Bridging the Gap Between HR and Finance in Organizations

I was watching “The Pool Guy” episode of Seinfeld the other day, the one where George gets upset when his friends start hanging out with his fiancée, Susan, colliding his “Independent George” and “Relationship George” personas or “worlds.” It is a very funny episode and it got me thinking about the struggles between different groups of people within an organization that I often meet with as a consultant.

For example, two key players, Finance and HR, sometimes struggle to be on the same page. Like George, they want their roles to be apart, and struggle with trust, empowerment, and even to work for the greater good when these worlds collide. As a consultant, I often witness the tension from all leaders on both sides of the aisle.  It’s like congress sometimes. J

However, HR and Finance have one thing in common, they are the keepers of the house, and as a result, it is essential to work in conjunction.

I recently interviewed my contacts (HR and Finance) and asked them what they expect from the other side, or what makes a strong internal partner. One caveat: the size of the organization matters because, in some cases, HR does not have a direct line to Finance. This might not be true for all organizations, but I have seen structures where HR is a dotted line to the CEO or the Board, for example.

From the Finance point of view, here are 5 tips for HR colleagues to help avoid collision:

1. Be entrepreneurial in spirit: Understand the finance and metrics the company runs on. Treat the HR spend like it is your own money.
2. Be data driven: Know the numbers, and when asking for budgets, be able to defend your rationale with facts and data that support your position.
3. Identify and develop talent & protect our colleagues.
4. Be confident: Not afraid to challenge traditional thought or areas you believe can make a difference. It’s important to talk and see each other’s views.
5. Know the competition: HR is an extension to the marketplace and should have a strong pulse regarding the competitive edge as it relates to people, comp, benefits, culture, etc.

From the HR folks (and I know you are out there) – below are the top 5 tendencies for Finance to consider before the worlds collide:

1. Collaboration: Not a dictatorial dialogue, but collaboration on areas like the annual operating plan, budgeted headcount, merit and bonus, payroll and tax, and compliance/training. This one was on every list of folks I interviewed (on both sides).
2. Open to a wider perspective: Recently, HR has had to help Finance navigate the stormy waters over the past couple of years. Openly talk about understanding each point of view. Invite one another to speak to their teams to assist with the partnership across functions.
3. Transparency: The good, bad, and the ugly. HR is the face of the people and having a truly transparent relationship unites the organization and together, can tackle any issue.
4. Solid budgets: Cannot be created without the input of HR. A good example would be using assumptions like all entry level people will have single only coverage. Without talking to HR and knowing the PEPY costs, budgets can blow up quickly if faulty assumptions are made.
5. Appreciate compliance: Sometimes HR is looked at as another level of scrutiny, or hurdle to jump over for progress to be made. Our understanding of legislation coming down the pike can help keep budgets on track, keep the company responsible, and keep the company operating in good standing.

So here you have it – a quick and easy guide to being a great corporate team player on both sides. Call to action: What am I missing here? Please send me your comments and if you like the blog – share it to your network.