4 Ways HR and Finance Leaders Can Create a Differentiated Partnership

If CFOs are from Venus, then CHROs are from Mars.

It’s funny to visualize, but in many cases, it couldn’t be truer. The relationship between Finance and HR leaders can understandably be in conflict; even as both want the same thing — company success. The methods to their respective madness are often based on context: (for example, the desire to cut costs versus the desire to view layoffs as a last resort or viewing people as costs to manage versus investments to derive great returns). One challenge both can agree upon is the impact of changing workplace dynamics on culture, operations, and productivity. 

As you look towards 2024, CFOs and CHROs would do well to foster cohesive working relationships.  Here are four elements to consider:   

This may sound simplistic but if strong communication is the hallmark of great friendships and romantic relationships, then why would the partnership between a CFO and CHRO be any different? While these roles focus on winning from different angles, a shared perspective on business priorities can save you from taking unnecessarily conflicting actions. Of course, sometimes the CFO must make decisions that may not be in the CHRO’s ideal plan (and vice versa); however, maintaining close contact creates a norm of trust and understanding, which ultimately leads to greater alignment.  

There’s a reason growth stage companies bring on both CFOs and CHROs — both roles bring different business acumen to the table. However, in a differentiated partnership between the two leaders, that acumen is shared; each party has perspective into how the other’s initiatives can drive great business outcomes. This in turn enables the CFO and CHRO to advocate for each other when it matters most: at the executive table. Think of yourselves as “co-evangelists,” each pushing forward the aims and needs of the other. 

When it comes to creating more visibility and alignment, technology is your best friend. As you build out your 2024 budget, prioritize tech that makes the greatest impact and improvements to workflow, employee experience and net cost management or reductions. While certain services in your tech stack will primarily serve a single department, other technologies can be used to foster more transparency in departmental initiatives and their impact on a cross-departmental level. 

Data and storytelling are critically important to a differentiated partnership between HR and Finance leaders. It’s much easier to justify expenses when an initiative can be directly linked to the bottom line. For example, if a CHRO proposes an employee recognition program to boost eNPS scores, it would help to be able to show how eNPS affects profitability. These insights can drive change and ultimately affect future investment decision-making. 

The most successful companies have strong alignment at the executive level, especially between the heads of Finance and HR. But forming a differentiated partnership takes work and requires significant commitment on both sides. 

If you’d like support fostering a stronger relationship with your Finance or HR counterpart, reach out to Operating Partners Joe Gwozdz or Steve Schloss or to us directly at edge@edisonpartners.com.