The Business of HR: From Policy to Profitable Impact

In May, I had the privilege of joining a panel for SHRM’s Pathways & Perspectives alongside five thoughtful, engaging HR professionals. We talked candidly about the realities of this work – what’s working, what’s changing, and what still needs to.

Since then, we’ve scheduled recurring catch-ups. No performative nonsense. Just real conversations: learning from one another, swapping ideas, and making sense of the challenges we’re each navigating.

And here’s what I’ve felt, every time we talk:

HR has never been more complex or more mission-critical.

HR's not just supporting hiring, onboarding, or compliance anymore. We’re leading strategy. Supporting culture. Navigating burnout, hybrid work, AI integration, and rising mental health needs – all at once. They're expected to anticipate change and hold steady. To protect the business and care for its people.

And yet – so often – the role of HR is still misunderstood, undervalued, or underutilized.

So let’s reframe it.

HR is a business driver. Done well, it fuels innovation, retention, resilience, and even profitability.

But here’s the catch: good policy isn't enough to drive this type of performance. Not in this environment. With so much change, so much uncertainty, and so much progress in research over the last few decades, it's time for something more.

A culture that's built on a foundation of psychological safety.

“Teams with high psychological safety see 20% higher profitability, higher engagement, and significantly better retention.”— Harvard Business Review

The question I've been working through for the last few months is this: How can HR create the conditions where people can truly thrive – no matter what’s shifting around them?

It starts here.

What HR Is Up Against – and Why Policy Isn't Enough

HR is facing a perfect storm of workplace complexity. Based on research by SHRM, LinkedIn, and McKinsey, the top four challenges stressing the system are:

• Attracting and retaining the right talent

• Effectively and humanely integrating and navigating AI

• Supporting mental health and emotional well-being

• Designing sustainable hybrid, remote, and diverse work cultures

All of these are deeply human issues that transcend the real of good policy.

It's not enough.

It reminds me of feedback I used to get early in my HR career:"You need to better support the company and spend less time supporting the employees."

As though a panel of the most senior leaders is the company… and everyone else is what, exactly? Room décor?

Employees are the business. There’s no product, no performance, no innovation without them. We can’t solve human problems by treating people like variables in a spreadsheet.

We need human-centric solutions. And that begins with psychological safety.

Psychological safety is the environment that allows people to speak up, contribute ideas, take smart risks, and challenge the status quo without fear of punishment or shame. It’s the difference between checking boxes and building momentum. Leading with fear and desperation vs. leading with collaboration and inspiration.

So how do we actually create it?

There are four key practices that every HR professional – and every people leader – can start putting into motion now.

4 Human-First Practices That Build Psychological Safety

1. Collaborative Communication: Leading Through Language

If there’s one thing HR professionals should know well, it’s that how we communicate shapes culture. As the Persian poet Hafiz said, “The words we speak become the house we live in.”

But communication isn’t just about clarity – it’s about connection. And connection is what earns trust. The best communicators create space to listen and understand, as much as they do to be heard.

That means:

• Using active listening strategies like mirroring and matching

• Reframing "why" questions – which often spark defensiveness – to "what" or "how" questions that support deeper dialogue

• Tapping into storytelling to build trust and spark shared understanding

• Grounding conversations in shared values – not just objectives

It also means slowing down enough to notice the tone we’re setting and to speak with someone rather than at them. Curiosity invites participation. Blame shuts it down.

💡 Try this: Rewrite one “why” question you often ask into a “what” or “how” alternative. "What obstacles caused us to miss the deadline?" will produce a far more open and honest response than, "Why wasn't this done in time?"

2. Strategic Influence: Turning People Strategy into Business Strategy

When HR is seen as reactive or tactical, it’s often because we’re left out of strategic conversations – or enter too late.

The remedy isn’t louder voices. It’s smarter influence.

That starts with building real relationships. Trust leads to traction.

It means:

• Asking better questions to understand what leaders are really trying to solve

• Pairing data with real human narratives – not just spreadsheets, but stories

• Framing every recommendation through the lens of shared priorities, values, and impact

• Recognizing that people do not know what they do not know, and finding opportunities to educate, inform, and widen perspectives

When we connect the dots from retention to revenue, from recognition to productivity, we show that HR is business strategy.

💬 Try this: For every major data point you plan to present, prepare a real story to support it. Studies have shown that emotion and personalization drive 90% of our decision-making, while logic and data alone drive less than 25%.

3. Open Vulnerability: Leading with Courage and Clarity

There’s a myth that vulnerability undermines authority and respect, when in reality, it deepens trust and connection.

HR is often expected to be the steady ones. The fixers. The calm amidst the storm. As a result, they are often told to check their emotions at the door, to put on a good face, or to be entirely unresponsive.

The alternative, many believe, is weaponizing one's emotions or being viewed as unprofessional.

But that's not open vulnerability. That's unchecked, unbridled emotion driven by shame and ego. And the longer HR professionals (or all humans) go without learning how to embrace open vulnerability, the less trust and connection they create – not to mention the physical, mental, and cognitive effects.

Open vulnerability looks like:

• Recognizing and regulating your emotions so you can respond thoughtfully – as someone who struggled with this for years, you'd be surprised how effective a 10-minute daily journaling practice can be

• Openly sharing your past failures, setbacks, and mistakes along with the lessons you learned to model a growth mindset

• Acknowledging limitations in your experience, expertise, or confidence in how to proceed – inviting ideas, collaboration, and a better way forward together

• Create the space – both physical and conversational – for people to process their struggles and challenges without judgement or redirection

This isn’t about oversharing or allowing emotions to run rampant. It’s about practicing presence, grace, and courageous connection.

🌀 Try this: What's one failure, setback, or mistake from your past that helped you grow and become the professional you are today? Find an opportunity to share this experience with someone this week.

4. Empowered Optimism: Creating a Culture Where People Want to Stay

Optimism is one of the most powerful tools any HR professional can cultivate.

While pessimism and negativity bias impact our strategic thinking, overwhelm our emotions, and create resentment – optimism allows you to see through the challenges you're facing to find the opportunity, create more effective solutions, and navigate your way forward with greater clarity and confidence.

What's more? It's the secret to becoming a far better professional overall. Practicing optimism every day for just 3-weeks has been proved to increase productivity by 31%, reduce stress and burnout by 23%, triple your creativity, and improve influencing skills by over 30%.

Empowered optimism looks like:

• Celebrating what’s working and the progress being made, rather than simply fixating on the final destination

• Encouraging, recognizing, and rewarding change-makers to drive a culture of innovation

• Reframing failures and setbacks as opportunities for learning, collaboration, and growth

• Proactively sharing experiences that energize you, excite you, and bring you joy – both professionally and personally

🌟 Try this: Add three 10-minute blocks in your calendar this week to personally thank or recognize someone who deserves it. A kind gesture you witness, a milestone they achieved, or the way they handled a tough challenge with grace.

Final Thought: The Future of HR Is Human, Strategic, and Bold

The days of relying on polished policies and burnout-level effort are over — if they ever truly worked at all. Today, the challenges of our current environment demand something deeper.

Psychological safety is the foundation that allows real change to take root, and meaningful success to grow from it.

And no one is better equipped to lead that change than HR.

You’re the ones who see the full picture. Who sit at the crossroads of people, policy, and possibility.

You’re not just supporting the business — you are the very heart of it.

So please lead with courage, connect with intention, and drive meaningful impact in a way only you can.

You've got this.

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If you or your organization need support in creating greater psychological safety, I would love to join you on the journey. Please review my current services or schedule a free consultation to take the first step toward more meaningful impact.