Human-capital issues are top-of-mind for CEOs around the world — but their regard for the HR function remains perilously low: In a PwC study, only 34% said that HR is well prepared to capitalize on transformational trends (compared with 56% for finance).

Sadly, chief executives aren’t the only ones with this negative perception. It’s pervasive in organizations — and to make matters worse, HR practitioners have inadvertently played into it. In its “State of Human Capital” report, McKinsey found that people in HR still largely have “a support-function mindset, a low tolerance for risk, and a limited sense of strategic ‘authorship’” — all of which has led to “low status among executive peers, no budget for innovation, and a ‘zero-defects’ mentality.”

Though many HR managers would take exception to those findings, they do, overwhelmingly, want more of a strategic voice than they have now. Look at any HR discussion forum, and you’ll find some version of this question: How can HR get a “seat at the table” and become a strategic business partner?

I’m going to suggest that HR — at least in its current form — shouldn’t be a strategic partner. A few months ago, Ram Charan proposed splitting HR into two parts: one to oversee leadership and organization, and one to handle administration. That was a useful conversation starter. But companies should dice up the function even more finely. Instead of grouping all the people-related activities together under HR, businesses should organize them according to types of service provided — and move a couple of them to other functions altogether.

Consider Deloitte’s service delivery model, which divides activities into four categories: site support, transaction processing, center of expertise, and business partner. In this model, the bulk of HR services fall into the first three categories, where a cost-cutting mindset makes a good deal of sense. Examples include payroll, benefits, risk and compliance, and labor relations.

But talent acquisition and learning and development are altogether different — and they should never be done on the cheap. These areas fall under the fourth rubric, business partner, because their managers need a strong understanding of strategic priorities in order to recruit, prepare, and engage employees to meet them. These managers also bring a valuable perspective to the table. Together, they understand labor market trends and instructional design, which can inform a company’s strategy to “build” or “buy” talent.

First let’s look at talent acquisition. It’s critical to bring in the right people to drive the business forward. The thing is, the labor markets and relevant skills vary widely from function to function. Smart recruiting requires an intimate understanding of the work to be done and the skills needed, as well as the function’s business plan (to forecast demand). That’s the specialized insight required to develop the right sourcing and recruiting strategy. HR often centralizes talent acquisition in order to minimize costs, and that’s short-sighted. Saving a few hundred dollars per hire may seem like a quick win, but a bad hire can cost more than $50,000.

For its part, learning and development should enhance employees’ ability to further the company’s mission, mold future leaders, and build strong teams. But companies aren’t seeing it as the strategic opportunity it is — and that’s because of its placement in HR. I recently spoke with an HR executive at a Fortune 500 packaging firm in the Midwest whose annual budget for the entire high-potential development program was $10,000. That is not a vote of confidence.

You can see this low-value mindset play out in other ways. HR managers adore e-learning, for instance, since they have been conditioned to evaluate everything on cost and scalability. Indeed, according to the Association for Talent Development, nearly 40% of corporate training in 2013 was delivered through technology, and that number is projected to grow. Unfortunately, a lot of e-learning is just plain awful. My company recently surveyed 525 Millennials (people born after 1979) to understand their views on learning and leadership development. Though e-learning was among the most prevalent forms of leadership training, it ranked among those with the least impact — and it was the least desired among all other options. Tech-savvy Millennials are the most likely leaders-in-training to embrace e-learning, yet even they don’t.

Companies will really start feeling the consequences over the next decade. Millennial Branding and Monster.com found that one-third of Millennials rank training and development opportunities as a prospective employer’s top benefit. Cutting corners in this area may jeopardize employee engagement and retention in a demographic that will represent 75% of the U.S. labor force by 2025.

A centralized HR department is ill equipped to address this. But embedding learning and development — along with talent acquisition — within each business function can solve the problem because it will shift the focus from cost reduction to value creation.

By reorganizing HR activities along the lines of the service delivery model, companies can free their cost-focused services to provide excellent support without having to grapple with illusions of strategic grandeur. And they can empower the truly strategic services — talent acquisition and learning and development — to create value without having to view every decision through a cost-cutting lens. At the moment, business leaders are searching for a strategic partner to help them navigate the critical human-capital issues that will make or break their companies. The time has come to give them not one partner, but two.