HR and Finance: Keep the Lifeblood Flowing
In biology, the centralized nervous system is one of the hallmarks of an advanced organism. It coordinates essential functions like heartbeat, reflex, and growth so effortlessly that we don’t even have to think about them. This frees us to succeed at more than just basic survival, giving us space to discover our purpose, forge relationships, and build something more than ourselves. In this four-part series, BambooHR explores how HR serves as the central nervous system for your organization, working with Finance, Management, Recruiting, and Marketing to help you define your goals, strengthen your teamwork and collaboration, and succeed at your mission. We start with HR and Finance.
Imagine that you’re reading this blog post while perched in your office chair after several hours of productive work. (Some of you won’t have to imagine this part.) Now you stretch your arms and unfold your legs to stand up, only to feel an almost electric zing shoot up your leg when your foot hits the floor. It turns out that your position put pressure on a nerve and possibly cut off circulation to your leg, and the nerve started tingling when you shifted. If you were sitting there long enough, you might have lost all feeling as the nerves shut down, only recovering after several minutes of the blood working its way back through.
Every cell in your body needs oxygen to function, oxygen that your bloodstream provides. And your central nervous system coordinates everything you need to keep the system flowing, from the automatic processes that keep your heart beating to the tiny signals of discomfort that tell you to stretch or change position.
In your organization, HR is the central nervous system and Finance is the circulatory system. Arguably, they’re the two most essential departments; without money, there are no people, and without the right people, the money stops coming. When both function at full capacity, they both tend to be overlooked, but small problems in their coordination can build over time and lead to a full-blown cardiac arrest for your organization.
HR & Finance are the two most important departments: without money, no people; without people, no money.
Let’s look at three steps that HR and finance should take together to keep the lifeblood flowing in your organization.
Analytics: Spotting the Signs
It would be nice if you could feel a tingle in your arm when one of your teams is understaffed or lacking in financial resources. But some of the signs that spell trouble for your organization aren’t as direct. Pairing HR and Finance on analytic measures gives you more detailed information on your organization than either can gather on their own.
Let’s take the ever-present example of employee engagement. If you’re having an issue with employee engagement, it’s likely to reflect in productivity and affect the bottom line. But without communication between HR and Finance, all Finance will see is reduced revenue or other poor financial indicators. Without context from HR, Finance will try to do their job of balancing reduced revenue by reducing spending. That will likely mean starting with the biggest expense, namely, the HR budget. And without needed funding, HR misses the support it needs to improve employee engagement, and the downward spiral continues.
HR issues are business issues, and you can measure HR indicators like engagement and retention long before the financial indicators show their effects. When you can connect the dots to show how your budget supports your efforts for engagement and retention, you make a stronger case for the resources you need.
When it comes to both physical health and the health of your organization, any diagnosis needs current measurements and testing. But while many of us have upgraded from annual checkups to constant monitoring with our phones or Fitbits, we still expect an annual review to be enough information for HR decisions.
Regular feedback sessions can make all the difference in spotting small issues before they before they become big issues. Then instead of comparing quarterly financial reports with pinpoint reviews scattered over the past year, you’re looking at the same time period and making accurate connections.
A Fresh Infusion of Talent
The circulatory system exists to deliver oxygen and nutrients to every cell in the body. When these cells get damaged, the body responds by flooding the area with more blood, giving the cells what they need to regrow and repair the injury.
When your organization faces a sudden departure, through termination or voluntary resignation, it’s important for finance to support the regrowth. In today’s competitive talent market, candidates pay attention to the resources that organizations spend on recruiting, and poor worker reviews show up like bruises on an organization’s reputation. Helping management and finance understand everything that goes into finding the right person for the position will make all the difference in growing and regrowing your teams, and ensuring that the bleeding stops.
When your people have all the support they need, both financially and culturally, they become the lifeblood of your organization. Developing effective communication and a good working relationship with Finance help keep that lifeblood flowing.