Every department has its natural adversary. Much like sales and marketing exchange glares and snubs in the staff canteen, so HR and finance gossip about each other at the water cooler.
But sales and marketing can be so much stronger when they work together. Likewise, HR and finance could make the perfect partnership if only they could stop bickering.
It’s like a classic Hollywood rom-com: the mismatched pair who can’t stand each other until they suddenly realise they had more in common than they thought. They have a lot to learn from each other. You can practically hear the orchestral strings swelling as I write this.
The trick is working out why this war started and how to get past those shameful stereotypes that prevent HR and finance getting together.
Act one: the opening conflict
At first the protagonist couple look like they have nothing in common. The worst possible match you can imagine. Often, they pretty much hate each other.
- Finance manages budgets. HR spends them without bringing in any revenue.
- HR tries to nurture talent in the company. Finance says ‘no’ to every new scheme.
As Samuel Dergel puts it, ‘HR deals with people, whose costs are usually the largest expenditure in a company, while finance is mandated with managing costs.’
HR wants to hand out benefits, invest in training and set up new costly schemes much to the chagrin of finance who just see a big column of outgoings, without anything listed in the income column.
Act two: the not-so-shocking similarities
But of course, there are important similarities running just below the surface. The pair understand more about each other than they realise.
The key thing to realise is that neither HR nor finance directly drive revenue — they both support it. They are interested in making the most of company assets but neither deal with clients or customers.
For finance those assets are, well, financial. For HR they are people and teams. And not only do both departments manage important assets, but those assets are closely interconnected.
What finance manages in terms of salaries, bonuses, expenses and purchase orders all track back to the expectations and culture created by HR. And the success of talent acquisition and retention schemes by HR rely on finance’s support.
Act three: the surprise get-together
The little sparks of romance start flying when one person reveals a little insight that’s amazingly poignant for the other. The pair are not so different after all.
So it goes with HR and finance.
Dergel’s firm conducted an online survey of 40 CFOs and found that 83 percent want help with talent management and over half want support with succession planning. You know who can help with that? HR. If only HR could view finance as another business unit, they’d realise how much they could do for them.
And in return? Recent research by Thomsons found that UK workers under-appreciate their benefits package by the equivalent of a luxury holiday (over £1,400 per employee).
At the same time 84 percent of HR professionals believe that valued benefits will play a vital role in improving staff retention and over two thirds think it will do the same for engagement.
The missing link is the ability to effectively communicate to employees the value of these benefits. And who could help with that? Finance.
Epilogue: the friends who already knew
No rom-com would be complete without the ‘well duh!?’ moment from the best friend. Of course, everyone else knew the battling pair were secretly a perfect match. And it’s no different with HR and finance.
Back in 2009 CIMA (Chartered Institute of Management Accountants) – the wise but quirky-looking mutual best friend – funded research that found,
The closer the co-operation between finance departments and human resources (HR) departments on areas like bonus schemes, the better the organisational performance will be.
And to top it off, the CIPD (Chartered Institute of Personnel and Development) and CIMA announced a ‘strategic collaboration‘ back in 2013:
The aim is to foster closer working links between the finance and HR professions, helping to increase their combined impact on business performance.
With such a proliferation of ‘people data’ made possible with cloud computing and better analytics, the two functions have the opportunity to integrate the idea of financial and people assets even further. Charles Tilley, chief executive of CIMA explains,
By working together, we hope to show that accurate and relevant reporting on an organisation’s people, as well as on its financials, provides real insight into the true health of the business, on which sound investment decisions can be made.
So now you know just what a perfect pair HR and finance could make, I guess the only (metaphorical) question left is: Will the curtains close on a kiss?