HR isn’t a swamp – it’s a value engine

In his recent CapX column, Joseph Dinnage argues Britain is “drowning” in HR: pointing to an 83% increase in headcount since 2011 and the fact that 1.6% of the UK workforce is now HR versus 0.8% in the EU and 1% in the US. Dinnage notes that “we are beaten only by the Dutch at 1.8%.” He frames this growth as a consequence of the Equality Act and costly, DEI‑driven bureaucracy.

But the comparison with the Netherlands doesn’t strengthen his argument – it dismantles it.

The Netherlands, the only country with a higher percentage of HR professionals than the UK, consistently outperforms on every measure of employee and societal wellbeing. It ranks 5th in the world for overall happiness in the 2025 World Happiness Report, supported by strong social trust and excellent quality of life. It also sits #1 globally for employee wellbeing, scoring an unmatched 74% in ManpowerGroup’s Global Talent Barometer. Dutch employees are happier too: 70% report being moderately or very satisfied in their roles, and 83% say they find their job satisfying.

Put plainly: investing in people functions works.

Yes, free access to tribunals, rising regulatory expectations and rolling legislative change mean organisations need more HR capability. But in well-run, people‑first organisations, HR growth isn’t about spending more time on disciplinaries and grievances. It is about building leadership capability, designing a great employee experience, and creating the conditions for wellbeing and high performance. 

The evidence is overwhelming. Higher employee wellbeing is linked to around 10% productivity gains, lower attrition and better client outcomes. Far from being a bureaucratic overhead, HR is a performance lever. 

Equality, Diversity & Inclusion is a perfect example. Dutch Best Workplaces demonstrate higher agility (90% vs 61%) and innovation (90% vs 62%) – outcomes strongly tied to inclusive cultures and diverse thinking. And very few organisations employ HR professionals focused solely on ED&I. Inclusion work is woven through broader people initiatives linked to capability, culture and organisational effectiveness.

The commercial case is equally clear.
Talent Acquisition done in‑house avoids recruitment agency fees, resulting in millions saved annually in many businesses and a higher rate of staff retention. Learning & Development similarly yields strong returns, with high‑impact L&D functions improving capability, engagement and performance.

Add to that the expertise found in the best HR teams – strategic business partnering, organisation design and development, culture, change and transformation – and it becomes clear there is far more happening than an imagined army of practitioners filtering through CVs. Modern HR is a strategic engine room: it enables culture, capability, performance and the conditions in which people and organisations succeed.

Rather than viewing HR growth as a sign of excess, it can be helpful to look at organisations that have invested deliberately and intelligently in their People functions. These employers show how robust HR capability helps create high-performing, inclusive workplaces where employees feel supported and able to thrive.

This isn’t ideology. It’s strategy – and it works.