When people think about the responsibilities of a Human Resources team, a few core functions come to mind. Talent recruitment, people management and organizational performance. For a Finance team, people likely consider business performance reporting and traditional accounting practices as their key responsibilities. From my experience at Motus, I’ve seen firsthand how the responsibilities of HR and Finance teams overlap to better the business.
As the Director of People Operations, I collaborate with the Finance Team on a wide range of initiatives. Those collaborations expand from headcount planning and annual budgeting. This overlap in responsibilities is due to today’s HR leaders having more influence in the C-suite. Studies show that CEOs are looking to HR to influence business strategy, as HR leaders continue to develop their executive-level skills. Finance leaders also benefit by involving HR to help them make better informed organizational decisions. According to a report by Ernst & Young, 80% of surveyed HR and Finance leaders claim that their relationship has become more collaborative over the past few years.
To make critical, informed business decisions, HR and Finance leaders must build trust between each other. Once that trust is achieved, they are in great position to manage change and implement new policies across the business.
Now more than ever, HR leaders have a “seat” at the executive table. We are involved in Board meetings and serving as advisors on key business decisions. Harvard Business Review finds that HR leaders are now tasked with greater responsibilities around predicting employee performance outcomes, diagnosing company-wide cultural problems and “unleashing the organization’s energy” to create value for the business.
This increased level of authority and involvement has changed the way HR leaders operate across different types of businesses. For example, at Motus, we’re empowered to play a significant role within our corporate strategy and deliver results that are aligned with that strategy. An effective way for HR leaders to influence strategy is to collaborate closely with the CFO or Finance leader. For example, how does HR become involved in maintaining business competitiveness? How can we show the Finance team the financial impact and ROI of things like company-wide employee benefits? Say we as an HR department save X number of dollars in our budget this quarter. How do we work with Finance to best allocate that budget elsewhere next quarter?
These scenarios show the importance of alignment between HR and Finance and the recognition between both teams to do what is best for both employees and the business. They also help to quantify HR’s impact on the company’s bottom line.
Without trust, HR and Finance leaders fail to collaborate in decision-making processes. They create silos and disconnect in how the business is run. Let’s consider the following scenario where your business is implementing a new expense management system.
Finance will likely play a major role in determining the cost, ROI, and overall benefit of the new system. HR’s role should be to create a solid change management plan that considers budget, timelines, communications, implications from an individual and organizational perspective, training, necessary resources, technology and documentation. In this scenario, there’s a tremendous opportunity for HR leaders to provide expertise and guidance that will have substantial impact on the success of the change.
HR should also consider the following questions and prepare to address them with Finance:
Following a well-documented change management plan that both HR and Finance agree on sets each team up for success and ensures aligned expectations.
Looking to be more involved in the strategic decision-making process across your business as an HR leader? A good place to start is by building trust with your Finance leader. Once you’ve established that trust, share your input on business decisions and offer your perspective and expertise. This will be especially impactful when implementing change or a new policy, as HR’s role should be to guide and influence these processes.
Strengthening the relationship with Finance is only one way to become a more empowered and trusted leader in your business. Stay tuned for more advice on how to empower your HR team in the next installment of the HR Hangout.
The HR Hangout is a recurring series on the Motus blog featuring advice from Jessica Chronchio, Director of People Operations at Motus. A proven Human Resources leader, Jessica has her Master’s Degree in Human Resources Management. She is also an active member of SHRM (Society for Human Resource Management). The topics covered range from empowering HR in the boardroom, best practices around people management, insights on industry trends, and advice for today’s HR leader.