Finance’s Secret Weapon for Organizational Efficiency ⚔️

How’s your relationship with HR? Studies show that despite the incredible importance of this relationship, only 45% of HR professionals feel like they have a good rapport with their finance counterparts — yikes.

Why do these gaps exist? And how can we close them? 

We spoke with Tracy Edkins, CHRO, Board Member and Advisor to break it down ⤵️

How HR and Finance Go Hand-in-Hand

HR has one driving goal ➡️ attract and maintain a skilled workforce that’s motivated to do their best work toward common business goals in a safe, supportive, respectful and secure environment.

It’s no secret — people expenses often come with a validated premium… but organizations can only thrive with the right workforce.

Finance has a powerful ability to look externally, understand and organize data and make strategic decisions to push a business forward within an industry’s environment. 

Together, the two teams sit at a unique intersection of business that can push an organization forward and empower employees across all teams.

As the economy sparks a shift towards efficiency, organization design ultimately takes the spotlight — an incredibly delicate system that’s ultimately a compromise between your people and the work you’re trying to get done. 

The True Magic of Teams Coming Together

Disjointed, HR and finance can seem at odds, particularly in a tight economy. But when the two can come together, businesses see:

✅ HR leveraging external perspective, learning how the company’s performance compares to others and adjusting.

✅ Finance leveraging an understanding of internal functions and team well-being to drive financial strategy and influence performance.

✅ Both embracing a strong educational communication style to ensure company performance and employee satisfaction (and support) stay in check, optimal and efficient. 

Tension and How to Minimize It

The biggest driver of HR-finance tension is a lack of understanding of the breadth, depth and complexity of each other’s roles. Fortunately, there are a few things you can do to minimize the tension and bring teams together.

1. Build trust and assume positive intent

A negative HR-finance relationship looks like this:

• HR is seen as a cost center 

• Finance is seen as the cost police

In this case, the teams are pitted against each other. But in reality, both share a goal: to drive the business forward while retaining happy, productive employees.

Shifting the narrative requires building an understanding of each other’s roles and working as a strategic business partner. While HR is responsible for attracting, hiring and retaining top talent, the purpose of the role can get lost in translation. Every move HR pushes for should be for the betterment of the organization. 

Finance needs to sit with their HR professionals to get to the root of employee struggles and design the optimal organization for efficiency and effectiveness.

Likewise, the limitations finance must work within (and there are always limitations) aren’t meant to restrict workforce efficiency or productivity — they are meant to enhance operations. 

Multiple truths can exist, but until teams can communicate in an educational, collaborative way, they won’t be able to see the other side.

2. Regular team rotations

Want the ultimate HR-finance partnership? Partner one individual from each team to focus on a single department in your organization. 

And here’s the important part — rotate them to different departments every two years (preferably staggering team rotations). 

When your professionals have a breadth of knowledge and understanding of the different functions within your organization, they serve teams better than if they work with a singular function long-term. 

Why? 

➡️ Long-term team placement can lead to bias 

When your finance leader is connected to a smaller function or department for too long, they can lose sight of the big picture.

➡️ Collaboration opportunity loss

Partnering with team members across the organization creates a better holistic understanding of team priorities. This allows your leaders to advocate for the needs (and business priorities) affecting other teams. 

In case you missed it…

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Peter Arrowsmith, Managing General Partner, JMI Equity has the answer. Turns out, there is no shortage of investment opportunities. But investors have evolved in how they choose which to pursue. Tune into our conversation.

What’s next…

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We share everything you need to catalyze your career and revolutionize your business. To hear the best advice from today’s finance visionaries, tune into The CFO Show today.