As businesses grow and expand, departmental collaboration between the finance and HR teams is imperative.
As organizations grow and expand, they often face two common hurdles: access to the required funds for growth and managing talent needs. These parallel issues make it imperative that the finance and HR teams are focused on successful department collaboration. To encourage strategic growth, CHROs must build and maintain a strong partnership with the CFO — and vice-versa. CEOs as well as employees rely on a succesful working relationship between these two members of the leadership team.
"Both these roles have risen within the corporate hierarchy," according to EY. "It has become common for them to report directly to the CEO and to be peers on the management team. This has coincided with a broadening of both CFOs' and CHROs' responsibilities to be more strategic and commercial, and less siloed and specialist."
What Do CHROs Wish CFOs Better Understood About Their Job?
If CHROs and their teams are to be successful in recruiting, retaining, developing and managing the performance of an organization's workforce, CFOs need to understand the primary challenges HR leaders face. The Society for Human Resource Management (SHRM) indicates there's a discrepancy between how CHROs evaluate their challenges as compared to their executive-level peers. "Almost 70% agreed that executing HR processes smoothly and efficiently under constrained resources such as time, staff, technology and finances was today's top HR function challenge," reports SHRM.
The good news? These were also the top challenges identified by executives outside of HR. The bad news? The percentage of other C-suite executives who say this was an issue was a mere 37 percent — indicating these top executives have different views and may not fully comprehend the gravity of the challenges facing HR.
What Can CHROs Do to Help Support Department Collaboration?
When CHROs and CFOs work together as partners, it's possible to gain executive support from all areas of the business. Rather than waiting for an invitation, HR can take the initiative to bring the two departments together by:
Collaborating to identify and address risks
The first step for HR leaders is to collaborate with CFOs to identify areas of risk and need, and then create a strategy that meets organizational goals while also addressing the CFO's concerns about talent management investments (e.g., wage growth, HCM systems and LMS platforms). HR should start with the most common challenges and then work with the finance team to mitigate risk with a financially-savvy approach.
Influencing departmental collaboration
Strained relationships are at the root of ineffective department collaboration. By serving as a role model and actively partnering with the CFO, an HR leader plays a vital role in demonstrating how the finance and HR teams can accomplish their individual goals, while also working together to achieve organizational strategies.
How Can CFOs Support Their CHRO Peers?
One of the ways CFOs can best support their CHRO peers is by providing the financial data and information necessary to make decisions for HCM strategy creation and implementation. Not only do CFOs have access to essential data related to costs and projected costs associated with HR strategies (e.g., HCM implementation, project costs, labor needs), they can provide context and insight regarding how these costs integrate and impact financial concerns across the business.
When the CEO, other executives and employees see the CFO and CHRO partnering around the HR strategy, it can send an important message: investing in HR initiatives is a critical component of the organization's success. By working together as a partner with the CFO, it's also more likely the CHRO will gain executive support from other areas of the business. This type of support will not only help drive the HR strategy forward, and also serve to empower employees and build momentum to reach the next level of success.
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