How a Partnership Between HR and Finance Can Move Your Company Forward In today's highly competitive business landscape, you can't have one without the other.
By Matt Straz Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
When it comes to business growth, the most pressing problems include a scarcity of funding and a shortage of human capital.
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The solution? A sound relationship between the chief financial officer (CFO) and the chief human resources officer (CHRO). But CFOs and CHROs don't always have their goals aligned: Their perspectives can be vastly different at times and one of these executive's initiatives may limit the reach of the other's.
Although CFOs and CHROs don't always see eye to eye, getting them on the same page and working together is critical to eliminate inefficiencies, work toward goals and achieve business success.
Create a powerful partnership between both of these key players with these three steps:
1. Engage everyone in strategic planning.
The first step is to get CFOs and CHROs involved in the planning process. However, in some companies, finances tend to take precedence over talent. In a recent report sponsored by Visier and released by Harvard Business Review Analytic Services (HBR-AS), 44 percent of the 323 CEOs surveyed said that their workforce planning was driven by finance and did not take talent availability into consideration.
If workforce planning is strictly focused on budget, however, companies risk missing out on top talent. Involving CHROs in the goal-setting process can create strategies that balance both finance and HR concerns.
Today, more and more CEOs are recognizing this fact, acknowledging the importance of incorporating HR's perspective. In fact, a July CareerBuilder survey of 88 leaders at companies with revenues of at least $50 million found that 65 percent of those CEOs thought that HR opinions carried increasingly more weight with senior management. What's more, 73 percent said their own HR leaders had provided data they had incorporated into their overall business strategy.
Takeaway: Allow CHROs to actively contribute when setting goals and creating strategies, and take their opinions as seriously as those of CFOs. Although CHROs are focused on human capital, their input improves the bottom line, too. The Careerbuilder survey found that 57 percent of respondents said HR executives could show ways to increase efficiencies and cut costs by better using the company's human capital.
2. Align HR and finance metrics with company objectives.
Data leads to better decisions, so it's important to use every piece available to guide goal-setting and achievement. But this doesn't always happen: Many organizations are missing a vital piece of the puzzle.
In the HBR-AS survey, 57 percent of company leaders agreed that data on positions and talent was required to meet business objectives, and another 57 percent said they needed data on what was happening with talent acquisition and attrition at their companies to improve workforce planning. In fact, many companies already have this data -- they're just not using it at the executive level.
These findings highlight the lack of communication between the hiring and business ends of organizations and a lack of understanding of what information is needed to meet objectives. Indeed, 57 percent of CEOs surveyed by CareerBuilder said HR executives could provide actionable talent data and other research to help them devise strategies to meet larger business goals.
The takeaway: CHROs need to analyze the data they have and use it alongside data from CFOs to drive business results. Data from both sides should be examined together to determine the best course of action to meet company goals.
Related: How to Keep Your Team a Team When the Company Starts to Grow
3. Implement an ongoing review process.
Once strategies have been set -- with input from both CFOs and CHROs -- you should set up an ongoing review process to test their efficiency. Considering that 48 percent of CEOs surveyed by CareerBuilder claimed their companies had lost money due to inefficient recruiting, human capital tactics need constant reevaluation in order to meet talent and finance goals.
The takeaway: Use workforce analytic tools and software that make it easy to track, analyze and share human capital data critical to the company's bottom line. That way, your CFO can review the results and work together with your CHRO to improve your company's business tactics.
How do your CFO and CHRO work together? Share in the comments below!
Related: Why You Need to Think Like a CFO
