In boardrooms across Australia and New Zealand, something familiar is happening. HR teams are busy, but not always influential. Despite new tools, expanded remits, and growing expectations, many HR leaders still feel like they are fighting uphill battles: for investment, for strategic voice, for recognition.
We wanted to understand why.
So, in 2025, we surveyed 52 companies from nimble startups to enterprise giants across a wide range of industries in ANZ. Our goal was to answer a simple question:
What we found was clear: HR's ability to influence and drive change is not about budget or headcount. It is about how leaders see HR, how culture shapes investment, and where HR chooses to focus its time.
This white paper tells that story with the data to back it up.
If there is one number to remember from our research, it is this: 45%.
That is how much of HR's focus is explained by leadership perception alone. In other words, when executives see HR as a strategic partner, the function transforms, investing in culture, developing leaders, and improving performance. When they do not, HR gets boxed into admin work, no matter how capable or ambitious the team is.
Take two medium-sized companies. On paper, they look similar. But in one, HR has a seat at the leadership table. In the other, HR reports only on policies and compliance. The difference? Perception.
To grow HR's impact, the first lever is not budget, it is executive mindset. HR leaders must actively shape how they are seen by speaking the language of business, delivering insights that matter, and tying people strategy to company goals.
It is easy to assume that companies with bigger budgets invest more in HR. But our data shows something more nuanced: It is not how much money you have, it is what you value.
Culture explains 37% of the difference in HR investment levels.
In people-first cultures, HR is seen as a growth driver. These companies invest in talent tools, employee engagement platforms, and systems that help leaders lead better.
In process-driven cultures, HR is seen as a cost centre. Investment is minimal, often limited to payroll and compliance systems.
This holds true across company sizes. Some large firms still underinvest in HR tech, while some mid-sized firms punch well above their weight. The cultural mindset makes the difference.
To unlock investment, HR must frame the case through cultural alignment, not just ROI. Demonstrate how people initiatives reinforce the company's values and strategic direction, not merely its operational processes.
Small businesses face unique HR challenges. Founders juggle hiring, payroll, and performance conversations all while trying to grow the business.
Our survey revealed:
Early-stage companies don't need comprehensive HR departments, but they require systematic approaches and dedicated thinking about people beyond immediate operational demands. Strategic HR investment compounds quickly when implemented at the right growth stage.
As companies grow, decision-making gets more complex. In small firms, the CEO might approve a new HR tool over lunch. In a large enterprise, that same decision can take months.
Our survey found:
The result? Even great HR ideas can stall without cross-functional alignment.
HR leaders must transform from project owners to coalition architects. Success requires translating HR value into each stakeholder's language: technical feasibility for IT, financial returns for Finance, and risk mitigation for Procurement. Pilot programs provide proof points that reduce organisational resistance to larger investments.
There is no shortage of HR systems on the market. But here is the reality:
Only 20% of large companies in our study reported fully integrated HR systems.
Key Finding: Integration rates remain low across all company sizes - small firms achieve just 5% integration, medium firms reach 15%, while large organisations plateau at 20% despite 90% technology adoption rates.
Without integration, even great tools under-deliver. Data sits in silos. Reports take hours. Employee experience suffers.
The competitive advantage lies not in technology acquisition but in data connectivity and system integration. HR leaders who develop expertise in data architecture, systems thinking, and change management become invaluable internal problem-solvers who can bridge the gap between HR needs and technical implementation.
So what separates impactful HR teams from those still fighting for relevance?
Our data shows that HR priorities explain 43% of their influence on business strategy. That means what HR chooses to work on matters.
Key Finding: Teams focusing on leadership development and talent strategy achieve significantly higher business influence than those concentrated on compliance and administrative functions.
High-impact HR teams focus on:
Low-impact HR teams focus on:
Organisations recognise teams focused on leadership development, employee experience, and workforce planning as growth catalysts. Conversely, teams concentrated solely on administrative or compliance functions remain positioned as support services rather than strategic contributors.
To expand influence, HR must deliberately select initiatives that directly address core business challenges including retention, performance optimisation, and organisational growth, while establishing measurement frameworks that demonstrate tangible impact.
Novel Contributions
This research fills a critical gap by quantifying dynamics previously understood only anecdotally:
The Missing Business Perspective on Culture Change: Organisational culture has become a top HR priority in 2025, according to Gartner, alongside leadership development and workforce planning. This shift reflects HR’s growing responsibility for reshaping how organisations engage employees, embed values, and align behaviour across the business. Yet most research focuses only on how HR plans to drive change - not whether it has the organisational support to succeed.
Our data fills this gap. Business leaders’ perception of HR and the importance of having the right work environment, fundamentally determines whether culture initiatives are resourced and prioritised. This credibility assessment explains 45% of the variance in strategic focus - a dynamic never previously measured in organisational change literature. Without that business backing, even the best-designed culture strategies struggle to gain traction.
While Compono's findings align with established patterns, our data challenges two prevailing industry narratives:
The reality is more practical and more challenging than market narratives: measurable factors drive transformation success, but operational constraints move slower than industry hype.
Our research reinforces several industry observations:
These findings create an evidence-based framework for HR evolution: influence grows where leadership perception shifts, culture drives investment, and priorities align with business outcomes - though this journey remains uneven, particularly for smaller organisations."
HR does not need to wait for a bigger budget or a bigger team to make a difference. The most successful HR leaders focus on four key levers:
The future of HR is not just digital - it’s strategic, cultural, and deeply human.
And it starts with knowing which levers to pull.
While HR can drive meaningful change without major budget increases, they still need to be adequately resourced to operate strategically.
Leaders must shift how they think about HR - from cost centre to catalyst - and ensure teams have the people, tools, and executive backing to deliver on high-impact work.
That’s what moves the business forward.
McKinsey & Company. (2023). The State of Organizations 2023: Ten shifts that are transforming organizations-and what to do about them. McKinsey & Company.
Link: https://www.mckinsey.com/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/the%20state%20of%20organizations%202023/the-state-of-organizations-2023.pdf
Deloitte. (2024). HR in the boundaryless organization. Deloitte Insights.
Gartner (2024): "Gartner HR Leaders Survey Reveals Top Two Priorities in 2024 are Leader and Manager Development and Organizational Culture"
Link: https://www.gartner.com/en/newsroom/press-releases/2023-11-07-gartner-hr-leaders-survey-reveals-top-t
Gartner (2024): "Gartner Survey Finds Leader and Manager Development Tops HR Leaders' List of 2025 Priorities for Third Consecutive Year"
Link: https://www.gartner.com/en/newsroom/press-releases/2024-10-15-gartner-survey-finds-leader-and-manager-development-tops-hrleaders-list
Gartner (2025): "Top HR Focus Areas for 2025" - Including leadership development, cultural alignment, and workforce planning”
Link: https://www.gartner.com/en/articles/top-hr-focus-areas-for-2025