HR’s True Role: Driving Business Impact, Not Just Compliance
HR is at a crossroads. For too long, it has been boxed into a role of compliance and process management—seen as a necessary function, but not a strategic driver of success. That outdated view is fading.
Today’s most effective HR leaders understand that their true power lies not in policies, but in fueling business growth, shaping workforce strategy, and driving measurable impact.
Betty Larson, EVP & CHRO at Merck, challenges HR professionals to rethink their approach—moving beyond checklists and bureaucracy to become indispensable architects of business success.
During a recent episode of Career Club Live, Betty shared hard-hitting insights on how HR leaders can build credibility, simplify processes, and align HR strategy with business success.
The key takeaway? HR must move beyond process obsession and focus on business outcomes.
HR as a Business Driver: The 80/20 Rule
HR departments have long been viewed as administrative functions, tasked with compliance and process management rather than strategic business drivers. But this perception is changing as companies recognize the need for HR to be a true business driver rather than just a support function.
Betty stresses that HR must redefine its priorities, ensuring that its efforts contribute directly to the company’s growth and success. Too often, HR leaders spend more time refining internal processes than delivering real business value.
Betty argues for an 80/20 split:
- 80% of HR’s focus should be on business execution—helping the company grow, retain top talent, and solve workforce challenges.
- 20% should be on improving HR’s internal processes, ensuring they remain effective but not overcomplicated.
“HR loses credibility when it overcomplicates things,” Betty warns. She emphasizes the importance of simplification—ensuring that processes serve the business, not the other way around.
HR Must Prove ROI—No Blank Checks
For HR to be seen as a strategic partner, it must justify its initiatives in business terms.
Betty shares a critical lesson learned from her time at CR Bard, where decentralized HR required proving the return on investment (ROI) of every new system or initiative.
“If you’re asking for budget or system upgrades, you better prove the ROI,” she says. “HR needs to stop expecting blank checks and start making a strong business case.”
The Shift from Compliance to Impact-Oriented HR
Many HR teams still operate from a compliance-first mindset, focusing on policies and processes rather than business impact.
Betty advocates for a different approach:
- What’s the business problem we’re trying to solve?
- How does this initiative drive growth, efficiency, or talent retention?
- Are we measuring real business outcomes, not just HR execution?
According to a study by McKinsey, companies with strong HR-business alignment are 2.5x more likely to be industry leaders [source: McKinsey & Company].
Building a Culture of Agility and Growth
In an era where market conditions shift rapidly and talent needs evolve unpredictably, agility is no longer a luxury—it’s a necessity.
Organizations that fail to anticipate workforce challenges or adapt to industry changes risk falling behind. Betty emphasizes that HR leaders must:
- Plan ahead for workforce shifts and skill gaps instead of reacting to crises.
- Develop internal talent to reduce reliance on external hiring.
- Foster a growth mindset, ensuring employees and leaders embrace change.
Deloitte’s research shows that companies with a strong learning culture are 52% more productive and 92% more likely to innovate [source: Deloitte Insights].
HR’s Role in Driving Workforce Sustainability
One of the most significant shifts in HR today is long-term workforce planning. Instead of frequent layoffs and reactive hiring, companies should invest in reskilling and internal mobility.
A World Economic Forum report found that by 2025, 50% of all employees will need reskilling due to automation and changing job roles [source: WEF].
HR must take the lead in preparing organizations for this shift.
The Courage to Ask Tough Questions
One of Betty’s most powerful insights is that HR doesn’t need to have all the answers—it needs to have the courage to ask the right questions. Too often, HR leaders operate under the assumption that they must present fully-formed solutions before engaging in strategic discussions.
However, Betty emphasizes that the true value of HR lies in its ability to challenge assumptions, spark dialogue, and push the business to consider the workforce implications of its decisions.
By asking the right questions at the right time, HR can position itself as an indispensable partner in shaping business strategy.
- “What talent will we need in five years?”
- “How do we retain top performers?”
- “What are we doing to make HR processes truly business-driven?”
The Future of HR: AI, Data, and Business Strategy
As businesses continue to harness the power of technology, HR is undergoing a transformation. The ability to make data-driven decisions has never been more critical, allowing HR teams to shift from reactive problem-solving to proactive strategy.
By leveraging AI and advanced analytics, HR can not only enhance efficiency but also unlock new insights that drive better workforce planning and talent management.
HR is becoming increasingly data-driven, leveraging AI to:
- Remove bias from hiring processes
- Predict workforce trends
- Provide deeper insights into employee performance and engagement
Companies that use AI-driven HR analytics see a 31% increase in hiring efficiency and a 25% improvement in retention rates [source: SHRM].
Final Thoughts: HR as a Strategic Growth Engine
The message from Betty Larson is clear: HR must evolve. HR leaders who fail to align with business objectives will lose credibility. But those who simplify processes, prove ROI, and focus on impact will become indispensable.
To hear more of Betty’s insights, listen to the full episode of Career Club Live with Bob Goodwin. It’s a conversation every HR leader needs to hear.