3 Things CFOs Need From HR Leadership

In today’s world, there really shouldn’t be a company where CFOs and HR leadership aren’t working hand in hand. Think about it: At the core, a CFO’s job is about managing resources to help the business grow and succeed. In most of today’s software and service companies, the primary resource is people.

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More business leaders are realizing this—according to a 2014 survey by EY, 80 percent of CFOs and CHROs say their relationship has become more collaborative in recent years. Plus, they’re seeing the benefits on both sides. The same survey shows that strong collaborators see significant improvement in both earnings and employee engagement and productivity.

If you’re ready to start building or boosting collaboration with your CFO and make a more agile organization, here are a few great places to get started.

1. Performance Management That Keeps Employees Productive and Happy

Performance management is probably already on your mind as an HR leader. The good news is, CFOs are thinking about it, too. That’s because better performing employees lead to higher ROI on the cost of human capital.

As the CFO I want employees to be productive.

“As the CFO I want employees to be productive,” explains Adi Dehejia, CFO at The Muse. “If they’re thinking, ‘Oh, there may not be a future here for me,’ or, ‘I don’t have a very supportive manager,’ it distracts them from really focusing on their job.”

By continuously checking in with employees to see how they’re doing and giving them regular feedback on how they could improve, you’re helping the company get more bang for its salary buck.

In addition, you’re reducing the likelihood of employee turnover. The cost of replacing a lost employee has been estimated at anywhere from 20 percent to 200 percent of that employee’s salary. Reducing this number is another major boost in the CFO’s eyes.

2. Strategic Handling of Hiring Requests

When it comes to growing the team, sometimes HR and the finance team can seem at odds. Let’s say an employee comes to HR saying they have too much on their plate. In many cases, HR’s natural inclination is that they should hire someone to ease that burden. But when they go to ask for the budget, the CFO says “no.”

This common story can lead to an adversarial relationship between the two departments, instead of one where they’re collaboratively working to address the needs of the organization.

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“If we had all the money in the world of course we could hire lots more people,” says Dehejia. “But in a case where we have a budget, how do we solve these business problems in a more creative way?”

He says it would be valuable for HR to not always jump to hiring as the first solution when teams feel overburdened. Instead, dig into what’s going on and if there are other ways to handle those needs. “It would be nice if the HR leader was more versed in saying, ‘Why have these new priorities come up? Is there something else we could deprioritize?’”

3. Training and Incentives That Drive Business Goals

While HR tends to focus on employees and CFOs on customers and shareholders, the magic really happens when the two departments think about those things in tandem.

“We have three sets of people that need to be happy for a company to succeed: the employees, the customers, and the shareholders,” says Dehejia.

While HR tends to focus on employees and CFOs on customers and shareholders, the magic really happens when the two departments think about those things in tandem.

For example, the CFO and the CHRO might work together to come up with an incentive compensation plan that drives business goals—instead of just building a plan based off market standards.

“To design incentive comp plans well you really need to understand what the business strategically is trying to achieve. What’s a good customer? What sort of customer behavior do we want?” explains Dehejia. You can then design incentives that pay employees competitively. Even more, incentives that encourage employees to sign deals with the right kind of customers that make shareholders happy.

To design incentive comp plans well you really need to understand what the business strategically is trying to achieve.

It also might mean creating new onboarding processes that, instead of simply focusing on signing paperwork and pointing out who sits where, help new employees deeply understand the business goals.

“If [employees] understand the business and understand what makes customers happy and successful, then they can see where their job fits into that,” says Dehejia.

Ultimately, this makes them more successful employees in driving business success.

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