Companies that are informed about how their finance and HR teams can work together in an explosive combination have better chances to grow in leaps and bounds over time than others who cannot fathom such an opportunity. The reason it is so is that the convergence of the HR and finance teams in companies helps in leveraging your CFO and make informed decisions about hiring and employee retention.
This further helps in improving a company’s profit margins as well as optimize their cash flow better. Managing the cash flow optimally is essential to the growth of a business. And one of the ways in which this can be done is by the effective convergence of the HR and finance departments. Plus, this intersection of the HR and finance departments not only helps a company manage its cash flow and grow over time, but also enhances the workplace culture as employees learn to work together and share their ideas efficaciously.
Areas Where the Departments Intersect:
There are a number of areas where the HR and the finance departments of a company intersect. Over the next few sections of the article, we shall look at these areas and learn how they intersect. And once we are done looking at these areas, we shall also see how this intersection can be made to work effectively.
One vital area where the finance and HR overlap is that of payroll. It is more like a symbiotic relationship because neither of these two departments can survive without each other. The HR department determines the salaries and other perks that are enjoyed by employees, and the finance department handles everything related to crediting the salaries and ensuring that the employees receive the perks on time. The finance team also identifies the areas and the reasons for pay gaps and intimates the HR department about it.
It analyses if the salaries of employees are up to the cost of living and also suggests pay adjustments based on the analysis. The CFOs then analyze these suggestions and recommendations and modify the salaries of the employees. The HR and finance teams also converge to analyze market trends together, go about budgeting processes and manage cash flow using a hoard of cash management services. We shall talk about these areas in more details so that you can understand what we are talking about better.
In Analyzing Trends
It is vital for companies to analyze the reigning trends of the market to function better within the competition. Analyzing the rising costs in the healthcare system, the kind of cash flow management software that most companies are using and other things as such are much-required to make sure that the company is making wise business decisions. These analyses can only take place in a holistic manner when the HR and the finance departments of the company work hand-in-hand. Plus, it also helps both the teams to make their own decisions that shall lead to the growth of the teams individually.
The HR and finance teams must also work hand-in-hand to make good budgeting decisions for the company. We all know how important budgets are for companies. An inability to come up with the right budget plan can ruin the prospects of a company. The HR and finance teams of companies can work together to identify the company’s values, goals, strategies and come up with a budget that shall suit the company’s needs.
Plus, when the HR department makes decisions and chalks out policies about employees like sick leaves, work-from-home options and other perks, it should always take the good advice and opinions of the finance department as well. This is because there are a lot of costs involved with these crucial decisions and shall affect the company’s cash flow.
How Can HR and Finance Work Together?
All things said, it might not be that easy to get these two departments to work together seamlessly. However, there are a few simple things that the teams can do to facilitate this relationship and work for the overall growth of the company.
- Teams can work with each other and help each other understand where they fit into the grand scheme of things. They can help each other identify the roles that they play in raising the revenue of the company.
- The teams must be given equal and fair access to the company’s CEO so that none of them feels left out in the process or less important than the other. Providing the teams with equal access will help them take their concerns and grievances to the CEO and have a fair share of opportunities.
- Both teams can engage with each other to take on the shared interests of the business, and this shall further prevent them from becoming siloed.
- Finally, both teams can be encouraged and motivated to learn about each other’s work and find commonalities so that they can help each other grow and thrive. This shall not only help the individual teams on their way to growth but also aid the company to make progress and reach out to its target audience in a better way.
Summing It Up:
It is vital that companies understand the ways in which HR and the finance department can work together so that they can leverage the benefits and work towards the growth of the company. The HR department must be educated about some of the tasks handled by the finance department and vice versa. This helps both the departments to understand each other better, sort out differences, if any and work towards a common goal. The finance department can be educated on how the HR department works. It can be enlightened on the hiring and training processes, employee retention, HR policies, benefits and perks offered to the employees and other tasks. Once both teams have an understanding of how each other works, there shall be ease in various operations, and the company shall be able to scale heights of success.