You might ask yourself why should HR and finance departments work in conjunction with each other? They operate in two very different sections of your business – the former recruits and handles personnel problems as well as rolling out and educating employees about benefits, while the purpose of the latter is to ensure the numbers look good.
However, these two departments are just two sides of the same coin and what one does always affects the other. Therefore, an innovative company cannot afford to silo these two sections. The rest of the executives in the C-suite must encourage finance and HR leaders to combine their efforts if they wish to work smarter, not harder.
Coordinating both departments only makes sense nowadays as HR and finance handle the two forms of capital that keep a company going. As health care costs rise, HR and finance must work together to find health coverage benefits that are not only good for the business’ employees but also cost-effective for the organization. Bringing both departments to the decision-making table is crucial for making the best selections.
If both departments want long-term solutions that work for their company, they must align their thinking and goals. Finance is more attuned to future strategic planning while HR sometimes makes quick decisions regarding benefits, the Deloitte story explained. However, if both departments work together, they can keep the other in check and find a solution that works to locating benefits affordable in the long run for their employees. According to a Deloitte article published in The Wall Street Journal, HR and finance can help their companies by combining their different ways of thinking and talents. This especially comes in handy when developing a benefits package for employees. Instead of zoning out whenever funds or benefits are discussed by their respective department, these two must learn the language of each other’s area.
Where the confusion occurs
Many times, the thing that keeps HR and finance from collaborating to solve issues effectively and efficiently, is the language barrier. The Society for Human Resource Management (SHRM) advised CHROs and the rest of HR to learn finance’s language by using numbers in its speeches and memos. While HR does deal with the people side of the business, it must show those employees as human capital numbers to the finance team. If the company needs more staff for a particular department or project, the CHRO must think in terms of return on investment or ROI and show finance why the business requires more resources. Not doing this could just lead to the CFO brushing HR off.
Not many HR directors want to count people as numbers, but in order to impress upon finance the importance of employees, they need to show the CFO the cost versus the ROI of talent. Using figures helps HR drive its point home. SHRM’s article noted using metrics and quantifying pools of talent is necessary since many organizations from public companies to nonprofits all speak the language of finance but very few – if any – speak HR.
If HR can quantify the extent of its company’s human capital, it shows not only the CFO, but also the CEO, just how important it is in regards to strategic decision making. Having both HR and finance on the same page empowers the business as a whole and including both departments at the table is necessary for any business wanting to succeed.