3 Ways HR Can Back up the CFO
Being a CFO requires excellent communication with several departments: IT, management, and HR. Communication is a two way street, however, and an effective relationship between the CFO and HR manager can bolster productivity.
There are several things an HR manager can do to support the tasks of the CFO on a daily basis. Take a look at some ways Human Resources can contribute to the duties of the finance department.
According to a recent study of 550 finance leaders and HR managers, 80% said their relationship had become increasingly collaborative over the years.
One reason for this is that the workforce is often a company’s biggest asset as well as its biggest expense. A survey of over 700 companies showed that human capital accounts for nearly 70% of total operating expenses.
But unlike physical assets, which CFOs measure, manage, and hold dear, human assets are harder to control and impossible to predict. Therefore, it falls to the HR manager to control this particular asset and predict its future value for the company.
Regular meetings with the CFO to discuss manpower, as well as how it can be efficiently allocated, are essential for the successful future of the company.
Though it’s usually the CFO who is championed as the master measurer, the HR manager can work to apply analytics to the workforce as a whole. Doing so helps provide both the HR manager and the CFO information about what’s working and what needs to be adjusted to accommodate the budget. It’s important to remember that analyzing the workforce is a continuous process.
Productivity and engagement can fluctuate rapidly, so sending out an annual company survey is not enough to assess the efficacy of HR initiatives. Consider the HR manager as the Chief Company Health Officer.
By having an up-to-date picture of what employee engagement actually looks like, HR managers can detect possible risks and address them before they become a drain on company finances.
Develop A Strategic Plan
There’s a tendency for the CFO to be a harsher critic of the HR department than of other departments, when in reality, he or she is just waiting for the HR manager to take on a larger role in strategic planning.
A good HR manager can recognize issues that matter to the CFO, like those that impact the future of the company, and apply creative problem-solving techniques to these concerns. Sean Huurman, Chief People Officer at Imagine Communications, has this to say about developing a strategic plan:
“I believe that it all starts with the workforce strategy, which then drives the financial strategy. So many organizations have that backward…we first need to understand the requirements of the business and the talent and skill-sets that we will need.
We can then take that back to the CFO and say: ‘Here is what our business leaders are telling us, and here is what we believe the cost associated with the transformation will be.”
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