee opinion.

The business and HR should agree upon acceptable standards. HR should also benchmark their processes and practices against the market.

4. Share HR success stories and visibly show progress

HR professionals are too humble about their contributions and rely on others to ratify their value.

As an output of setting clear expectations, organizations also need to give HR “permission” to share its impact and not be afraid to claim their contribution. In the past, there has been a narrative that HR is in the background, and its contributions are less visible and deemed less important than those of other teams.

Several factors influence HR results, but using data and metrics, both quantitative and qualitative, can enable HR to drive informed conversations on the function’s performance.

5. Build the skills and competencies to equip HR professionals to deliver

While the expectations of HR are changing, the skill set has not necessarily evolved. 

Skills related to data literacy and digital agility are still lacking, and many HR professionals still report higher confidence in interpersonal than business-related skills. Requirements for HR skills are not clearly articulated, often leading to a mismatch between available skills and the organization’s requirements.

At AIHR, we believe that HR professionals need to be T-shaped and build both breadth and depth of skills to be effective in the future world of work.

6. Balance the investment in HR with the desired impact

Similar to any other business function, if HR is expected to drive strategic value, execute at scale, and provide services to a complex workforce, it requires the right structure, skills, and systems investment to make that a reality.  

As a first step, HR can establish the same financial discipline as any other business function by collaborating with finance to gain a deeper understanding of financial forecasts, budgets, and operational costs. Creating a baseline and demonstrating the spending and impact of HR is essential for facilitating robust conversations about future investments.

HR also needs to work with the business to develop robust business cases where investment is required. For example, when considering implementing an ERP system, the business case should clearly show the required return on investment and the anticipated savings or value gains and provide a clear financial roadmap to obtain these investments.

Over to you

We can no longer ignore HR’s bad reputation. HR leaders need to take action by becoming credible activists for the profession, being respected for their contribution, and educating stakeholders on the role and impact of modern HR practices.

As the role and scope of HR continue to change, organizations need to ensure that they clarify expectations and set HR teams up for success.

Dieter Veldsman

Chief HR Scientist

Dr. Dieter Veldsman is an Organizational Psychologist with 15+ years of experience across the HR value chain and lifecycle, having worked for and consulted with various organizations in EMEA, APAC, and LATAM. He has held the positions of Group Chief People Officer, Organizational Effectiveness Executive, Director of Consulting Solutions, and Chief Research Scientist. He is a regular speaker on the topics of Strategic HR, Future of Work, Employee Experience, and Organizational Development.

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