The Difference Between HR and People & Culture

Last Update: March 25, 2025

The landscape of workplace management is undergoing a seismic shift. According to Deloitte’s 2025 Global Human Capital Trends survey of nearly 10,000 business and HR leaders, organizations are facing unprecedented challenges in balancing traditional HR functions with modern culture-building initiatives. This transformation isn’t just a trend – it’s a strategic imperative.

Over the last several years, we’ve noticed a significant transformation in HR hiring. CEOs are increasingly ready to hire a Director of People and Culture, sometimes opting to forgo traditional HR roles to prioritize people and culture. PwC’s latest workforce survey reveals that 60% of employees now report being very or moderately satisfied in organizations that have made this shift, highlighting the impact of culture-focused leadership.

The Stakes Have Never Been Higher

McKinsey’s analysis shows that a preponderance of executives recognize how much external partnerships and cultural alignment help companies differentiate themselves. This is particularly crucial as the World Economic Forum expects that more than 50% of employees will need to significantly refresh their skills by 2025 due to rapid technological advancement.

Enter People & Culture.

Before we get into the fine print, this is your major takeaway: hiring a leader of people and culture instead of an HR leader reflects the business philosophy of a company’s leadership. At its core, it is the difference between management and leadership; between the administration of rules and regulations, and employee engagement and development.

The Impact of This Evolution

Mercer’s latest research indicates that 66% of organizations are prioritizing improving people managers’ skills, while 58% are focusing on enhancing the employee experience to attract and retain top talent. This dual focus demonstrates the growing recognition that both traditional HR and culture-building are essential for organizational success.

An Example:

Let’s start with a specific example, hiring.

When it comes to bringing in new employees, the human resources department spends its time on the boxes that need to be checked; I.e., recruiting, interviewing, hiring, onboarding, maintaining employee documentation, and separations.

Meanwhile, the People and Culture team focuses on the employee journey and experience; from recruiting through separation, from the interviewing philosophy (recruiting as well as screening), ongoing training and professional development, and how the company needs to intersect with the employee’s career goals.

Key Differences between a Director of HR and a Director of People & Culture at a Glance

In an organization with both a Director of HR and a Director of People and Culture, HR spends more time on operations.

When to Hire a Director of Human Resources

Hiring a Director of Human Resources is the right way to go when the company needs an executive to own one or more functions beneath the HR umbrella; talent acquisition, benefits, compliance, employee health and safety, benefits, etc.

A Director of Human Resources constructs company policies and enforces them. This leader often works behind the scenes. They are the architect of policies and then they are responsible for executing them. Conversely, the Director of People and Culture is a more outward-facing position.

In growing early to mid-stage companies, the ideal Director of HR will be a subject matter expert in both HR and people and culture. They must be fluent with policies, compliance, legal, benefits, etc., the core competencies of HR.

However, because day-to-day HR administration is time-consuming, combining HR and people and culture responsibilities to one executive will not work at scale.

When to Hire a Director of People and Culture 

When a company wants to adopt a people-centric approach, it should consider hiring a people and culture leader.

Often this leader reports to the head of human resources to concentrate solely on the people and cultural aspects of the organization. Depending on the organization’s goals, the Director of People and Culture typically owns employee relations and builds a culture that promotes growth, productivity, and innovation. They play a key in role if a company needs to transform how a it attracts, develops and retains the human beings that execute the company’s strategic vision.

This executive is very visible within an organization. They are responsible for the policies that improve the employee experience. The Director of People and Culture is the employee advocate to the leadership team. Additionally, they open a two-way dialogue with employees to get honest feedback from the people.

Positioning an Organization for Success