CEB’s survey of more than 100 midsized company executives clearly showed that executives in finance and HR – including CFOs and chief human resources officers (CHROs) – want to work more closely and take advantage of opportunities to help teach and learn from each other.
The same survey highlighted five areas where CFOs and CHROs agree on how they should work together, and four areas that CHROs and CFOs view differently and believe the other should strengthen their expertise.
Last week’s post looked at strategic planning, which is the first of the areas where both parties say they work well together. The second is the opportunity to create a cohesive, connected, and transparent process for resource allocation. This involves CFOs taking an interest in workforce planning and CHROs an interest in operational planning.
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Integrating Operational and Workforce Planning: CEB’s View
CFOs and CHROs must jointly lead the business planning process by engaging the business, estimating resource risks, and discovering critical roadblocks.
Workforce planning and operational planning cannot be done effectively when those in charge of the two elements don’t work together. CFOs must learn the basics of workforce planning just as CHROs must learn the basics of business operational planning.
Both heads must direct responsibility down to the business and assume the role of functional “coaches.” They must also work with the compensation committee to align senior leader compensation with long-term strategic objectives. Because it is almost impossible to align compensation perfectly to strategy, organizations should aim for “directional” alignment and plan to review this alignment regularly. Both CFO financial expertise and CHRO compensation and benefits expertise are necessary to this process.
This not only important but incredibly urgent. The CFO/CHRO survey showed a worrying misalignment of people, resources, and effort throughout most organizations. A CEB “mobilization audit” found that 79% of the organization doesn’t know how their current work affects corporate goals (see chart 1).
Chart 1: Degree of alignment with corporate goals Percentage of workforce; n=1,163 Source: CEB 2009 mobilization audit
“Making resource decisions without HR’s input can lead to strategic failure with costly effects to the business in terms of morale, productivity, and retention.”
CHRO, Education Industry
How CFOs and CHROs and their teams should teach their counterparts the value of HR- and finance-functional metrics, and then collaborate to align metrics against company objectives.
Read part 1 of the series, Bridging the CHRO/CFO Divide: 5 Steps to A More Powerful Partnership
Read part 2 of the series, Bridging the CHRO/CFO Divide: Engage in Strategic Planning Early
Read part 4 of the series, Bridging the CHRO/CFO Divide: Help the Business Use the Right Metrics
Read part 5 of the series, Bridging the CHRO/CFO Divide: Align Compensation and Benefits with Corporate Strategy
Read part 6 of the series, Bridging the CHRO/CFO Divide: Coordinate Your Approach to the Line
Read part 7 of the series, Bridging the CHRO/CFO Divide: Four Areas Where CFOs and CHROs Disagree