Chief HR officers will need to take on new roles to succeed and drive company growth, according to HR & Talent Management. HR professionals need to act as architects who structure the company, experts, coaches, strategic data analysts and employee advocates. This can add to the mounting pressure this team already faces.
Focusing on growth and employee development helps put HR managers into the mindset of people operations. In the past, the heads of HR were typically generalists, but now they need to evolve to provide a great experience for the people who work at the company. This requires an in-depth knowledge of HR processes and digital systems for recruiting and managing talent.
Why are these changes necessary?
If you aren't convinced that HR needs to evolve, you may want to consider how strong the competition is for high-value employees. The hires with the desired tech skills have a lot of choices in where they accept a job offer. A disconnected recruitment process could cause them to take a job somewhere else. In addition, the wrong benefits structure or lack of employee engagement initiatives can cause people to leave. Employee attrition is costly and can prevent companies from meeting their strategic objectives.
Many companies are changing their operational models to meet the challenges of the marketplace, and this means a shift in how HR is seen, Ernst & Young stated. Being seen as an innovative business means progressing beyond the traditional approach to HR and finance. Companies are becoming more data-driven, and HR leaders are being included in strategic decisions. Although HR was once seen as a support function, many CFOs are realizing how important human capital management is. In fact, higher performing companies typically have more aligned HR and finance teams. Not only does this result in better business outcomes, but it also boosts agility. Companies can more readily adapt to changes in the marketplace with this strategic relationship between the CFO and HR leaders.
What can HR and finance learn from each other?
As companies put more emphasis on people operations, the relationship between HR and finance will become more important. As the old saying goes, people are a company's greatest asset. However, they are also one of the biggest expenses, a separate report from E&Y revealed. Attracting the best hires requires the right benefits, but this can lead to high expenses and a lot of waste.
Ultimately, finance and HR are connected by people, but for different reasons. The CFO has specific growth goals in mind, and HR needs to find the right people and retain these hires. CFOs are often driven by hard data, but people are harder to predict and manage. Because HR leaders may focus on less tangible metrics, this relationship is often strained at many companies. However, organizations with a partnership between the two executives have more reliable HR metrics.
High-growth companies need to put these differences aside and realize the potential of this essential relationship. Not only do companies with a working relationship between finance and HR have better financial growth, but they also boast stronger employee engagement and productivity. In high-performance organizations, these executives spend 50 percent more time collaborating than in other businesses, according to the report. In fact, finance and HR leaders have strengthened their relationships in the past three years to meet the changes in the business world.
A strong partnership between HR and finance leads to better decisions and a deeper understanding of what motivates the workforce. A relationship with finance can open the door to effectively utilizing data in the HR department. Plus, a high degree of collaboration may help the company reduce waste when shared metrics are implemented.
Competition for the best talent is only going to get stronger, which may increase the importance of collaboration between HR and finance. Executives who can see beyond the traditional elements of their roles will be better able to get the results they want.