HR teams struggle with decision-making due to data limitations

• Key Insight: Discover how HR roles are shifting from operational stewards to strategic decision-makers.  
• What's at Stake: Misaligned data could compromise pay equity, talent retention and budgetary discipline.  
• Forward Look: Prepare for AI-driven guardrails and integrated HR‑finance platforms reshaping compensation decisions.
• Source: Bullets generated by AI with editorial review

Benefit leaders are increasingly accountable for decisions linked to pay, growth and cost control, but they're lacking the proper tools and support to make fair and equitable decisions, according to a new study.
HiBob's HR & Finance Report reveals that benefit leaders are no longer just managing   processes — they're tasked with keeping employees engaged and motivated while also making decisions that support business goals. Yet 82% say they would make more cost-effective people decisions with more timely, unified HR finance data. 

"HR is facing a harsher reality where decisions about pay, promotions and employee development are still people decisions, but are also weighted more heavily as a business decision, too" Ronni Zehavi, co-founder and CEO of HiBob, said in a press release. "This study shows that without clear data and aligned priorities, leaders struggle to be fair while meeting organizational goals. Understanding these challenges is the first step toward making better, more informed decisions."

According to the survey, 68% of HR leaders say they can't make fair pay decisions without a unified view of people and financial data. One in four say it is difficult to make fair decisions when assigning performance ratings that influence pay. 

Additionally, conflicts between people and financial goals are cited as a top obstacle by 31% of HR leaders. And 25% say it is hard to fairly decide who can participate in paid development opportunities such as training courses and conferences.

Read more: Why HR leaders need to become experts on long-term care benefits

When it comes to access to data and decision-making, 70% say role-based permissions or privacy rules limit access to the data they need to make those decisions.

Notably, when accessing the right people or finance data is time-consuming, approximately two-thirds say they opt for an educated guess rather than risk missing a deadline.

The study also polled HR leaders about support and tools for better decision-making. Thirty-two percent say clear finance guardrails would help enable better decisions, while 31% say AI tools that summarize data and recommend options would improve people decision-making.

"Clear salary bands are one example of effective guardrails," Zehavi said. "They create structure and transparency while still allowing leaders to assess performance and potential thoughtfully … Guardrails work best when they provide clarity — not rigidity. They ensure discipline without removing discretion. Fairness and financial responsibility don't compete when the framework is clear."

Meanwhile, 36% of HR leaders say they would most leverage AI recommendations during performance reviews. Thirty-four percent of respondents said AI would be helpful in identifying and managing people risks, and 31% said they would be beneficial for spotting financial risks.

Read more: AI proficiency is becoming a must for benefit teams

"Today, managers often pull information from multiple systems — performance notes, feedback, financial constraints — before they even begin evaluating someone," Zehavi said. "When AI can bring that context together in one place, or surface patterns leaders might otherwise miss, it gives managers a stronger starting point. But AI doesn't make the decision. It informs it."

Read more: Past, present, future: How HR is evolving

The No. 1 message that benefit leaders should take away from this report, Zehavi says, is that the HR role is evolving from operational steward to strategic partner. 

"Fairness and financial discipline are not trade-offs," Zehavi says. "With the right visibility and tools at the moment decisions are made, leaders can be fair, defensible, and aligned with business goals. When HR has clarity, organizations move faster. And when people feel decisions are fair and transparent, culture strengthens. That's the real opportunity."