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The best business relationships are a true fusion of trust and understanding. It’s no longer accurate that an organization’s CHRO and CFO have to tussle over conflicting business perspectives or priorities. In fact, there are many ways in which the HR side of the business and the Finance side align on solid common ground. And when they do, businesses thrive. For instance, companies that invest $1,500 per employee on training see an average of 24 percent higher gross profit margin.
As a CFO, I am well-acquainted with this common ground. Finance executives might have a reputation for being all about the numbers, but remember: we’re people leaders, too. We want to develop an effective talent recruitment and management strategy to attract, develop and retain finance talent and the skillsets required to build excellence for our teams.
One of the best ways CHROs can engage with the Finance team is to offer ways they can help the CFO meet business objectives and drive value with specific HR technology solutions. Executing this effectively involves ensuring that talent-focused initiatives have mindshare and wallet-share at the executive table. Here are five tips to enhance the CFO-CHRO strategic partnership around talent management investments.
1. Paint a Great Picture
It’s easy to get lost in the details, but before giving your pitch, it’s helpful for CHROs to show how a talent management investment fits into the overall business strategy for the organization. Don’t forget to include ways that learning, performance measurement and analysis can all drive business outcomes.
When the CHRO paints his or her vision to the CFO with broad strokes, it’s good to remember that the two of you share common ground: you both possess a deep perspective of the business as a whole and you both understand the relationship between strategy, market forces and resourcing as it relates to meeting company objectives.
2. Show How Technology Reduces Expenses
Now, it’s time to get down to cost savings. Demonstrate to the CFO how new HR tech such as a modern LMS will allow Finance to quickly and effectively administer and track required compliance training resulting from strategic acquisitions and regulatory changes. Make sure you speak the CFO’s language: When you show that you understand the importance of the dual aspects of conformance and performance, you help your case. Other cost savings include decreased travel expenses as more learning moves online.
3. Demonstrate You Understand the Business Inside and Out
For CHROs who want to be a strong business partner to the CFO, having a firm
grasp on the external and internal business environment is a must. This means understanding the complexities and challenges faced by various business functions, as well as by the organization as a whole. By working together as “co-evangelists,” the two leaders can rally employees to engage with the company’s strategic vision, mission and goals.
4. Deliver Actionable Business Insights
Ready to get the CFO’s attention? Show up with data and the stories behind the data. What problems can the new HR tech solve? Rely on established statistics such as these, from Bersin by Deloitte, that illustrate how organizations with mature talent management programs enjoy key advantages including:
- Twice the revenue per employee
- 40 percent lower employee turnover rate
- 38 percent higher levels of employee engagement than those without mature talent management programs
Include prescriptive recommendations for talent initiatives that can improve efficiency, reduce costs and drive better business performance. By providing actionable business intelligence that helps drive improved decision-making and, ultimately, greater business impact, the CHRO will gain the CFO’s attention.
5. Link Talent Management to the Bottom Line
CHROs should also show how HR’s functions improve the performance of the entire organization including recruiting, training and succession planning. Draw a straight line between talent investment and business outcomes by producing metrics for each of your talent programs.
With these five tips, CHROs can successfully pitch talent management investment to CFOs. This is not a one-sided conversation. The entire organization stands to benefit by embracing integrated HR strategy.
Good luck as you strive to foster a more collaborative working relationship between HR and Finance to drive better business performance.
Pete Low is Chief Financial Officer for Saba Software.