There is an often-told joke where a CFO of a company asks the CEO, “What if we invest in our people and they leave?” – to which the CEO responds, “What if we don’t and they stay?” This illustrates a disconnect between the financial and people-focused HR arms of any business, and is a conversation you may hear today between the CFO and the chief HR officer (CHRO).
Communication is fundamental in any relationship. However, in too many businesses, the HR and finance departments may as well be speaking completely different languages. One is typically focused on hard-line costs and the other on value and potential. Yet, in today’s data-driven world, where timely and accurate workforce decisions are necessary, it is critically important for them to be in sync.
Technology is reshaping all organizations and industries. In the digital age, where anything and everything can be bought from just about anywhere, there is little differentiation between products and services. It means a business’ greatest asset and biggest distinction are its people.
This has fundamentally transformed the roles of the CHRO and the CFO, placing them on opposite sides of the same coin in managing this. For HR, the focus is on finding, training, and retaining talent, while the CFO’s attention is on managing people as an investment. This naturally means they should be working in tandem – but too often aren’t.
Partnering together is a requirement as businesses undergo digital transformation. Clear business decisions need to be made daily, and this is impossible if insights and data are silos within individual business functions.
Having a clear picture into the people and staffing requirements of your business now and into the future is a significant part of any transformation initiative. Far from a nice-to-have, having people front and center of your digital transformation program is a business imperative. Technology is a critical driver in bridging the gap between these two departments. It is simultaneously evolving what it means to be a CHRO or CFO by helping them work together.
Collaboration tools and IT systems are key in enabling this relationship. Rather than being a pure-play finance or HR system, IT solutions need to be built for CHROs and CFOs to use to share information and draw real-time insights from the same pool of data. It will enable decisions to be made around staff and talent by drawing on current information to see a complete picture. The technology to achieve this already exists and is no longer at a prohibitive price point.
While data can enable HR and finance to work together, a truly disruptive business needs to be built in a way that empowers departments to take advantage of these data insights. Organizations need to remove the traditional top-down structure that hampers collaboration in most businesses, and removing organizational silos is part of this process.
This is a process we’ve seen in some of Australia’s top businesses. Jetstar is a company where being agile and digital is second nature. This attitude is just as expected in the finance department as it is in customer service and IT. Race Strauss, group CFO at Jetstar, said: “It’s all about mindset. We’re an agile business, and we encourage fast failure.”
In practice, it has changed the way finance works within Jetstar and its connection with HR. Finance is embedded throughout the business now rather than sitting in its own department. The KPIs of the finance team have been changed to reflect this, and finance must now contribute to the broader team to be successful. “Embedding people, ensuring we have the right type of data skills, and the mindset of continual change is how we’ve responded to the new way of working,” Race added.
This is easily accomplished in any business. Finding areas of crossover between finance and HR and building specific project teams made up of both departments to address this is one way to avoid working in isolation. It’s a genuinely pragmatic way to break down silos and get people working together.
Both finance and HR will be critical enablers for the next frontier of business. The insights CHROs and CFOs will gather from working together will help businesses strike the right balance between building and bidding for talent in line with future growth. To get to that stage, it is critical for companies to help CHROs and CFOs to speak a common language to get the most out of them.
For more information on SAP SuccessFactors, the workforce of the future, the role of technology, and what these mean for HR, visit SAP HR Insights.
This article originally appeared on insiderhr.com.au. Republished by permission.