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

Some experts suggest that the two disciplines might merge at some point, creating a strange new hybrid. "In most large companies, the heads of HR have MBAs," notes Brian Hackett, a director at The Hackett Group, an Atlanta-based consulting firm. "An argument can be made that the HR profession is kind of coming into the finance profession."

Productive interaction among finance and HR people can be aided by management buy-in to the concept and a culture that facilitates rotation programs in which finance professionals spend time in HR and HR people move into the business. (See "Putting HR in Rotation" in the March issue of HR Magazine.)

At Midland, Mich.-based Dow Chemical, blurring the lines among the functions through such techniques "is clearly ingrained in our culture," says Nancy Tootle, global design leader in the HR Workforce Planning Strategic Center. "We work in a very collaborative team environment" that is fostering development of sophisticated metric tools designed not just to manage human capital but also to quantify the return on the investment in people.

Teaming Up for Results

Quantifying return on human capital investment is almost an obsession at First Tennessee. The firm hired Meyerrose, whose background was in finance, to head its HR function in 1998 and tasked her with getting HR in sync with business strategy.

Under Meyerrose, the company launched surveys and studies seeking to establish the links among high-performing employees, customer loyalty and retention, and profitability. It also sought to find ways to stem the departures of some of its most important workers. (See "First Tennessee: 'Talking to the People,'" right.)

HR and finance have collaborated on other projects as well, such as development of a staffing model for the company's sales forces. First Tennessee analyzed its traffic patterns and transaction volume to determine how many full- and part-time staff are needed. When one office loses an employee, the model allows management to determine if another office has more than its ideal number of workers and to redeploy an employee rather than go through a lengthy hiring process.

Examples of HR and finance teaming up to solve day-to-day problems are not limited to the for-profit world. Much like a business would go about determining how it needs to manage its people to satisfy its customers, the U.S. General Accounting Office (GAO) has conducted a series of employee surveys to identify "our critical success factors," says Sallyanne Harper, the agency's CFO, who carries the title chief mission Support officer.

The agency, the investigative arm of Congress, recently discovered that its workers did not have a high level of confidence in GAO's performance management system and that a substantial number of employees believed that they were not consulted before management decided on various courses of action. As a result, GAO launched an overhaul of performance management, which Harper says "created a buzz" among agency employees, and it changed procedures "to increase the ability of people to get involved in decision-making."