People Business » Uniting the finance-HR divide

Uniting the finance-HR divide

Finance and HR have more in common than you might think. They’re both key to the success of any business so it’s crucial that they collaborate effectively, says Rupert Morrison, CEO of technology group OrgVue Concentra Analytics.

Finance and HR are different animals, right?


Whilst they might have different methods, they often have common goals, especially when it comes to people.

Both departments want the right people in the right places doing the right things. So why the perceived dichotomy?

Because finance has traditionally been focussed on growth, M&A, investments and cost control, and HR on making sure people are in the right roles, are energised and well managed.

But, given the biggest cost of any business is the people and the success of an organisation is dependent on those people performing well, better collaboration is both a financial and employee engagement goldmine.

Sadly, it’s not a simple case of asking finance to play nice with HR. There are multiple barriers to closer collaboration and effective communication.

People versus pounds

First of all, there’s a huge psychological gap between HR and finance. It’s a complex issue, but it comes down to what each department is thinking about when they get out of bed in the morning.

HR is more focussed on skills and finance is obsessed with costs. And HR professionals tend to be less analytical and less confident when it comes to handling data, especially in large businesses where organisation charts can be sprawling and dynamic.

Divergent processes 

The second issue is that the departments are using different methods to capture people data, making organisational planning and analysis (OP&A) almost impossible.

Our research, conducted with senior finance and HR decision makers in the UK and US, shows that fewer than a third (28%) of HR and finance decision makers have joined-up reporting systems and processes.

This siloed approach leads to different views around the validity of data, resulting in inefficiency and lack of proactive action by both finance and HR.

Pulling information from two different systems shouldn’t be hard. However, when time is tight and you’ve got to report on your gender pay gap or there’s a merger to be managed the default position is to panic, not strategically plan the future.

The responsibility gap   

Finally, our research showed that OP&A is seen as HR’s responsibility, except when it comes to cost management. 68% of those we asked said that HR should determine future workforce needs. But 71% see managing overall people costs as a ‘finance’ responsibility.

How can HR determine what their organisation’s needs are until they have input from finance? And how can finance lead on cost management when they don’t know how much they’re spending on people and tasks?

To tackle these challenges, and to produce accurate financial projections and objectives, finance needs to understand how much it costs to perform the work. It’s then down to HR to use this information to decide who does it.

Forging stronger links

The finance-HR communication chasm needs to be bridged. The good news is that there are ways to overcome the causes of this lack of collaboration.

Firstly, the planning and analysis (FP&A) function in finance should work closely with HR. To make this truly effective and to forge the strong links needed, HR should also create an equivalent organisational planning and analysis (OP&A) function.

The second step is to integrate finance and HR data. A purpose-built platform for the analysis and modelling of data from any source can act as the foundation for finance and HR collaboration. This will give both functions a single view of the business that connects cost and profit.

With these capabilities in place, finance and HR can have a meaningful, data-driven, dialogue about changes that need to be made to meet objectives, as well as planning for different scenarios in the future.

United we stand 

In the current business climate, both finance and HR need to work to each other’s core strengths to plan and manage the future workforce – and the organisation as a whole – more effectively. Both functions are working towards the same goal of a successful and well-run business. This goal can be reached much more easily if they are both on the same page.

With the same information and bi-directional communication, the HR-finance relationship can bring huge value to the business. Not only will organisations benefit from better quality information, but they stand to reap significant financial rewards. All it takes is for one side to take the first step.



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