Integration of Human Resource and Financial Management – A key to Success of the Company

“You save tremendous amount of time, energy and money when you tap into the human resources of a business at every level.”  – Stephen Covey

Human Resources and Financial Management are viewed as drastically different from each other since time immemorial. HR Department with its motto, “People are the greatest asset” has always come in conflict with the Finance Department with their norm of “Cash is King”. But in reality, these two departments are “Tom and Jerry” of the company. They can’t live with each other and can’t live without each other. They both want the same thing in the end that is a successful and healthy company.

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In reality, a strong relationship between Finance and HR Department is the key to Business Success. Many Business Schools have begun to inculcate these changing norms in their Post Graduate Diploma Courses in India. A sense of cooperation and respect for each other’s work is taught to both the disciplines. This could go a long way in creating capable and talented managers.

HR Departments need Finance department to access their programs’ return on investment and Finance Department need HR Department in achieving higher corporate earnings. A healthy and cooperative relationship between these two leads to positive business outcomes. A strong relationship between the two leads to improvement in employee productivity and engagement, and higher corporate earnings.

Both the departments have good and bad in them. The dream of a happy and successful company can be achieved  if Finance learn the goods of HR and vice versa.

Things Finance can learn from HR

Finance people are not very popular in  the company due to their tough decisions that often poses a negative impact on the morale of an employee. Finance can learn two most important things from HR:

  1. Not everything can be measured in terms of profit and loss. It can be difficult to quantify a program or benefit designed for boosting employee morale in terms of money.
  2. The company is run by humans and not machines. Finance managers are tasked with making difficult decisions in order to ensure the constant growth of the company. If HR managers are included in long term strategic plans, the possibility of their success would increase manifold.

Things HR can learn from Finance

HR departments are dealing with the human aspect of the organisation. They deal with the biggest cost element of the company, the employees. HR can learn two things from Finance:

  1. HR need to quantify personnel investment. After all enhanced productivity or sales or brand value are the ultimate goals.
  2. HR Managers should learn how to make use of People Data in influencing decisions relating to business goals and performance metrics.

A Partnership for A Happy and Successful Company

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Successful collaboration and cooperation between CFOs and CHROs can be achieved when members of both departments put time and effort to understand and learn from each other. Together, solid finance and HR teams can develop strong and lasting partnerships that can help achieve a faster and efficient growth.

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