Published on the 04/11/2016 | Written by Newsdesk
CFOs and HR chiefs working collaboratively offers ‘potential immediate impact on business performance
Yet HR departments and the CFOs office have historically not worked as collaborators, according to Oracle, which also said the tide is shifting in disruptive companies where the two worlds of HR and Finance have begun to converge. The vendor said in a statement that companies are increasingly being tasked to rethink the traditional relationship between finance and human resources ‘to think more broadly, be more strategic and commercial, and less siloed in structure’.
That emerged at a recent business forum hosted by Oracle. “As companies seek to grow, the two most likely obstacles they will face are a scarcity of funding and a shortage of human capital. To overcome these finance and talent bottlenecks, CEOs are increasingly coming to rely more heavily on both the CFO and the Chief HR Officer,” said Tim Jennings, Ovum research fellow.
He said a growing number of organisations are turning to digital platforms that bridge the traditional divide between the two areas. “This allows both HR and financial decisions to be made based on the most accurate data available within the organisation.”
Steve Vamos, non-executive director of Telstra and Fletcher Building said that in ‘fast changing times’ business leaders have to shift their mindset, “To one better suited to the world in which we operate and that strongly enables the potential that people and technology have to achieve great things. This is particularly important when you consider the relationship between HR and Finance. While traditionally separate functions, organisations are finding closer collaboration between the two is generating big results. Working together, HR and Finance can more effectively support new initiatives, explore new ideas and raise productivity. This changed mindset can deliver immediate results and, over time, help boost the business bottom line.”
The forum highlighted a range of key areas CFOs and HR chiefs need to consider when striving to add value to their business. They included:
- The bottom line: CFOs and HR chiefs need to work together to reduce Cost-to-Income Ratios through the use of workforce modelling and strategic workforce planning tools.
- Breaking down business silos: Organisations need to strive to break down the traditional barriers that exist between the HR and Finance departments using collaborative tools.
- Shared metrics of success: Both HR and Finance need to be able to judge the success of their efforts based on similar criteria.
- ROI on top talent: HR wants to attract the best talent and Finance wants to keep costs contained. Methods to determine the ROI of new hires are becoming increasingly important.
- The cost of diversity: Diversity is on everyone’s agenda, however initiatives are not free. The cost of new programs needs to be carefully measured against results achieved.
- Productivity: Productivity is a priority for all businesses, yet it can have different meaning for different stakeholders. A clear, cross-departmental definition is important.
Sue Kent, HR head at consumer finance business Pepper Group, said, “While HR deals with people and finance is focused on money, it is vital to build a solid bridge between the two areas. The biggest cost to our business is people and so making sure we retain the very best and make them as productive as possible is important for future growth. It’s also important that no department has its own particular agenda. All must work together towards a shared goal. When information is presented to senior management, whether by one department or together, it needs to be consistent and accurate and this can only come from having a platform that spans the business.”
Pepper Group CFO Cameron Small argued that a flat management structure played a role in the company’s success. “Communication and collaboration is key, particularly when it comes to the HR and Finance departments. By understanding the priorities of each, informed decisions can be made that will help the organisation achieve its goals.”
James Finlay, Oracle HCM Australia sales director concluded, “No partnership has more potential for immediate impact on business performance than HR chiefs and CFOs collaborating to create cross-pillar efficiencies, plan a workforce of the future through workforce modeling and strategic workforce planning and increase efficiencies and productivity through changes to operating models.”