80% of financial and human resources directors are of the opinion that they have been cooperating much better in the last three years. This closer collaboration mainly involves changes in corporate strategies, including planning of new products, changes in business models and strategic human resource planning. HR departments have achieved a greater prominence in the hierarchy of companies,as evidenced by the fact that high-performing organizations invest 50% more in the relationship between HR and finance than those performing with less strength.
These are the conclusions of a global study by Ernst & Young entitled Partnering for Performance which involved 550 Chief Financial Officers (CFO) and Chief HR Officers (CHRO) of primarily large companies from 30 countries. According to the results of the study, the relationship between HR and finance in high-performing organizations differs mainly in the following factors:
1. More mature organizational structure and operational model
CFOs and CHROs in high-performance organizations spend 50% more time collaborating. Usually they are on the same level of management. It is crucial for them to implement a model of shared services. High-performing companies achieve a higher level of integration of HR and finance at the level of processes, teams, technologies and systems.
2. Greater involvement between financial and HR directors in strategic planning and decision-making
Finance and HR in high-performance organizations do not only respond to the strategies being created, but are directly involved in the formation process. They have a more progressive approach to identifying opportunities and solutions for the best possible use of people and capital.
3. Wider use of analytical tools
High-performing organizations more often use analytical tools to better understand their employees. HR is much more likely to apply decisions based on this collected data.
4. Increased measurement of HR
Measuring key HR indicators is a constantly ongoing process in high-performance organizations. They focus on broader metrics of their organizational health, not just finance.
The entire study is available for download from the Ernst & Young website here.
-kk-