3 Things About HR that Every Financial Executive Needs to Know
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By Susan Gartner
At most larger companies, it’s a safe assumption that corporate leadership tends to understand the basic tenets of human capital management – how to recruit top talent, how to keep people engaged and motivated and how to take care of business where payroll, benefits and wellness are concerned. But all of that, while vitally important in its own right, is just the tip of the iceberg. Past the HR basics, employers need to explore the outer reaches of the C-suite and look at how their human capital affects other aspects of their business.
For example, let’s talk about finance. HR and finance have an obvious connection to one another – you can’t have employees under your roof unless you shell out the cash to pay them, and many companies live with a degree of uncertainty about how exactly that bulky payroll is going to affect their bottom line. There need to be clear and open lines of communication between a company’s HR offices and its financial executives so that the entire business has a strong understanding of the interplay between its two most important assets – people and money.
A 2014 study released by the Canadian Financial Executives Research Foundation (CFERF), the research arm of FEI Canada, and sponsored by Ceridian found that 61% of financial executives reported that they had taken on more accountability for such functions, including payroll, recruitment, talent management, training, benefits and bonus management, in the past five years. In addition, more than a third expect to see their involvement in HR and payroll expand in the next five years.
A relatively large proportion of those surveyed described their knowledge of HR functions as moderate or average: three in four ranked their own skills in this field as 2 or 3 on a scale of 1 to 5, while only 11% described themselves as extremely knowledgeable.
Traditionally, finance and human resources executives operated in separate spheres within most corporations. But rapid globalization has caused a growing number of companies to focus much more intensively on labour costs and human capital, as well as their role in delivering value to shareholders.
This was the topic of a recent Ceridian webcast. During this webcast, Ceridian discussed the different kinds of awareness that financial executives need to have in order to better tackle the human capital challenges in front of them.
Ceridian drew upon research conducted in partnership with the Canadian Financial Executives Research Foundation. This study found that many organizations are still relying on broad, “bottom line-based” metrics to gauge the return generated by their payroll expenditures. A better way of measuring and benchmarking workforce performance is vital.
Specifically, here are three challenges that financial executives need to consider:
Breaking down silos
One of the fundamental issues here is that many companies have silos set up that divide HR and finance. Each department operates effectively in its own right, but there is little room for communication or collaboration between the two. It’s important to change this dynamic, as there’s an important connection between talent and funding.
The specifics behind the metrics
People in HR are already familiar with the concept of metrics. How many people are working for them? How effective are they? How long do they stick around? These are all quantifiable problems that HR leaders tackle daily. It stands to reason that they can also tackle payroll metrics – they just need a helping hand to get started.
Identifying and integrating analytics
For HR and finance personnel alike, the challenge that lies ahead is clear – they need to identify and integrate workforce management metrics that examine both talent and dollars and cents. This way, both departments can work together to tackle the real business problems they’re facing.
Susan Gartner is a Senior Product Manager and Business Analyst at Ceridian.
Ceridian Canada is part of the Ceridian group of companies. Ceridian is a leader in human capital management with more than 100,000 clients across the globe. Ceridian delivers trusted results and transformative technology. Our offering includes the award winning, cloud-based Dayforce HCM, LifeWorks, PowerPay and International Payroll. Ceridian is transforming the world of work. For more information about Ceridian solutions, visit www.ceridian.ca or call 1-877-237-4342.