A recent survey from Towers Watson indicates that human resource executives and their finance counterparts believe greater collaboration is in their future in terms of boosting performance and improving ROI on personnel. The two functions disagree, however, on how quickly and broadly their increased partnership will unfold.
The Towers Watson survey reports that HR and finance professionals currently report their highest areas of joint activity include setting annual budgets for reward programs (cited by 46% of finance respondents and 62% of HR) and determining changes to rewards programs (43% of finance and 42% of HR). Less active collaboration is seen areas likely to become more important in the future, such as overall workforce strategy (35% finance and 23% HR) and talent management (32% finance, 20% HR).
“As the economy improves, companies are putting more emphasis on ways to enhance financial performance,” says Emmett Seaborn, a senior consultant at Towers Watson. “While the HR and finance functions have traditionally worked independently, both groups recognize that it’s their employees who ultimately add value and help drive performance, and that for these workforce programs to succeed, they will need to collaborate more in the future.”
Only 56% of those in finance and 61% of those in HR say their company’s current ROI on rewards is acceptable. In terms of top personnel risks, HR and finance both focus on insufficient leadership development (44% finance, 60% HR), inadequate retention of people and skills needed for growth (40% finance, 49% HR) and inadequate investment in talent (34% finance, 50% HR).
HR is far more convinced that there will be increased collaboration in their future (70% compared to finance’s 49%).
“HR/finance collaboration can and should go beyond rewards to encompass the full strategic workforce agenda,” says Seaborn. “Ultimately, sustaining and improving performance must be a shared responsibility between the two functions since it depends so heavily on the relationship between what an organization can afford to invest in its people and the financial goals it has to deliver.”
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