Welcome to this week’s Discuss HR, the blog written for and by members of Human Resources UK.
I was reading via Twitter yesterday an HR Director commenting that he had been in a meeting with another HR Director whose views were that HR should be removed from any business decision and should purely focus on the resulting actions. I am sure you will be as surprised as me by that view, which is why today’s post is particularly apt. Returning blogger and HR Director Sheena McLullich looks at the relationship between HR and Finance. (Ed Scrivener)
Finance and HR – a pivotal relationship?
I joined a new organisation recently and I suspect that I caused more than a flicker of surprise amongst its senior managers when I asked to meet the Finance Director before deciding whether to accept the role I was being offered. I’d already met the Chief Operating Officer (to whom I now report), the CEO and a Managing Director but, for me, my ‘due diligence’ would not have been complete until I had spoken at length to the person who would be crucial in helping me to achieve success in my new role.
Although the relationship between HR and the operational and executive functions of any business needs to be strong and founded on mutual respect and collaboration, I think that the relationship between HR and Finance is pivotal to achieving great things. If the two functions can work together, despite sometimes conflicting priorities, then the CEO’s two greatest concerns – people and profit – are much easier to manage.
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| The annual HR v Finance tug of war contest was always fun to watch! |
As an HR Director, I’ve seen this work (and fail) spectacularly, so I can speak from experience. I’ve worked with some fantastic finance professionals over the years. There was D-----, who spent ages patiently teaching me the idiosyncrasies of cash-flow forecasting to help me through the accounting module of my degree. D---- was brilliant at conjuring up an Excel formula to speed up the most intricate reporting requirement. N---- knew the business so well that he could spot potential trouble-spots, and tell me about them, long before I knew there was anything brewing. M------- gave me some really useful insights into the company culture which made it much easier for me to introduce new initiatives, knowing in advance that they would work.
The common factor with each of these people was that although they were finance specialists, they also had huge amounts of business acumen and understood their businesses thoroughly. Isn’t that also a key requirement for HR professionals? Are we any different from our finance colleagues in that respect?
I would argue that there are a lot of similarities between the two professions. If Finance is fully integrated with the business it serves, there are huge benefits in cost management and control. The Finance function understands the business and can therefore plan investment and expenditure to meet trading patterns rather than simply reacting to events that have already occurred. Similarly an integrated HR department can pre-empt people issues and can act quickly to resolve them before they become problems. It’s all about being visible in the organisation, talking to people, understanding their needs. Yes – and being commercially focussed.
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| The results of collaboration |
The best Finance Directors and CFOs that I’ve worked with are the ones who take the time to get to know their fellow Directors and their colleagues in other departments. They are the ones who you see out and about, talking to employees and not hiding away behind closed (sometimes locked!) doors in the Finance Department. With such open communication channels, nothing comes as a surprise and in today’s tough financial climate, that’s a real bonus.
In my opinion, the relationship between HR and Finance should be a partnership – two distinct specialisms but working together as equals to support the business’s most important assets. For that reason, it doesn’t feel right to me that HR should ever report to Finance and I know that I couldn’t work in an organisation where that was the case. I know that this happens in some organisations and if that’s your experience, it would be good to hear your views. Perhaps it depends on the calibre of the CFO and their willingness to collaborate and share differing opinions rather than a single-minded pursuit of profit. I think I know which I’d prefer to work with!
About the author
Sheena began her career in Training & Development before moving to a generalist HR position in 1998. Since then she has held senior HR roles for several SMEs in a wide range of industries. A Fellow of the CIPD and Member of the US SHRM, she has a keen interest in Employee Development, specifically in coaching and supporting managers to enable them to get the best from their people. She was appointed as Director of People for SPA Future Thinking in September 2011.
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Discuss HR is the blog for Human Resources UK, the leading LinkedIn group for those involved with HR in the UK. Next week’s Discuss HR will be published on Thursday 8th December when we shall welcome our latest guest writer, Lean Management Coach Mark Greenhouse.
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