A chair once remarked to me, after a difficult CEO transition, that the organisation had become, “informationally rich but emotionally illiterate.”
The dashboards were excellent, reporting was immaculate, productivity targets were being met, yet leadership had completely missed the fact that trust inside the organisation had quietly collapsed because nobody had properly interpreted the silence.
That observation has stayed with me because it captures something increasingly visible across modern organisations: HR functions are quietly shrinking.
Not everywhere, and not always dramatically, but enough to become a genuine boardroom conversation. AI-driven start-ups have popularised the idea of ultra-lean operating models with minimal support functions, while larger corporates are increasingly centralising HR, automating recruitment and reducing management layers in pursuit of efficiency. In recent weeks alone, headlines around AI-related workforce reductions at major global firms, including banks and technology companies, have intensified debate around how lean organisations can realistically become.
The pressure is understandable. UK businesses are operating in a difficult environment of rising employment costs, weak productivity growth and economic uncertainty. The CIPD reports that one in six employers now expects AI to reduce headcount over the coming year, rising to one in four large private-sector firms. Clerical, administrative and junior management roles are viewed as particularly exposed.
As a result, many organisations are asking themselves the same question: should we follow?
Some of this change is entirely rational because many businesses genuinely became too bureaucratic and process-heavy, but there is a profound difference between removing administration and removing interpretation because strong HR professionals were never simply policy managers. At their best, they acted as organisational interpreters, they sensed when leadership messaging was no longer landing, when a culture had become politically cautious, or when a restructuring looked convincing in a board presentation but damaging in practice.
That matters because businesses are operating in an unusually fragile environment. Hybrid working has weakened informal communication channels and AI itself is creating uncertainty around future roles and skills. Many organisations are simultaneously managing transformation fatigue, economic pressure and shifting workforce expectations.
The irony is that, at precisely the moment when human interpretation may matter most, many firms are reducing the capability that historically provided it, and some are already discovering the limits of overcorrection. Gartner recently warned that companies cutting staff aggressively in anticipation of AI efficiencies are often failing to achieve the returns they expected, with many later needing to rebuild capability.
Leaders can become increasingly insulated by dashboards, formal reporting structures and systems while losing visibility of what employees are actually thinking and feeling. Problems then emerge later and more publicly: cultural fragmentation, failed transformation programmes, retention issues or leadership distrust.
At Friisberg, we increasingly see boards placing greater value on qualities that are difficult to automate: judgement, communication, emotional intelligence and the ability to navigate complexity calmly. Technical expertise still matters enormously, but leadership today is becoming as much about interpretation as execution.
Organisations are not simply systems, they are human communities, and communities rarely function well when nobody is listening between the lines.
You need to load content from hCaptcha to submit the form. Please note that doing so will share data with third-party providers.
More InformationYou need to load content from reCAPTCHA to submit the form. Please note that doing so will share data with third-party providers.
More InformationYou need to load content from reCAPTCHA to submit the form. Please note that doing so will share data with third-party providers.
More InformationYou need to load content from reCAPTCHA to submit the form. Please note that doing so will share data with third-party providers.
More InformationYou need to load content from Turnstile to submit the form. Please note that doing so will share data with third-party providers.
More Information
