HR and finance align on cost reduction, but not partnership

Dive Brief:

HR and finance don't align on how they view their partnership, according to a workforce survey of more than 400 HR and finance leaders conducted by OrgVue. The workforce analytics and modeling company found that almost half of HR leaders believe allying with finance is productive, but only 25% of finance professionals felt the same way. According to the report, less than a third of HR and finance departments share processes and reporting systems.
In other results, OrgVue found reducing costs is the biggest challenge for 64% U.S. employers. About half of those polled said they aren't sure whether their best talent is performing the critical work. The report also uncovered that slightly more than half of U.S. companies work on diversity reporting and only 27% work on gender-based pay gap reporting.
“Although there have been significant strides in workforce analytics, HR and finance functions still do not collaborate at the levels that they need to, according to our research. Leveraging data to break down these silos can create significant value and ensure more agility,” said Russ Clarke, president of OrgVue, North America, in a statement.

Dive Insight:

The report uncovered insights not only on the relationship between the HR and finance departments, but also on the division of expertise in today's workplaces.

HR has long recognized the need to align its operations with their organizations' financial goals, but the task requires greater involvement with and understanding of bottom-line initiatives. In a 2018 Paycor survey, 61% of CFOs did not believe HR impacted their organization's bottom line, and nearly half of the HR leaders polled agreed. A stronger partnership between the HR and finance functions can help both parties work toward common goals, though it may require HR actively pitching its perspective and its people-centric data to other leaders.

HR and finance have distinct areas of expertise, but they can complement each other. As the leaders of human capital management, HR professionals understand the value in hiring, cultivating and sustaining a knowledgeable, highly skilled workforce — viewing workers as the most vital resource. Though less in touch with people trends and needs, finance understands that the strategic distribution and cultivation of resources is critical to an organization's growth, too. Seeing workers as an investment may require reeducating finance pros, Eric Hansen, CFO/COO at RedPeg Marketing, previously told HR Dive.

"For me, it's about changing the mentality. You don't treat employees as an expense that negatively affects the bottom line, but instead you look for ways to invest in the staff (professional development, culture initiatives, company growth opportunities, etc.), so we can all grow together," he wrote in an email. With mutual goals to reduce operating costs, HR and finance may want to continue fine-tuning their partnership.