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At most companies, there’s at least a baseline level of collaboration between HR and finance people. Without some coordination between the two, it would be difficult to operate.

But the times demand that HR and finance go deeper and engage in a true strategic partnership. I’ve seen how it can work firsthand: with modern planning technology, HR and finance can team up in new ways that drive better performance for their respective departments and improve company results overall.

At some companies, HR and finance don’t have a history of working closely together. If this is your situation, you can make the first move toward a closer partnership by finding opportunities to collaborate on employee compensation issues. HR and finance can work together to gain deeper insights into how people strategy affects company finances and vice versa. They can learn to better integrate each other’s priorities, create closer working relationships, and elevate the company’s financial IQ among employees across the organization.

If your organization’s HR and finance groups already collaborate extensively, modern back-office software automation can allow you to take an even deeper dive into the data and work together on high-profile strategic projects like workforce planning initiatives. A common data set that is accurate and reflects real-time business conditions is the key to eliminating data silos. With modern technology in place, HR and finance can collaborate to drive company success.

Using Employee Compensation and Workforce Planning as the Catalysts

Employee compensation and workforce planning projects can be the catalyst to improving your HR and finance teams’ relationships. It’s helpful to begin by keeping in mind that you have a common goal: company success. Make sure you’re sharing the same data, and use it to keep each other informed about activities that affect the people and money sides of the ledger. Frequent communication is the key.

Finance oversees company spending, so they’ll be interested in how HR is investing in recruiting, hiring, training, and creating a solid company culture. HR is in charge of human capital, so you can use your influence to put the right resources in place to ensure company success and invest in the workplace of the future. In both cases, HR and finance have a stake in the outcome and the same interests. Working together helps you realize your respective goals.

Many HR and finance teams received an unexpected head start on closer collaboration as their companies scrambled to adjust to the economic fallout from the pandemic. For some HR teams, that meant scaling up quickly to meet an explosion in customer demand. For others, it meant responding to a massive decrease in demand. In both cases, HR and finance have had to work together to navigate through the storm.

Using Data to Make Better Decisions Faster

One challenge HR and finance teams often face is reaching a consensus on priorities. You can overcome this hurdle by first remembering that you’re all on the same team and then by using data to drive your decision-making. Data can help you focus.

The HR-finance partnership rests on the mutual understanding that wisely investing in people drives revenue and achieves strategic goals, and that strong revenue growth is needed to fund people investments and company growth. This understanding underlies virtually every workforce planning initiative. To work together cooperatively, HR and finance must recognize how interrelated their efforts are.

Without that understanding, it’s possible to make a move like putting the right people into a new territory to drive growth, but doing it prematurely while undermining performance and revenue. That sort of outcome is less likely when HR and finance collaborate closely on strategic planning projects. Each has a set of levers that can change outcomes, and working as a team, they can use those levers more effectively to improve performance and revenue.

Technology Can Facilitate Closer Collaboration

The fast-moving pre-pandemic business climate demanded maximum agility, so companies were already conducting reorganizations with some frequency and working on digital transformation when the pandemic hit. COVID-19 underscored the need to be able to quickly regroup on the planning front, since it made annual plans and forecasts from the first quarter completely obsolete by the second. It also emphasized the importance of accessible, integrated data and technology.

At the height of the shutdowns, reorganizations were often about company survival, but for companies capable of continuous planning, those initiatives were also about finding new ways to thrive in a transformed economy. Businesses with access to real-time data from across the organization on a shared platform were able to pivot more quickly to take advantage of new opportunities, engaging in planning and decision-making across finance, HR, and other business units.

When business unit leaders operate from a common workflow, no one has to argue about the numbers because everyone accesses the same accurate, up-to-date information. There are no barriers to decision-making because all of the data is on the same shared platform. This allows teams to model various scenarios and make plans to deal with every contingency.

Many companies — especially those with finance teams led by digital natives — are putting technology in place to enable better, faster decision-making. They’re able to quickly provide the numbers their CEOs need to steer the company through the economic currents. When HR works closely with finance, they can jointly serve as trusted business advisors. In this way, an aligned, technology-enabled HR-finance partnership drives company success.

Melissa Dreuth is senior vice president of people and culture at Planful.

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