Once the backbone of organisational success, HR has now become a corporate bottleneck, stifling growth, accountability, and performance. Rather than enabling businesses to thrive in an era of rapid change, digital transformation, and workforce evolution, HR is failing leaders, employees, and the bottom line.
The Accountability Crisis
Instead of empowering leaders, HR drowns managers in red tape, making it easier to retain underperformers than remove them. It has become too bureaucratic, risk-averse, and compliance-obsessed at the expense of real business impact. In many organisations, HR prioritises policy enforcement over developing high-performing leaders.
A recent Deloitte study found that 72% of executives believe HR policies hinder effective performance management.
The result? Employee disengagement is at a 10-year high, with Gallup reporting only 23% of employees feel truly engaged at work in 2025.
The DEI Illusion
HR’s diversity, equity, and inclusion (DEI) initiatives have lost credibility. Despite a 38% increase in DEI budgets since 2023, McKinsey’s 2025 report shows that less than 30% of employees believe these initiatives drive real inclusivity. Rather than fostering a high-performance culture, many HR teams focus on optics over capability, leaving top talent disengaged and businesses vulnerable to performance dilution.
Leadership Development Failure
Despite global organisations spending over $400 billion on leadership development, Harvard Business Review reports that 67% of programs fail to produce tangible results. HR continues investing in outdated training, neglecting to embed accountability and strategic decision-making into leadership pipelines.
The AI Revolution and HR’s Obsolescence
AI and automation now threaten to replace HR entirely. Businesses are realising that data-driven decision-making and agile leadership development are more effective than outdated HR processes. If HR doesn’t shift from gatekeeping to genuine value creation, it will become obsolete.
It’s time for businesses to reclaim leadership, strip back HR bureaucracy, and rebuild a people function that delivers results.
HR must be rebuilt, redefined, or removed—because, in its current state, it is the biggest corporate liability of 2025.
