By Sushant Jain
Traditionally, CHROs charged with human resource management, while CFOs focused on financial stewardship.
In recent times, the dynamics have shifted appreciably. Gone are the days when these two functions worked in silos. Today, both roles can be strategic partners who work together to drive a company’s success. Enlightened organizations have moved toward fostering collaboration between them so that the business can operate competitively and grow.
There is potential for synergy between HR and finance because talent is often the largest driver of performance and the largest cost base for organizations. CFOs and CHROs control the two most important resource streams in most organizations—money and people, as well as how these resources interact. If they can work together strategically, it can make a real impact on business.
According to the SAP Concur CFO Insights Survey, 57% of global finance leaders say they are investing heavily in growth this year—and an integral part of this journey is to align with HR and other leaders across their organizations to enhance business growth.
Here are three ways that CHROs and CFOs can cooperate to unlock growth and improve employee experience as businesses continue to navigate a volatile economic climate:
1. Partnering to strengthen company culture
In the wake of the global skills shortage and “the great resignation” from 2021 to 2023, CFOs are increasingly recognizing HR as a strategic business function—55% view their relationship with CHROs as strategic and important, while CHROs continue to work on providing fair pay, company benefits, and a robust workplace culture. This has shifted the dynamics between CHROs and CFOs, as CFOs feel a renewed duty to align financial resources with HR strategies.
For example, the leaders can work together to ensure learning and development resources are available and effectively allocated across the organization. By increasing provisions such as mentorship schemes, training programs, and tuition reimbursement, businesses can help build a culture of continuous learning. CFO and CHRO collaboration can deliver a workplace environment where employees feel supported working towards their professional development as well as the ambitions of the business.
2. CFOs Can Help Steer Diversity Initiatives
To attract and retain the best talent, businesses need structures in place to support diversity, equity, and inclusion (DE&I). Employees should feel supported and respected in the workplace, which starts with policies to promote fair practices like equal pay.
According to the same SAP Concur survey, 56% of global finance leaders say they can help CHROs with diversity initiatives, and a further 54% say they can help combat the gender pay gap. But ambitious, company-wide directives—like those to eliminate historic pay imbalances—can be costly. As a result, HR challenges transform into finance challenges, necessitating increased collaboration between the two departments to identify disparities, allocate resources, and implement equitable compensation policies.
Over time, addressing diversity challenges can help cultivate a strong company culture and improve business outcomes.
3. CHROs and CFOs can jointly optimize resource allocations
CFOs and CHROs should jointly lead the business planning process by engaging the business, estimating resource risks, and uncovering roadblocks. By integrating operational and workforce planning, they can create a connected, transparent process for resource allocation.
This is particularly important in challenging business environments, where agility is an asset. Working in this way, CHROs and CFOs can develop agile responses to market shifts, which include the quick adjustment of workforce plans or reallocation of financial resources.
Innovation is also much needed during challenging times. If they are able to establish rapport with CFOs, CHROs are also much more likely to be able to get funding for innovative HR programs they want to push through, even if they are untested.
The bottom line is that together, CHROs and CFOs are strongly placed to shape the future of an organization. By leveraging their unique perspectives and skills, both leaders can optimize business outcomes, control costs, and enhance human capital, ultimately making the company more competitive.
Clearly when it comes to the HR and finance departments, synergy is victory.
Sushant Jain is Chief Revenue Officer, Asia Pacific & Japan, Spend Management, SAP
