What Happened:
In an interview with HR for Breakfast, executive Kristy McCann pushed back on a myth this year's layoff headlines have revived: that HR is the cost center you cut first. The news behind it is Bolt eliminating its HR team and Meta moving to cut roughly 8,000 roles to help fund its AI buildout.
HR, McCann argues, is accountable for as many people as the CEO but runs on one of the smallest budgets in the building, and has wrongly accepted a "back office" label. In her view, people teams drive revenue, product, and strategy.
Her advice to HR leaders watching the cuts: stop making the case in soft terms and "follow the money." Put a dollar figure on disengagement, turnover, benefit costs, and brand damage that leadership can't wave away.
More Insight:
McCann points out that HR is often responsible for the same headcount as the chief executive, yet typically operates on a fraction of the budget. "HR is not back office. They drive revenue, they drive product, they drive strategy," she said. The data backs the instinct: Gallup's research ties top-quartile engagement to 23% higher profitability, with lower turnover and stronger customer loyalty alongside it.
Her go-to move is to translate it into dollars. McCann described a former employer where a change at the top cost millions a year as engagement fell and people walked, and where the stock eventually slid by more than half. People problems, she argues, are financial problems, and HR is the team positioned to show the math.
Beyond engagement, performance, and turnover, McCann tracks the leading indicators others miss, like rising benefit costs, climbing legal claims, customer churn, and the one she stresses most: the economic reality of employees. With wages still trailing inflation and return-to-office mandates adding thousands in commuting costs, a company can look healthy on paper while its people quietly can't afford to stay. "You can have a perfect organization on paper, but if people can't afford to live on what they earn, something's wrong," she said.
Underneath the numbers is trust. McCann maps Lencioni's Five Dysfunctions of a Team onto Maslow's hierarchy: trust is the base layer, and without it teams keep sliding back down, burning money, time, and energy each time. To rebuild it she leans on the ADKAR change model, moving from awareness of the signals to desire, knowledge, ability, and reinforcement, all anchored in a clear "what's in it for me" for employees.
For McCann, it starts with HR dropping the back-office label and owning the revenue driver it already is.