By Paaras Parker, CHRO, Paycor
Nearly every day I’m asked about HR priorities, the future of HR, and what opportunities and challenges are on HR’s radar. I’m asked by my team, my boss, fellow HR leaders, our customers, and the press. To answer these questions in an intelligent and hopefully interesting way, I have several cheat sheets. And one of them is the survey my company, Paycor, publishes around this time every year.
In 2024, our survey got an overwhelming response—more than 7,000 professionals completed a comprehensive questionnaire that asked them about a wide range of HR issues. We heard from individual contributors, managers, directors, and C-suite executives from nearly every industry, including HR, finance, IT and operations, and more. We also heard from Paycor customers and customers of other HCM providers. There are lots of compelling findings on a wide range of topics in the report (which you can see for yourself here), but from an HR perspective—and from the perspective of someone who needs smart answers to tough questions—there is a wealth of insights about the role HR plays in the modern workplace. Here are the top three.
Nothing is more important than effective leadership.
Effective leadership drives business results—we all know that. But our survey results surprised even me, a committed believer in the obvious importance of leaders. Here’s what we found: Compared to low-performing companies, employees who work for high-performing companies are 110% more likely to get productive feedback from their managers and 397% more likely to say their company’s senior leaders are engaged and inspirational. Those are jaw-dropping numbers that reinforce something I believe is intuitively true: everyone has a boss, and nothing engages and motivates people more than a good one. But what do we mean by “good” and “boss”? By “boss,” we mean the person the buck stops with; the accountable party, the safety net who gives team members the support and air cover they need to take calculated risks, push through their comfort zones, become better versions of themselves by growing, learning, and developing. And by “good” we mean a person who is a less traditional “boss” and more of a mentor and coach, as well as a north star, who can inspire teams to work and innovate toward a common goal and succeed together.
What does effective leadership have to do with HR?
Everything. But maybe that’s too simple, so let’s unpack it. Our survey asked top-performing companies what made their leaders effective. In companies that rate their managers above average, all levels of the organization from the C-suite to individual contributors cite “high company morale and strong company culture” as the number one driver of leader efficacy. A second factor, “managers are given authority to make decisions,” appears in everyone’s top three. These two success drivers are related. A strong culture of shared values, priorities, and goals creates an environment in which decisions are easier to make (everyone’s on the same page) and easier to understand (everyone’s rowing in the same direction). If company culture is soil, what grows from healthy soil is effective leadership at all levels. And while company culture is everyone’s responsibility—“culture” is way too big to be “owned” by any one department—HR is the singular department that is most responsible for leading the conversations and cross-functional collaboration necessary to build and sustain a positive, dynamic culture. HR can’t singlehandedly “fix” a broken culture, nor can we, acting alone, sustain a healthy culture. But we can set the stage for culture’s development and ensure that the voice of the employee is heard and responded to. Our survey results on effective leadership should be encouraging to anyone in HR who is revamping their company’s performance reviews or training employees on effective communication or any other worthy initiatives. At the end of a long day, it’s inspiring to remember just how much difference effective leadership makes.
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What role does HR play in organizations that don’t have effective leaders?
In other words, if HR is uniquely responsible for effective leadership, are we equally on the hook for less effective leaders? It depends on who you ask. Our survey asked people from companies that rate their leaders and managers poorly to stack rank the reasons why their leaders aren’t so great. We found that everyone in these companies, from the VP level to individual contributors, agrees that “burnout” is the number one reason for ineffective leadership. What’s interesting is that the C-suite sees things differently, much differently in fact. The C-suite says “lack of HR support” is the number one cause of ineffective leadership. (Outdated performance management systems and ineffective training are the C-suite’s number two and three reasons.)
Here’s how I interpret these results.
First, let’s look at the silver lining. There’s no doubt that HR is perceived as a strategic partner. The divergence of C-suite opinion suggests that they see “developing managers” as an HR function. Over the years, we’ve seen the perception of HR shift, from a low in 2014 when only 38% of HR professionals said they were seen as strategic, to the post-pandemic high of 46% (Sapient HR Systems Survey). In the next 12 months, 81% of HR professionals say they plan to become a “center of excellence,” with transactional work outsourced, processed offshore, or automated by AI (PWC and HR Today). So, when people ask me, what’s on HR’s radar, one of my answers will be: strategic development of leaders at all levels of the organization.
Secondly, let’s look below the C-suite. The consensus that burnout is the number one problem suggests a disconnect between the C-suite’s corporate strategy and day-to-day realities. That disconnect between strategy and reality is a problem that a well-staffed, technologically sophisticated HR team is uniquely positioned to tackle. We’re the truth-tellers and the bridge builders, and companies that know they have a leadership problem want and need our help. So, when people ask me how HR can help improve leadership at their organizations, I’ll talk about this disparity. I’ll mention our survey results that revealed that employees who work for high-performing companies are 110% more likely to get productive feedback from their managers. I’ll also cite a McKinsey study that found that district managers devote less than 10% of their time (some as little as 10 minutes per day) to coaching their teams. If you recognize your own organization as one that struggles with burnout and a disconnect between corporate strategy and the lived experience of employees, I’d recommend you start with this. Encouraging and supporting productive feedback— including productive conversations between managers and employees —is the best way to begin building the kind of culture you need to promote effective leadership.
I could go on—and I do hope you check out the full report to discover your own insights—but in the interest of time, let me wrap up by saying we need effective leadership more than ever, and as an HR professional, you are uniquely qualified and positioned to help your organization pursue that goal. Best of luck to you and your team.
