Recent headlines about fintech company Bolt removing its HR function generated some predictable reactions. Some viewed it as evidence that HR is becoming obsolete. Others saw it as another example of business leaders undervaluing people functions.
I believe the reality sits somewhere in the middle.
For me, the more interesting question is not whether businesses need HR, it is whether businesses need traditional HR structures.
What we're seeing in practice
Across the organisations I speak with, very few leaders are asking for additional processes, more administration, or another layer of internal infrastructure. However, they are asking for:
- reduced operational friction
- faster decisions
- practical guidance
- reduced risk
- stronger manager capability
- support that scales as the organisation grows
That distinction matters and it is the reason that stories like the one about Bolt get attention.
Many organisations have HR functions that unintentionally create complexity rather than remove it.
Processes become layered over time. Approval chains become longer and managers can begin to feel they need permission to make decisions rather than support to make better ones. The distinction between operational ownership and HR support can become blurred. All this results in HR being viewed as a bottleneck rather than a business enabler. A criticism that should not be dismissed out of hand.
Businesses are under pressure to operate more efficiently than ever. AI is automating administrative work. Leaner structures are becoming common. Every support function is being challenged to demonstrate value and HR is not exempt.
Removing HR entirely doesn’t remove workforce risk.
Too often organisations assume there are only two options to solve HR issues:
Option 1: Build a larger internal HR function with increasing overhead and fixed cost.
Option 2: Remove HR support and expect managers to absorb responsibility.
Here’s the thing. Neither of these options are ideal. Option 1 creates unnecessary infrastructure and increases costs, and Option 2 creates risk.
There is a third option.
Smaller. Smarter. Outsourced.
The future of HR does not need to be larger HR departments. It may be access to expertise exactly when it is needed.
That could look like:
- smaller internal teams focused on strategy and culture
- technology and AI reducing administrative workload
- specialist expertise available on demand
- flexible support models that scale with business need; and
- managers empowered with practical guidance rather than process dependency
Outsourced HR has traditionally been viewed as something used by smaller organisations because they could not justify an internal HR team. Increasingly, organisations are rethinking that perception entirely.
Outsourcing HR can become the middle ground between building extensive infrastructure and having no HR capability at all.
HR Outsourcing is NOT
- a replacement for people strategy
- a call centre approach
It is an extension of the business itself.
The strongest outsourced models are not there to create work. They are there to remove it.
Some final thoughts
I suspect we will see more business leaders questioning traditional support structures over the next few years. AI and technology will continue to reduce administrative burden, and businesses will continue to seek leaner operating models.
I do not believe the future is “no HR”.
I believe the future of HR is to have this function redesigned around what organisations actually need: less administration, less friction and more practical support.
- HR that is more commercial
- More practical
- More integrated into the operation of the business
Smaller. Smarter. And perhaps, in many cases, outsourced.
