Finance and human resources are two separate business divisions in many corporations. Finance supports organizational goals by keeping expenses and revenues in check. HR employs, recruits, and inspires employees to further these same objectives. Although they are two distinct functions, teamwork between HR and finance is crucial.
Several factors need to be taken into account for an HR and finance relationship to succeed:
- What is the mission of the organization, and how do these two departments fit into it?
- Do the various departments understand one another’s roles?
- What overlap—in tasks, people, and resources—does each have, and how can it be most effectively tapped into?
The HR and finance departments should collaborate more often to better understand how money travels within a business. It will take work to engage the other business partners in a novel, cross-functional approach by stepping beyond each department’s usual roles. The crucial question is what each function needs to do in order to respond.
It’s critical for HR professionals to have a firm grasp of the financial facets of running a corporation. Cost-to-hire, remuneration, benefits, and labor laws are some HR-specific metrics that the financial industry should be aware of. It’s essential to understand and put these ideas into practice if you want to promote a productive HR and finance relationship.
The need for a successful HR and finance partnership must be presented to senior leadership in addition to understanding each other’s areas of competence. This indicates that the CEO has direct access to the departments of HR and finance. Fostering a partnership between HR and finance will improve both parties’ alignment with a company’s strategic direction. Both parties must have a firm understanding of the organization’s goal in order to accomplish this.
Organizations can make smarter decisions by developing workforce analytics that can forecast how important workplace performance indicators may affect specific outcomes (such as increased or decreased attrition). Other areas where collaboration between HR and finance can be leveraged include forecasting human capital, identifying high performers, and assessing turnover risk.
For a corporation, removing the barriers between the finance and human resources departments can be very advantageous. An HR and finance partnership can be genuinely effective when there is knowledge of the linkages to the firm’s overall strategic goal, comprehension of each other’s mission, and critical evaluation of their joint value in supporting that vision.