HR & Finance have traditionally been treated differently within an organisational context. The typical consensus is this: Finance deals with the money and costs, while HR deals with the people aspect of things (to put it in very simple terms).
In today’s working environment, this belief is outdated, and there’s a growing number of reasons as to why it is beneficial for HR and Finance departments work closer together within an Organisation. Let’s look at some of these reasons, posted on an article by gethppy:
HR Managers & Chief Financial Officers often tend to perform similar duties. For example, HR managers have to take into consideration the costs and benefits of recruiting new employees, as well as consider the impact of their HR policies on the profitability of the organisation. These would require financial projections. On the other hand, CFO’s have to determine ways in which they can improve profitability through human capital. Methods of improving employee productivity and morale, such as bonuses & pay rises are estimated by these managers.
Tension on Business Productivity
It’s important that the HR & Financial team engage in open communication, particularly as both departments’ responsibilities overlap. Strong communication will mean that this overlap of objectives are more likely to be reached. Tensions between the two departments can cause a hindrance in any crossover of responsibilities, and thus affects business performance.
The changing business context
In order to stay ahead of the game and keep up with rising competition and new advances in technology, businesses need to accept that roles & responsibilities for department heads, such as Finance and HR, are changing. So not only do these sectors have an overlap, but they’ll have to accept that their roles may overlap into other sectors within the business and learn how to act accordingly to this.
Now let’s look at a couple of reasons why they SHOULDN’T work as separate departments, according to Personnel Today:
One of the dangers of working separately is the departments will predominantly work within their own team and not integrate into the other areas of the business. This is not only bad for morale, but this could mean that vital information is not shared across the organisation.
AI vs Humans
With talks of AI replacing human workforce, there is growing uncertainty of job’s being at stake. With this, there is a growing need for HR & Finance to focus on people as an asset within the organisation. In addition, workforce engagement could be a KPI for both departments as because the financial impact of employees being disengaged affects the heart of the organisation.
So should HR & Finance join forces? Get in contact with us and let us know your thoughts!
Written by Mark Boateng, Marketing Associate at Veran Performance