Over the last decade, controllers and chief financial officers have been embracing their new roles as strategic assets. While maintaining the financial health of the organization remains a top priority for controllers and CFOs, the way in which they fulfill this duty is evolving. Today, financial leaders collaborate with other executives to inform decision-making and promote overall organizational efficiency.
One of the most exciting collaborations involves partnerships between controllers/CFOs and chief human resources officers (CHROs). Financial leaders empower CHROs to create a dynamic workforce by ensuring that their talent management strategies are financially sustainable.
What Is Workforce Profitability?
Workforce profitability is an organization’s ability to optimize labor costs while maintaining productivity and employee satisfaction. Achieving this balance requires collaboration between finance and HR. Some of the challenges associated with workforce profitability include the following:
- Economic uncertainties and inflation
- Rising labor costs
- Changing employee expectations
Businesses must be agile as they work to adapt to the expectations of younger generations of workers. However, implementing meaningful changes to hiring, onboarding, pay, and benefits offerings requires the input of financial leaders. By working closely with your CHRO, you can align financial planning processes with human capital management.
Key Areas Where Controllers and CHROs Should Be Collaborating
The benefits of partnerships between controllers and CHROs are undeniable. The question is, what areas should CFOs and controllers focus on when teaming up with human resources leaders? Some critical areas to discuss include the following:
Optimizing Payroll and Compensation
Payroll is one of the largest expenses for your organization. Controllers should work with CHROs to develop compensation models that are competitive but not overly ambitious. It can be tempting for recruiting professionals to throw money at talent problems until they see an influx of applicants. However, they may not realize how those decisions impact the company’s short and long-term financial health.
CFOs should help balance the need to offer competitive pay with other financial needs. They can achieve this by conducting compensation benchmarking and exploring different pay models. Workforce analytics is a valuable tool as well. Through workforce analytics, decision-makers can assess the cost-effectiveness of salary adjustments.
Improving Benefits Offerings
Today’s employees want competitive benefits, not just great pay. Health insurance remains a top priority for the majority of employees. However, they are also interested in other perks that can promote a positive work-life balance and overall wellness. Controllers can help HR meet the changing expectations of employees by:
- Evaluating healthcare costs and exploring cost-sharing models
- Adjusting retirement plans to balance employer contributions and employee participation
- Assessing leave policies
- Identifying economic wellness and perk programs
Retooling a company’s benefits offerings can promote recruitment and retention. However, it’s important to focus on offerings that are economical and valuable to employees.
Planning Workforce and Managing Costs
Workforce planning is a joint function and should be treated as such. Controllers and CHROs should collaborate to:
- Forecast staff needs to avoid over-hiring or under-hiring
- Develop flexible workforce models
- Use automation to optimize workforce allocation
- Identify opportunities to cross-train employees to boost productivity without increasing headcount
The goal is to support the company’s short- and long-term workforce needs without excessively increasing headcount. Empowering employees to be more productive by equipping them with automation tools will help balance HR and finance goals.
Aligning HR Performance Metrics With Financial Outcomes
Human resources and finance teams speak different languages. Aligning both departments means identifying and tracking HR performance metrics that are relevant to financial outcomes. Controllers should collaborate with CHROs to establish metrics that link workforce productivity to revenue.
Additionally, analyzing turnover rates and their impact on hiring and training costs can help bridge the gap between HR and finance. The goal is to find common ground with CHROs so you can inform decision-making and optimize the ROI of workforce-related investments.
Using Technology to Promote Efficiency
Technology plays a key role in improving workforce efficiency while keeping costs down. Integrating HR and financial systems eliminates data silos and promotes unified workforce planning processes. Explore your current technology suite and identify opportunities to automate processes, analyze data, and unlock real-time insights.
The Benefits of a Finance-HR Partnership
Teaming up with your organization’s CHRO will lead to:
- Improved cost control
- Stronger employee retention
- Enhanced decision-making
- Greater operational efficiency
When CHROs and CFOs work together, the organization regains a competitive edge in today’s talent-scarce environment.
Ready to Collaborate With Your CHRO?
Proactively creating a collaborative relationship with your organization’s CHRO will empower the business to build a more profitable and talented workforce.
Ready to bridge the gap between HR and finance? Reach out to your chief human resources officer and schedule a meeting to discuss how the finance department can more effectively support the workforce planning and talent management needs of the business. Together, your teams can drive workforce profitability and productivity.
