
HR, Be Scared of Finance. Be Really Scared
Do you ever feel proud of being an HR Professional? Well, I do! And whenever I catch myself in one of those proud moments, I think about our lofty mission to make all workplaces around the world a better place for employees where every individual is being recognized for their unique set of values, where relationships are built across disciplines regardless of any presumed power distance, and where companies are held accountable by their internal customers and carry the torch for social justice and equality through ethical business practices (I told you it was a lofty mission statement). We as HR Professionals know everything about ethical business practices. We even consider it one of our core competencies in SHRM’s Competency Model.
But we’re not alone. Despite some government pushback on the need to continue the Dodd Frank Act earlier this year, it is fair to say that there’s been an increase in ethical practices in the Finance world. And the picture our CFOs, Controllers, and Payroll Specialists have of human capital is beyond just an expenditure on the balance sheet.
Is HR Becoming Obsolete?
But isn’t that what we as HR pride ourselves on that we provide to an organization? Hasn’t that been our ticket to get a seat at the table? With Finance taking over the torch in terms of leveraging human capital and ensuring adherence to ethical practices, are we becoming obsolete? It is a tough question to ask, and it’s so much easier to remain in denial by ignoring these self-reflective questions, but I think we need to truly consider the possibility that the answer is;
“Yes, HR is becoming obsolete”.
Or at least in the way we’ve been working thus far.
Ever heard executive coach Marshall Goldsmith’s quote: “What got you here won’t get you there?” We’ve done some amazing things to shake off the dusty label of “personnel office” (and a shout out to everyone still on this journey. Rome wasn’t built in one day). But we can’t rest on our laurels. I saved an article from the Philadelphia Business Journal where they asked several outstanding CFOs in their piece on CFO of the Year for their input on what makes a good business leader, and these stood out for me:
“Be able to deal with lots of information and data and distill it down into information that can be utilized to operate the business.” — Stanley Applegate, Kimmel Center for Performing Arts
“Embrace shared governance and collaboration.” — Helen Bowman, Drexel University
“Ownership: Ability to take a problem and work until its conclusion.” — Stephen Clark, South Jersey Industries
“Intellectual curiosity and ownership.” — Michael Crist, Reinvestment Fund
Finance has learned our language. It is time we learn theirs and we start showing them the leadership characteristics that are important to them. And I am not just talking about HR Leaders at the highest level in the organization. The lofty mission I started off with can only truly be lived if all levels of HR are committed to it. And the partnership between HR and Finance can only deliver incredible returns if all members of both teams are working together. Here are some practical areas where I’ve seen great potential for bridging HR and Finance, beyond the boardroom.
1) Upgrade Your HRIS
I love a project. And I love to fix things. The possibilities of process efficiencies and the ability for data driven decision making are endless with the right HRIS. And I don’t mean that this goal can only be met with changing vendors. Not at all. Learning the current state of a system and understanding how you can leverage it better can be as rewarding. In my previous two positions I’ve played a big role in both changing HRIS vendors and in leveraging a current HRIS system and would not be half as successful as my team was if I wouldn’t have included the Finance department in these conversations. From the discovery meeting on, listening to Finance’s perspective on what works and what doesn’t work for them and what would help them do their jobs better can really foster a shared way of looking at a process. Plus, it provides you with an opportunity to explain the HR side of the business, which in turn increases the level of empathy when facing issues and fixing errors and slowly moves you away from the traditional blame game.
2) Improve Compliance
Yes, the ACA regulations might be going away soon. But for now they’re still here and the underlying data sets your ACA tracking provides (average hours worked beyond scheduled shifts) will remain an important indicator for financial success and employee engagement and wellbeing. And as Finance and HR collectively continue to push the envelope for ethical business practices, wouldn’t we want to continue to treat our employees fair and equitable rather than solely in accordance with the law?
When the new ACA regulations were announced, senior leadership asked if I would be willing to take over the leadership of the payroll department. I was hesitant at first. I believe I’m pretty good with numbers, however I thought that dealing with numbers would dilute the attention to human capital. Boy, was I wrong! As we focused on internal compliance audits it became very apparent that through these audits we could improve our customer service tremendously. One of the improvements we made was adjusting the language that was shown on employees’ pay stubs. After HR’s question to Payroll on what the different payroll codes meant, it became apparent that only those that had worked with the codes for a while fully understood them. Adjusting it to shared language that Payroll, HR Business Partners, and the Benefits Specialist used significantly increased the level of clarity for our employees and cut the time it took to solve a problem in half.
3) Data Driven Decision Making
If your executive team are the only people discussing your HR Dashboards, you’re doing something wrong. I am a firm believer that the more you talk about the issues you’re facing with the use of data throughout all levels of the organization, the clearer needs assessments become and the easier it becomes to course correct throughout the implementation phase. I could dedicate an entire article to the value of data driven decision making at the intersection of HR and Finance. But outside the number crunching there is an underestimated value of discussing the narrative behind the numbers. I enjoy the comedic value of Alexis Fink’s quote: “Most people use data the way drunks use the lamppost: for support rather than for illumination”, because there’s a lot of truth in it. But if these discussions are facilitated correctly it provides an opportunity to understand better where the other person is coming from. By dissecting an individual’s way of thinking and by focusing on the intended meaning of terminology used and not base it solely on your interpretation you can improve team work and foster belonging. One of the past efforts I’ve been a part of was reducing nursing overtime in a certain area of the company from 9% to below 2%. Needless to say there were a lot of elements contributing to this success, but the underlying driver was honest and frequent communication from all parties involved, including HR and Finance. We carried over this approach and noticed it was as successful in the planning stages of an effort. And without even noticing it I started to copy Finance’s language, even in every day conversations (I caught myself saying dorky things such as “did they even complete a break-even analysis?!?” during happy hour when discussing Philadelphia’s Parking Authorities’ ticket amnesty program).