FD's view: time to bond with HR
For too long finance and HR departments have been isolated from each other.
While finance and HR directors might sit around the same boardroom table,
rarely do they share the same view.
While it is easy to assume that bean-counting must always be at odds with
HR’s nurturing role, such a view is inaccurate and naive.
Any successful organisation will be well aware that recruiting and training
is expensive, and that disenchanted employees are bad for the bottom line. Who
better to drive awareness of this than the FD? Maintaining an efficient,
motivated workforce is an area where HR and FDs can stand united.
It makes business and financial sense for organisations to focus on staff
retention and to put in place processes that foster continuous development.
Corporate social responsibility programmes are also proven to increase employee
commitment and satisfaction.
But without the information systems to analyse and interpret HR initiatives,
finance and HR directors are acting in the dark. In order to deliver better
value to the business, the impact of HR strategies must be evaluated. No amount
of dialogue between HR and FDs will achieve a meaningful outcome unless their
separate systems are integrated.
The recently enacted operating and financial review has the potential to
change the way that finance and HR work together. The first OFR assessments are
due to be published on 1 April next year, and UK-listed firms will have to
evaluate the true impact of business decisions on the bottom line.
Forward-thinking organisations will investigate how better to assess the
contribution of employees, in recognition of the fact that the health of the
business hinges on the actions of its workforce as much as on the figures in its
balance sheet.
Companies that can correlate HR and finance data to capture a true image of
the business give the insight to propel the business forward. But where HR
chiefs and FDs act as adversaries, better decision-making is a pipedream.
Norman Green is vice president of finance at Oracle UK, Ireland and South
Africa. He joins law firm Herbert Smith as COO later in the year