HR at a crossroads

Despite years of conversation around HR "earning a seat at the table," many HR leaders still find themselves perceived more as collaborators than equal partners in the C-suite. New research from a global survey conducted by SAP and Oxford Economics reveals that 42% of C-suite executives still don’t view HR as an equal partner and 36% of leaders see HR as only slightly critical to business strategy. This highlights a persistent gap in how HR’s strategic potential is perceived. While HR is seen as essential for talent operations, it’s still often underestimated as a source of strategic value.

Although those numbers may seem discouraging at first glance, this perception gap presents HR leaders with a valuable opportunity to redefine their role and prove HR’s relevance at the highest levels of business strategy. A majority of C-suite leaders believe the HR partnership is trending in a positive direction—47% say it's improving, and 70% believe their function would benefit more than HR would from strengthening the relationship.¹ It's a pivotal moment for HR teams to transition from being functional experts to strategic powerhouses.

Keep reading to explore strategies for taking advantage of the latest technology to position HR as a strategic business driver—through better data integration, AI leadership, and cross-functional collaboration.

HR’s current status: Vital, but not yet equal

In the survey, C-suite executives overwhelmingly acknowledge HR's essential role in hiring, retention, employee development, and culture.¹ These are the bedrock functions that drive engagement and productivity. But strategic influence is still a work in progress.

The distinction lies in how executives perceive HR:

• Vital, but operational: HR keeps the workforce running.
• Collaborative, but peripheral: HR is consulted on strategy, but is not a partner in creating it.
• Well-liked, but under-utilized: HR’s potential impact is acknowledged but not fully activated.

HR leaders agree: they similarly currently view themselves as vital to basic talent operations but struggle to position HR as an equal strategic business partner in the C-suite.

If HR is to become a true strategic partner, it must connect its workforce priorities to business priorities—and back those connections with data.

Data integration: The first step to strategic influence

One key finding from the research—and one clear opportunity for HR teams— focused on the link between workforce data and strategic decision-making.

Only 38% of C-suite leaders are satisfied with their current integration of HR and business performance data.¹ Yet those who have achieved integration report significant gains, from improved hiring to better retention and cost savings through automation.

Workforce data can unlock strategic value when it:

• Forecasts skill gaps before they impact business performance
• Enables smarter compensation and talent development decisions
• Links employee performance to business outcomes

These capabilities are key for HR teams at growing organizations that need their HR systems to scale along with business complexity.

By delivering these insights, HR demonstrates its ability to influence outcomes beyond talent management—building credibility and securing a more strategic role in enterprise planning, investment, and long-term decision-making.

AI as a catalyst for HR’s strategic role

The survey also emphasized HR’s critical position in driving enterprise AI transformation.

AI adoption is reshaping how companies work—and HR is central to its success. 92% of executives say HR plays a critical role in implementing AI tools across the workforce¹.

Grounded in empirical research, SAP’s report identifies five critical areas where HR can drive successful enterprise AI adoption—turning workforce transformation into business value:

• Training employees to use new AI tools confidently
• Identifying change champions to support team-level rollout
• Piloting new tools and collecting employee feedback
• Providing continuous support to promote adoption
• Modeling behavior from leadership down

These roles make HR not just an enabler of AI transformation, but a steward of responsible, inclusive implementation.

Cross-functional collaboration: Speak their language

A final insight from the research explored HR’s alignment—or, at times, lack thereof—with other business leaders.

SAP’s research reveals that HR has the lowest alignment with other C-suite functions in terms of shared business priorities¹. While HR prioritizes engagement, recruitment, and leadership development, their C-suite peers focus on financial performance, innovation, and growth.

That diversity is not a flaw—it’s a strategic asset. But HR needs to frame its contributions in ways that matter to peers, like:

• Linking leadership development to business continuity
• Framing retention as risk mitigation
• Showing how engagement metrics correlate with customer satisfaction and revenue

The key: represent HR’s workforce priorities in the context of the business’s priorities—and speak in the language of value.

A model for strategic partnership: HR and the EV transition

One real-world example: a CHRO partnered with a cross-functional team to roll out a new fleet of electric vehicles (EVs). Their success came from:

• Tying investment to operational outcomes with hard data
• Partnering with IT and Ops to support system rollout
• Advocating for workforce needs by developing training programs

This collaborative effort led to measurable business value—including enhanced sustainability outcomes, improved workforce preparedness, and stronger operational alignment between HR and the broader organization.

This is what strategic partnership looks like: shared goals, data-backed decisions, and people-first execution.

What this means for HR leaders

To truly elevate HR in the C-suite, HR leaders don’t need to abandon their core mission. They need to:

• Present HR data alongside business performance metrics
• Lead the charge on responsible AI adoption
• Join and shape cross-functional initiatives

These strategies reflect what SAP’s HCM solutions enable today: integrated systems, personalized employee experiences, and flexible platforms that scale with growth.

Whether you're preparing for digital transformation, responding to economic change, or simply growing fast—now is the time for HR to lead, not follow.