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

"The finance team recently assigned one of their up-and-coming people here," adds Petrie. "I'm pretty excited about that."

HR professionals shouldn't spend much time and energy concerned about organization charts and the relative prestige of HR and finance, suggest some experts--nor should they worry that finance will swallow up HR. If all parties keep sight of the overall goal--aligning people and skills with the competitive needs of the business, more often than not everyone will benefit.

"If HR can show up at the table with their set of metrics like the finance people, showing trends and results and outcomes, they're obviously in a better position" to affect policy and raise the profile of the profession, says Hackett.

HR is sailing into "the perfect storm" of change and opportunity, Hackett says. "Human capital costs are through the roof. Pension costs are through the roof. Plus governance and executive compensation issues. This is a real opportunity for HR to be equal partners getting through these high-profile issues. There's no better time to show your stuff."

How much effect CFOs believe human
capital has on each of the following
business outcomes.

Customer satisfaction                 92%

Profitability                         82%

Innovation/Product development        72%

Success in integrating acquisitions   71%

Revenue per employee                  68%

Speed to market                       66%

Growth                                64%

Source: CFO Research Services

Note: Table made from bar graph.

Delta: 'Marriage of Finance and HR

Nothing fosters cooperation as much as crisis, and crisis has been a constant in the airline industry since the September 2001 terror attacks. At Delta Air Lines, Michelle Burns and Laura Butcher have had plenty to talk about.

Butcher, managing director of HR, has "a strong dotted line to me" on the organizational chart, says Burns, executive vice president and CFO. Though Butcher reports formally to an HR executive, she also serves as a consultant to the finance operation. In the past two years, that relationship has been a particularly important one.

For starters, the airline has downsized by more than 16,000 employees. Working together, HR and finance developed an initiative by which workers were offered incentives to leave the company voluntarily and avoid a possible pink slip. Butcher says that about 85 percent of employees facing a layoff--and more than 95 percent of nonunion workers in that category--took those buyouts.

Another project focused on employee benefits. Delta determined that it had particularly high benefit costs but that some of the most expensive benefits were not valued highly by those receiving them. The resulting changes cut costs for health care, pensions and many other elements of the benefits program without much employee pushback, the officials say.

In addition, the two worked together on an initiative designed to make the workforce more flexible and thereby save money. "It's the marriage of finance and HR," states Burns. "HR comes in with the tools, and finance comes in with the analysis."