A company relies on its team to generate money for its well-being. And for that, a collaboration between HR and finance is necessary to ensure that the operation works smoothly so that the company can take care of its greatest asset: the people.
Unfortunately, it’s not rare to see a disconnect between human resources and the finance department that causes turbulence in the company’s workforce plan.
How important is it to build a better team between HR and Finance in a company? What can organizations do to ensure collaboration between the two departments?
Why Strategic Collaboration Between HR and Finance is Essential for Your Company?
A strategic collaboration between HR and Finance shouldn’t be complicated as long as the two departments can find common ground: the company’s stability. However, it doesn’t always go well in practice as HR and Finance departments have separate goals with different data to proceed.
While the human resource department focuses more on recruiting and onboarding high-quality people to run the company’s operations, the finance department sometimes has to make a tough decision regarding the financial asset that might tackle HR’s vision of building an A-team for the company.
The irony is that despite their differences, HR and finance have a similar goal within the company: to maintain its asset. While one is responsible for its human capital, the other is in charge of the financial assets.
When HR and finance can collaborate strategically for the company’s well-being, the company can achieve many things together. These include:
- The company’s business performance. Based on the EY’s “Partnering for Performance – Part 2: the CFO and HR” studies, 50% of high-performing companies spend more time building collaboration between HR and finance to achieve integration between departments.
- Employee turnover risk evaluation between HR and finance will help them forecast the potential impact on the company’s revenue and expenses.
- Strengthening teamwork When these departments opt to collaborate instead of looking at themselves as competition, that can ultimately lead to better results.
Thus, companies can achieve an alliance between the two departments through clear communication and strategic collaboration.
How to Build Better Collaboration Between HR and Finance?
Communication is essential to build better collaboration between HR and finance and achieve better organizational results. Therefore, gaining a mutual understanding is the common goal.
1. Plan together to gain a mutual understanding between HR and finance
Creating a streamlined ecosystem between HR and Finance is essential to enable them to work on their workforce planning together. It will deepen a mutual understanding of what each department needs to succeed so that they can support each other in the process.
By using free survey software to analyze the best way to collaborate across departments, companies can also gain some insights from the team members to understand their pain points and find appropriate solutions.
After all, the finance department will allocate funds to balance the company’s revenue and all the costs, including employees. The HR department needs to be aware of the budget and ensure that the recruitment and onboarding don’t exceed it.
2. Keep the data accessible to encourage open communication between HR and Finance
Hiring employees is an investment and an expense for the company, so HR and finance should work closely together so that they can better understand how recruitment works respectively and simultaneously.
Access to the right data in both HR and finance can help them understand the process and be aware of the necessary details to streamline the collaboration between the two departments.
The finance department can use a platform like InvoiceBerry to generate reports that showcase the company’s revenue and budget for the next cycle to the company’s HR professionals.
Meanwhile, the HR department can also streamline the system by choosing the best vendor that makes it possible to work with the rest of the team through Shortlister.
Giving access to the necessary data across departments can encourage transparency within the team that allows them to have open communication in the company. With the right data shared between HR and finance, both departments can gain insights on how to use it to work strategically as a team to drive better results for the company.
3. Always hold each other accountable
Accountability is another essential thing for a company’s success. It is a foundation to drive the best results and achieve the goals as a team.
However, understanding each other’s roles in the company won’t drive the desired result if one of the pillars can’t fulfill their responsibility. Accountability is often seen as a part of strong workplace ethics, and most companies are likely to succeed and achieve their goals when implementing it correctly.
By sharing information and keeping the data accessible by team members, you will find it easier to hold each other accountable.
Case Studies: How HR and Finance Collaboration Make Them a Better Team
According to the aforementioned “Partnering for Performance” study conducted by EY, the business outcome relies on solid collaboration between HR and finance leaders.
The issue is that despite both HR and finance, respectively, seeing themselves as responsible for their strategic workforce planning, there is a gap in the idea of collaboration between both departments in the organization.
While sharing data between departments can be challenging, it is crucial for accelerating digital businesses.
A streamlined collaboration between HR and finance can build a better team within an organization. Still, it’s important to highlight that they can only achieve it with transparency and excellent communication in the company.
Providing a platform where HR and finance can work together is essential for the company’s success, so they can gain mutual understanding and support each other to reach the goal as a team.
When HR and finance departments find effective ways to collaborate, it can increase the company’s profitability, which can be a huge win for all involved parties.
Human resources and finance departments need each other in the company, as the revenue of one’s company often relies on its human capital. When both departments can find common ground and mutual strategies to maintain the company’s well-being, they can meet their business goals accordingly.