HR and finance departments have sometimes found themselves at odds, since the goals and contributions of each have traditionally been viewed as focusing on different areas of business strategy. While HR professionals are dedicated to the efficient deployment of human capital, finance managers see themselves as a revenue generating center and often view human capital as a cost. The traditional roles of HR and finance are, however, shifting and they are finding that their focuses are overlapping more and more. After all, from a CFO’s perspective, profitability is the goal; however, that goal cannot be reached without a high-performing workforce devoted to meeting the same objective.
Of course, there is no functional company without a functional workforce. And there can be no workforce without careful management of necessary salary, benefit, and tax-related expenditures. Business owners and CEOs need to recognize the occasional friction between HR and finance and keep both departments working in harmony toward a shared vision of company success. Just as important, CEOs facing critical business decisions often need to choose between two sets of conflicting advice. The following considerations can help
1. The role of HR is rapidly evolving and expanding.
Unlike finance, the HR field is experiencing an ongoing series of expansions and shifts in scope. 30 years ago, HR managers faced different responsibilities and held very different skill sets then they do today. HR departments are increasingly finance-savvy, and are taking more direct control over benefit distribution and employment tax issues. To grant a 3 percent raise, HR managers once needed to wait for finance to find the resources and grant approval. But these decisions are now often falling under the purview of HR alone.
2. Finance is still a field and a profession unto itself.
Many CEOs are still not comfortable blending responsibilities in this way, and would rather cede budgeting, cost control and tax management to those with a specifically and exclusively financial background. Keeping a tight rein on personnel expenditures often means keeping the tension between finance and HR alive, and continuing to view employees as costs and disposable assets, rather than revenue sources and stakeholders in company success
3. Tension is bad for business.
At the end of the day, the most efficient and functional company will be one that can balance the conflicting interests of HR and finance and keep the two departments working seamlessly toward shared goals. As always, the key to a healthy relationship is communication. This, in this case, means open doors, smooth data sharing capability, and a clear mutual understanding of each department’s needs and contributions. The right software platform, like emPerform, can help maintain a steady flow of information between the two, and the resulting coordination can make HR and finance-based decisions easier for conflicted business owners.
Overall, as companies begin to realize that their largest expense and determinant of success is a healthy workforce – HR and Finance will find that their roles will evolve to work closely together to monitor and foster employee performance and company output. Technology is enabling each department to speak to one another in the universal language of metrics and data.