Business partners: HR and finance are learning to team up effectively to develop strategy and resolve operational problems

HR Magazine, Sept, 2003 by Steve Bates

Finance is recognizing that "it's not just the warm and fuzzies you've got to consider. A bad termination can outweigh your budget savings," says Stephen J. Brewer, SPHR, chief operations officer of Physicians Immediate Care in Rockford, Ill. "Finance is saying: OK, you have some valid points to make."

'More Than Worth the Risk'

David Hutchins, SPHR, CEBS, CCP, chair of the Society for Human Resource Management Board of Directors, says HR professionals must be willing to make leaps of faith and concessions to finance if necessary to develop collaboration. "In my experience it has been more than worth the risk," he states. "It's important for HR professionals to seize the idea that sound organizational financial success and creating an efficient workplace environment for people's success are mutually beneficial."

"It kind of reminds me of a marriage, a collaborative type of relationship in which each can exert skills and responsibilities" says David Jackson, senior vice president and CFO of Road & Rail, a Louisville, Ky.-based provider of logistical services to the transportation industry. "It's been a long time coming. I think the trend will continue" he says. "I think the lines will be blurred."

This collaboration "prevents the HR function from becoming a silo," observes Michelle Burns, CFO of Atlanta-based Delta Air Lines, where finance and HR work together closely on a regular basis. (See "Delta: 'Marriage of Finance and HR,'" above.) Laura Butcher, managing director of HR, reports to a Delta HR executive, but she is also linked to Burns's office by a dotted line on the organization chart, making her an unofficial but essential HR consultant to Burns and her finance team.

The two disciplines can benefit from understanding and breaking their traditional mindsets about managing the workforce, say some HR and finance leaders.

"It starts with a 'Help me understand what's driving your decision so we can reach common ground," says Sarah Meyerrose, who heads the HR operation at Memphis-based First Tennessee National Corp., a bank holding company and financial services firm.

"So often you sort of impute what the other person's motives are. For HR the key is not seeing HR issues as the soft, squishy sort of thing" says Meyerrose. "For finance, it's not seeing human capital as a capital asset like the lamp that's sitting on my desk."

Efforts to get HR and finance together can start small, such as by an HR leader taking the CFO to lunch or swapping jobs for a day or two with a finance staff member. It helps when HR does some homework first, say professionals in both disciplines.

That means understanding the language and principles of finance. "Learn the decision criteria of CFOs" as well, suggests John Sullivan, an HR consultant, speaker and professor at San Francisco State University. HR people should keep in mind that "we're going to be much better" with finance's help, he says. "When the world becomes data-driven, we can't be the last ones" to master data-intensive work.