Scaling a business is one of the most exciting times in an organisation. New people joining, new markets opening up, new opportunities on the horizon. But growth doesn't automatically mean that the HR function grows with it in the right direction. Too often, the HR leader who was brilliant at building the foundations finds themselves buried deeper in the day-to-day weeds just as the business needs them at the table making decisions.
If that feels familiar, know that you’re not alone. Because the change from the operational HR that’s common in early startups to the strategic HR you need to reach enterprise goes beyond adding headcount to your team or buying a ‘better’ system. It requires you to fundamentally rethink what your role is there to do.
As our CEO, Helen Armstrong, puts it: HR leaders need to be open to the changing world of HR operating models, and be the ones driving data, process and technology. That's what's at the heart of scaling well for both businesses and the HR leaders within them.
There's a well-documented tension at the heart of HR. Research from the University of East Anglia, presented at the CIPD Applied Research Conference, surveyed 69 HR professionals across 19 different organisations and found that most HR leaders see their role as somewhere between 50% strategic and 50% operational. Only one person in the entire study saw their role as totally strategic. A number of them felt locked out of strategy altogether.
The reasons are familiar to anyone who's lived it: the weight of policy and process makes it harder to be creative. Business leaders aren't always ready to be challenged. The tech that was supposed to free up time for strategic thinking often doesn't deliver that in practice, because it was a bad fit and line managers end up picking up the phone (or Teams chat) to their HR team for questions anyway.
In a scaling business, all these problems get bigger, faster. What worked for 20 people doesn’t work for 100. What worked for 150 people doesn't work for 500. What worked for one set of terms and conditions doesn't work for three. Growth often amplifies the problem of manual, fragmented HR processes.
Before you can operate strategically, you need a foundation that doesn't constantly pull you back into firefighting. As our consultant Sam Williams puts it: HR leaders need to ensure their hire-to-retire processes are genuinely fit for a scaling business.
That means taking a hard look at where your team's time is actually going. Where is effort being duplicated? Where are people manually entering the same data into different systems because there's no single source of truth? Where are processes that made sense when the business was smaller, now creating bottlenecks? These are the things standing between you and the time you need to think strategically.
If scaling is happening through acquisition, Sam's point becomes even sharper: you need to assess whether your current systems and processes are fit for different terms and conditions and evaluate what you're inheriting before assuming your existing setup will stretch to cover it. We've written about this in the context of M&A before, and the same principle applies here: don't layer new complexity onto a foundation that was already cracking.
The goal needs to be more than automating everything for its own sake. Instead, you want to identify where technology and system functionality can carry the routine weight, so that your team is freed up to focus on the work that actually requires judgement and expertise.
Here's something one of our consultants, Emma Hall, thinks more HR leaders need to think about: so many HR teams are collecting data but haven’t started putting it to strategic use – this is a great place to start differentiating yourself.
Consider what you're already gathering. Recruitment data showing where your best hires come from and where the drop-off is. Performance data signals where skills gaps are emerging. Pay data that, when properly analysed, can prevent overpayments and inform smarter reward decisions. Workforce planning data that could tell the business six months in advance where it needs to hire, rather than reactively filling gaps.
HR professionals have a real opportunity to demonstrate value and be recognised as a strategic partner by offering genuine guidance based on the data and insight they already hold. More than a lack of data, the problem is more often down to a lack of tools, or a lack of confidence turning that data into something the board will actually act on.
This is where the move from transactional to strategic becomes visible. When HR goes from just reporting on what happened to forecasting what's coming, the conversation with the C-suite changes entirely. You're no longer simply presenting last quarter's absence figures. Instead, you're telling the CFO what their headcount costs will look like in 18 months and where the talent risk sits. That's a different conversation, and it earns you a different, better seat.
This might be the most important section of this post, and it's one where our COO Louise Bhatia has a clear view: the emergence of AI, and in particular headless AI, will entirely shift the power balance between HR and IT, and ultimately between the CPO and COO. And it will happen faster than most CPOs care to believe.
Many HR leaders in scaling businesses assume AI is for larger, more mature organisations. In fact, the opposite is true. Scaling businesses are exactly where the commercial impact from AI will be felt most. They have the most to gain from doing more with less and the most to lose from continuing to operate on manual, fragmented processes.
What does this mean practically?
It means HR needs to be ready for greater demands on HR data and processes. If your data is messy, inconsistent, or siloed, you won't be able to take advantage of AI tools when they arrive, and they are arriving. It also means that the HR leader's influence, their traditional seat at the table, will become either more or less relevant depending on whether they evolve with it.
The HR leaders who will matter most in the next five years are the ones who lead on outcomes, make data-informed choices, and hold the human judgement that AI genuinely cannot replicate. As researchers at Griffith University have noted, in a world preoccupied with AI and machine learning, human behaviour remains the most important part of driving transformation. Which is good news for people-focused HR leaders – but it does change the way people need to position themselves in an organisation.
Research is consistent on this point: credibility doesn't come from the job title. It comes from building genuine trust with the business leaders around you, and that often means being willing to operate in the operational space while you're building it. As the CIPD-backed research from UEA found, relationships developed while playing an operational role can be essential to building the credibility that allows HR to be heard on strategic questions.
The HR leaders who successfully make this shift tend to share a few things in common. They understand the business deeply, not just HR. They can speak the language of the CFO, the COO, and the CEO. They know where growth is coming from and what that means for people. They don't wait to be invited into strategy conversations. And they build the evidence base that makes it hard to exclude them.
People Management recently highlighted that three quarters of employees doubt their leaders' ability to drive change, and that leaders frequently turn to HR for assistance with this. This is a great opportunity for HR to play a highly visible strategic role. HR teams that position themselves as a steady, informed, credible guide through organisational change earn the kind of trust that no job description can manufacture.
The shift we're describing will take time. You can’t suddenly be strategic. That kind of reputation takes time to evolve. But there are practical places to start.
Audit your current HR processes with ruthless honesty. Where is manual effort concentrated, and what would it take to reduce it? Are your policies genuinely easy for line managers to follow without HR holding their hand? Spend some time thinking about what it would take to get from where you are to the ideal operating model.
Review your system connectivity. If data is being manually entered in multiple places, or if your HRIS and payroll aren't talking to each other, you need to act. Even if it feels manageable now, this can quickly become a liability. Every decision made on unreliable data is a risk to the business, and HR owns that risk whether it acknowledges it or not.
Invest in your own capability as a strategic communicator. The UEA research points to consulting skills, including stakeholder analysis, risk management and change planning, as the competencies that separate HR leaders who get heard from those who don't. These are learnable.
And finally, get ahead of the AI and data conversation. As Helen says, being heavily influential in prioritising data, process and technology is the key to scaling. That influence has to be earned now, before the decisions get made without you.
Scaling organisations are at an inflection point. The processes and systems and operating models that got them here may not be the ones that will take them where they're going. HR leaders who recognise that and get ahead of it become indispensable. Those who don't risk finding that the business has reorganised around them.
The good news is that the commercial case for strategic HR has never been clearer, and the tools to make it real, from modern HRIS platforms to workforce analytics to AI-enabled automation, have never been more accessible. The question is whether HR is ready to lead that change, rather than be subject to it.
Ready to take stock of where your HR function is today and where it needs to get to? Book a free consultation with our experts.