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CFO and HR Collaboration

Now - more than ever - companies need a better understanding of the relationship between cost and performance, especially as they are struggling to identify, secure, and develop talent. Market leading companies are tackling this issue through increased collaboration between their CFO and the senior HR officer.

The constantly changing global business environment requires every company to continually adapt its strategies as well as introduce new products and services to remain competitive. By improving collaboration between the CFO and HR, businesses can ensure that both the financial and human resources impacts of decisions are addressed as strategies are developed and implemented.

A recent global survey of CFOs and chief human resource officers (CHROs) by EY finds that a strong relationship between the CFO and the CHRO is linked with superior business performance. Companies where the relationship has become more collaborative over the past three years report higher EBITDA (earnings before income tax, depreciation and amortization) growth and stronger improvement across a range of human capital metrics, including employee engagement and productivity.

High performing companies report:

  • 80% say the CFO/CHRO relationship has become more collaborative over the past three years
  • Where the relationship is significantly more collaborative:
    - 41% had greater than 10% EBITDA growth in the last year, compared to only 14% of other companies;
    - 43% saw a significant improvement in workforce productivity in the last year, compared to only 10% of other companies;
  • 58% rate the collaboration on the business strategy and development as excellent versus 22% at others;
  • 49% consider their company to be excellent at using data analytics to improve HR performance, versus 16% of others;
  • 51% say that the CFO in their organization is heavily involved in identifying and tracking HR metrics, versus 10% of others.

From a CFO’s perspective, profitability is the goal. This can’t be achieved without a workforce operating at full productivity supporting company growth. Investing in collaboration with your HR peer is an excellent way to ensure you have the people in place to meet and exceed business goals.