Why HR Isn't Invited to the Table Where Decisions Are Made

In most companies, the HR director formally belongs to the senior leadership team. In practice, they remain on the periphery of decision-making. This isn't a matter of title or tenure. It's a question of the level at which HR operates within the business management system.

A close look at the career trajectories of strong HR leaders in global companies reveals a pattern: the market effectively operates on a three-tier model of HR directors. These tiers differ not in team size or budget, but in how HR understands the business and where they sit in the power structure.

Level One: Operational HR as a Service Function

This is the most common level—and the most dangerous one, because this is where most HR professionals get stuck.

Level-one HR is responsible for keeping processes running smoothly: hiring, onboarding, compensation, performance reviews, corporate policies. They know employment law inside out, understand salary benchmarks, and can build HR processes by the book. They often command respect within their own function.

The problem lies elsewhere: their value is measured by convenience, not influence. This type of HR rarely participates in strategy discussions, has no impact on organizational architecture, and almost never shapes decisions about what kind of people and management layer the business will actually need in three to five years.

In a crisis, this HR becomes the first candidate for optimization: processes can be outsourced, automated, or temporarily simplified. The career ceiling here is low. These HR professionals don't translate well to international companies, businesses of different scale, or industries with different management cultures. They remain tethered to the context in which they grew up.

This is the level where HR earns its reputation as a "back-office" function.

Level Two: HR as Business Partner and Organizational Architect

Level-two HR begins with a radical shift in focus: they stop servicing processes and start servicing business logic.

What does this mean in practice? This HR reads the company's financial statements not because they have to, but because they can't make talent decisions without that information. They know which products drive margin, where the operational bottlenecks are, why the company is growing or stalling. They ask questions that level-one HR never asks: What's the true cost of a wrong appointment to this role? How will the management structure need to change if we enter a new market? What capabilities will be critical in three years, and where will we find them?

At this level, HR becomes a systems architect rather than an administrator. Their core competency is not "people" but assembling the organization to execute strategy: which roles are critical, which management models work, where the company loses speed due to poor appointments.

This is where real value for shareholders emerges. And this is where the HR director's own market value rises sharply—they become a transferable asset capable of strengthening different businesses.

It's important to understand: the transition to this level almost never happens inside weak or chaotic companies. The choice of employer becomes strategic. If the business can't articulate strategy, HR cannot learn to be a strategic partner. You can't master a language that no one around you speaks.

Level Three: HR as Holder of Institutional Power

The third level is rare. These are HR directors who transcend the function and become part of the core of corporate power.

Such leaders participate in shaping management culture, work directly with the board of directors, and handle succession planning at the CEO and key shareholder level. They often oversee not just HR but transformation-related functions: change management, leadership development, sometimes ESG or corporate ethics.

At this level, HR influences not just people but the long-term fate of the institution—the company, the group, or the ecosystem. It's no coincidence that transitions from this level sometimes lead to roles like Chief Transformation Officer, Chief Operating Officer, or in some cases, CEO.

How do people reach the third level? It's not a matter of years served, and it's not an automatic promotion from level two. It requires a confluence of factors: a company undergoing transformation or generational transition in ownership; a CEO or shareholder who sees HR as a strategic ally rather than a functional subordinate; and an HR leader capable of stepping beyond professional identity to think in terms of power, continuity, and institutional resilience.

The common thread among such HR leaders is a reputation as a trusted confidant of the owners and an ability to handle topics that aren't discussed publicly: boardroom conflicts, the inadequacy of key executives, preparing the company for sale or handover to the next generation. This is not about "people" or "culture" in the traditional HR sense. It's about the sustainability of power and managing transitions.

Why HR Isn't Treated as an Equal: The Expectation Gap

A paradox exists: 70% of CEOs expect their CHRO to be a key player in shaping corporate strategy. Yet only 55% of CEOs believe their HR director actually meets that expectation. A fifteen-percentage-point gap is not statistical noise. It's a systemic problem.

Data from an SAP and Oxford Economics study paints an even harsher picture: 42% of C-suite executives don't consider HR an equal partner, and 36% rate HR as only "slightly critical" to business strategy. In a McKinsey and Conference Board ranking, CEOs placed HR ninth in value among corporate functions—below finance, operations, sales, marketing, and technology.

These numbers explain why half of all HR directors feel their input isn't valued in their organizations. Research by Personio found that 65% of HR leaders acknowledge their influence on the C-suite is strong only during crises—when there's an urgent hire to make, an employee to terminate, or a conflict to resolve.

Who's to blame for this gap? The answer is uncomfortable for both sides.

On the business side, the problem is historical inertia. HR long existed as the function that "handles paperwork" and "organizes company events." Many executives still think in those terms, even while proclaiming that "people are our greatest asset."

On the HR side, the problem is self-positioning. The 2024 Global Human Resources Census by Talent Strategy Group revealed a telling pattern: HR leaders themselves rate their weakest competencies as "deep knowledge of the business" and "ability to influence." When asked why they chose the profession, the majority cite "humanistic" reasons—wanting to help people grow and develop. "Capitalistic" reasons—helping the company make money—rank significantly lower.

This isn't inherently bad. But if HR positions itself as a function "about people" rather than "about business through people," it's only logical that the business treats HR accordingly—as important but auxiliary.

The transition to levels two and three is impossible without a paradigm shift. HR leaders who want influence must learn to speak the language of P&L, risk, and strategic bets. They must stop justifying their existence through programs and processes and start demonstrating impact on business outcomes.

This requires effort from both sides. The CEO must give HR a genuine chance to be a strategic partner—not in rhetoric, but by including them in key discussions. HR must seize that chance—showing up with analysis, numbers, and recommendations rather than presentations about corporate culture.

The Feminization of the Profession: The Elephant in the Room

There's a topic the HR professional community is reluctant to discuss openly. HR is one of the most feminized professions in the corporate world. According to the Bureau of Labor Statistics, 71–76% of HR professionals are women. At the CHRO level in S&P 100 companies, women hold 72% of positions. It's the only C-suite role where women constitute the majority.

On its own, this could be considered an achievement. But behind this statistic lies a more complex picture.

Research in labor sociology reveals a persistent pattern: when a profession becomes feminized, its status and pay decline. This has happened with teachers, nurses, and flight attendants. Professions associated with "care" and "support" are valued less by the market than those associated with "decision-making" and "resource management."

HR is no exception. In the 1970s, the profession was predominantly male—75% men. Over the following two decades, the ratio reversed dramatically. In parallel, the perception of the function shifted: from "personnel management" to "people work," from an administrative role to a "support" function.

This raises an uncomfortable question: is HR's low position in the corporate hierarchy connected to the gender composition of the profession? Direct research on this topic is scarce, but circumstantial evidence is thought-provoking.

Notably, CHRO is the least ambitious C-suite position in terms of further advancement. According to Russell Reynolds Associates, only 14% of CHROs name the CEO role as their career goal. For comparison, among COOs that figure is 59%. In broader research, just 1% of HR directors at all levels expressed aspirations to become CEO.

Meanwhile, men in HR earn 13–40% more than women in equivalent positions—a gap larger than the market average. The paradox: in a profession where women constitute the overwhelming majority, men still earn more.

What does this mean in practical terms?

HR professionals—especially women—need to be aware of the context in which they operate. Stereotypes about a "soft" function and a "women's profession" affect how HR is perceived within the organization. The only way to counter this is by demonstrating business value—through numbers, impact on outcomes, and strategic thinking.

Companies should consider whether their undervaluation of HR stems from unconscious bias. If the function is perceived as "female" and "supportive," it follows logically that its influence will be limited. But this isn't a question of fairness—it's a question of effectiveness. Companies that underutilize HR's potential are leaving competitive advantage on the table.

The conversation about HR's feminization is uncomfortable but necessary. Ignoring this factor means ignoring one of the systemic reasons why the profession remains on the periphery of corporate power.

Why Most HR Professionals Never Rise Above Level One

Beyond systemic factors—how the business views the function and gender dynamics—there are causes that depend on the HR professional themselves.

The key mistake is choosing a comfortable employer over a developmental environment. HR professionals gravitate toward "stable" companies with a courteous CEO, clear processes, and low conflict. In such environments, strategic growth is impossible: there are no challenges that demand strategic thinking.

The second mistake is focusing on tools rather than context. Certifications, methodologies, and best practices create the illusion of professional growth but don't compensate for the absence of business acumen. An HR professional who knows ten competency models but doesn't understand how the company makes money will remain at level one regardless of how many credentials they accumulate.

The third mistake is fear of stepping out of the "helpful assistant" role. Strategic HR is inherently confrontational: it asks uncomfortable questions, challenges decisions, and shifts power dynamics. This requires a tolerance for tension that many HR professionals avoid, choosing to be useful rather than influential.

How HR Professionals Can Build a Growth Track

Career growth in HR is not a sequence of positions but a sequence of contexts. Companies experiencing growth, transformation, complex shareholder dynamics, and international expansion are the best training grounds for level-two and level-three HR.

The choice of employer matters more than salary or title. In the right environment, HR professionals grow exponentially: each year brings challenges that yesterday's tools can't solve. In the wrong environment, they stagnate for years, accumulating tenure but not capital.

That said, not everyone needs to reach level three. For many professionals, level two is the optimal point: high value, significant influence, a reasonable balance between strategy and execution. The drive to climb at any cost is as much a trap as getting stuck at the bottom. The question isn't how high you can go—it's consciously choosing the level at which you want to operate and meeting its demands.

Conclusion

The HR director of the future is not the "head of people." They are a strategic player who understands the business more deeply than many line executives and who can influence decisions far beyond the boundaries of the HR function.

The path to this role requires overcoming several barriers: the business's systemic mistrust of HR, stereotypes linked to the profession's feminization, and one's own limiting beliefs.

This is why the best HR leaders today aren't thinking about their next title. They're thinking about which system of power they want to learn to operate within.