Innovative companies rely on both their HR and finance departments to come together and formulate an efficient and talented workforce. Many times, this is easier said than done. Collaborating to find the best staff the enterprise can reasonably afford is a huge but necessary undertaking. CEOs need both their chief financial officer and chief human resources officer at the decision-making table to provide insight before making strategic business decisions that'll affect the company as a whole.
The only problem, though, is what's lost in translation whenever HR and finance try to communicate. HR professionals speak in terms of finding the right pools of talent and what kind of staff engagement and benefits the enterprise may provide to keep employees happy and with the company. On the other hand, the finance department looks at the costs incurred by hiring, benefits offered and any activities held to increase staff contentment.
To come up with a plan that works, HR must flex its muscles and learn not only how to analyze data sets, but also use that information to formulate strategic decisions.
Speaking with data
Companies can use human resources business process as a service, otherwise known as HR BPaaS, to outsource more of the essential and regulatory paper-pushing tasks such as payroll and benefits compliance. However, companies still need their onsite HR professionals to do more of the complex, long-term planning. To make these important decisions, HR needs to be just as data-savvy as the finance department.
While all human capital potential cannot be quantified, HR must embrace data and the technology needed to make sense of it. Personnel Today noted HR professionals can make their lives easier by using more tech to solve the little tasks such as scrolling through mountains of job applications. Human resources will always require the "human" touch and brain to assess candidates and solve problems, but in order to perform its duties, HR needs quantifiable data just like the finance department.
In other words, HR must make strategic decisions with real numbers instead of going with its gut, according to The Society of Human Resource Management.
"There is sometimes this tension between 'do we make this data-driven or human-judgment-driven?'" John Beshears, an assistant professor of business administration at Harvard Business School, told the SHRM. "You don't want to divorce the two; they're linked. The human decides how to weight different aspects of the problem, for example."
Just as the finance department of a company uses the bottom line as well as business forecasting to determine budgets, HR must do the same with the data sets available to it. If HR uses hard data to back up its points and arguments, then the finance department and the CEO could show the CHRO more deference.
Helping to make the big decisions
HR can only start to solve the problems it's tasked with until it has clear data at its fingertips. In fact, CEOs want their HR departments to step up to the decision-making plate and a CHRO can get there if he or she employs technology to big data to help make strategic decisions.
Entrepreneur noted a growing number of CEOs want more advisement from their CHROs when it comes to making critical judgments based on human capital and resource allocation. Therefore, HR must use big data solutions that can measure the productivity of its current workforce and show it where improvements can be made.
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