The importance of teamwork between finance and HR
To most people, finance and human resources might not come across as having the closest of ties within an organisation. Yet according to one consulting expert, collaboration between the heads of these two critical functions is essential to overall business performance.
EY conducted a global survey of over 550 CFOs (chief financial officers) and CHROs (chief human resource officers), and suggested from its findings that there is a link between how closely these two leaders work together and their business results. Performance was measured in both of these areas – in terms of EBITDA (earnings before income tax, depreciation and amortisation) for finance, and employee engagement and productivity for human resources.
In EY’s survey, eight out of 10 CFOs and CHROs said their relationship has become “more collaborative” over the last three years.
For those who believed their relationship had enjoyed “significant” increases in collaboration, 41 per cent reported EBITDA growth in excess of 10 per cent in the last year. This was compared to just 14 per cent of other companies claiming this level of EBITDA growth.
In addition, 43 per cent of CFOs and CHROs with greater collaboration said they experienced increases in workforce productivity over the last year, in contrast to 10 per cent for other organisations.
EY thus acknowledged that “the gap between finance and HR [is] narrowing” – and pointed to the scarcity of talent and rising labour costs as reasons why these two types of leader need to collaborate more in the future.
“Companies need a better understanding of the relationship between cost and performance, especially as organisations in both mature and rapid-growth markets are struggling to identify, secure and develop top talent,” reads a statement from EY.
Amid rising costs, placing an emphasis on team development thus, remains a clear priority for any kind of organisation.