One of the keys to success in any organization is diversity. Diversity of thought, diversity of backgrounds, diversity of age, and diversity of gender can all contribute to generating ideas and strategies that will give you a competitive edge.
Having multiple departments, as most companies do, provides a natural diversity of skillset within an organization. Your IT leaders possess a different skillset than your sales team. Your marketing and public relations employees have talents that your accountants never will, and vice versa. Having all of these skilled people working for your company is ultimately what will lead you to success. However, there will also be occasions in which these skillsets clash.
The HR and finance leaders within your company possess important – but seemingly contradictory – skillsets that are both critical to the success of your organization.
In this article, we’ll discuss the following:
- What HR and Finance Have in Common
- Key Differences Between HR and Finance
- Bridging the Gap Between HR and Finance
Key Differences Between HR and Finance
Let’s start off by discussing some key differences between the two departments.
The first and most obvious difference is that HR is focused on human capital, while finance is focused on monetary capital. Your HR leaders are probably much more willing to pull out the check book to invest in employee training and development. Finance, on the other hand, might have a hard time quantifying the return on investment of such activities. Employee discipline or internal conflicts between coworkers are the things that keep HR leaders up at night, whereas finance is more likely to be troubled by cash flow issues. When it comes to big picture decisions, finance will be considering the bottom line, while HR will be thinking about employee morale.
Another key difference between the two departments is the language that they speak. The jargon and acronyms that either team uses will surely be hard to understand by the other. When finance talks about AIR, APR, and CDs, don’t expect HR employees to catch on to what they are saying right away. The same thing applies when HR folks are discussing COBRA, FMLA, FFCRA, and DOL. Business leaders should be prepared for this language difference when trying to bridge the gap between HR and finance. Don’t be afraid to slow the conversation down and translate when needed!
What HR and Finance Have in Common
Before we talk about how to bridge the gap between HR and finance, let’s acknowledge some things that the two departments have in common.
First of all, both departments care about the success of your company. HR leaders will be ecstatic when the company reaches financial goals, and finance leaders will be just as thrilled when the company hires and retains top recruits to join the team. When the company is successful, revenue will increase and everyone will make more money. It’s a win-win for everyone – both sides can agree on that.
In the modern workplace, both HR and finance depend on technology and data. Unless you’re leveraging outdated systems, both departments will integrate numerous technology platforms into their systems to improve efficiencies and data understanding. These platforms are based in the cloud more often than not. It’s always been a no-brainer that finance relies on data. HR’s reliance on data has become much clearer in recent years as employers strive to improve benefits packages as well as recruit a more diverse workforce.
Finally, remember that both departments have very complex jobs. Managing human capital is an extremely challenging task, especially in the modern world of pandemics, social justice, and a renewed focus on equity. Navigating the economic impacts of COVID-19 and the corresponding financial fallout on your company is an equally challenging task for finance.
Bridging the Gap Between HR and Finance
Utilizing technology is the best way to bridge the gap between HR and Finance. Ensure that HR understands the basics of what technology finance uses, and vice versa. Whenever possible, get HR and finance on the same, integrated systems. Set up a meeting with both departments, as well as IT, to talk about what platforms exist that can handle both HR and finance processes.
The advantage of using technology to bridge the gap is that technology should have no bias. For example, if an HR employee understands what technology finance is using to make investment decisions, they are more willing to trust that decision. When a finance employee understands what technology HR is using to make strategic talent decisions and investments, they’ll believe that HR is doing everything possible to best invest company dollars.
Make sure both departments are involved in the big picture, strategic decisions that guide the direction of your company. Giving both parties the opportunity to share their perspective from day one of strategic planning will help them know that company leadership is trying its best to meet their needs.
If all else fails, try falling back on the similarities between HR and finance that we discussed in the previous section. Regularly reminding your staff from these two departments about what they have in common can help them see how the success of their counterparts will benefit themselves as well. Consider developing some teambuilding activities or discussion guides to facilitate this type of conversation with your employees.
Business leaders should understand that the employees in HR and finance have different skillsets and perspectives. Key differences include:
- HR is focused on human capital, while finance is focused on monetary capital.
- The language that is spoken in each department is often very different.
However, these two departments also have many similarities. Understanding and acknowledging these similarities is an important step towards bridging the gap between the two departments:
- Both departments care about the overall success of the company
- Both departments rely on technology and data
- Both departments have complex jobs
In addition to helping employees understand these commonalities, helping them understand and implement the technology that their counterparts use is an excellent way to help bridge the gap between HR and finance.