The HR-Finance Disconnect: How HR Can Prove Its Value to Finance

Naturally, HR and finance departments speak different languages. 46% of HR leaders reported the biggest obstacle to working with finance was identifying shared priorities and strategic goals.

“The CFO-CHRO relationship works when the common denominator is a business outcome, and it breaks down when it becomes about internal processes,” said Chris Garber, CFO of Guild, an education benefits platform.

This can come to a head when a finance department treats employees as a business expense. 

So, what can HR leaders do to narrow this divide? Here are three tips.

Research: Navigating the C-suite

1. Understand the Financial Side

For HR leaders to get on the same page as CFOs, the first thing is to understand their language. 

Katie Roland, CHRO at KCSA Strategic Communications, a PR firm in New York City, advises fellow HR leaders to learn the financial mechanics of their organization such as cash flow, team profitability, and vendor contracts. Proactively bringing that knowledge to budget conversations before the finance department requests information will demonstrate your big-picture understanding. 

“When pushing back on cost-cutting proposals, use data rather than advocacy,” Roland said.

For example, you might calculate that eliminating an in-house recruiter would cost six times their salary in external recruiting fees, or you might show that performance review software paid for itself in recaptured manager and employee time. This demonstrates that the people issue you are working to solve is a business problem.

“The best relationship I’ve ever had with a CFO felt like a conversation, passionate at times, but equal. We argued, pushed back, saw things differently, and the company was better for it,” Roland said.

2. Speak the CFO’s language

HR leaders shouldn’t lean on metrics like engagement scores and training hours in conversations with the finance department, advised Gershon Goren, founder and CEO of Cangrade, a provider of AI-powered candidate screening software. 

Instead, he suggests CHROs pick terminology that matters to financial professionals, such as margin, revenue, risk and cost savings. For instance, say something like, “We reduced time-to-full-productivity by three weeks per hire, saving about $92,000 in ramp-up costs across 40 new hires” rather than simply stating, “We filled 40 roles.”

Unless HR leaders translate their work into finance-speak, they won’t win their case. “They will keep losing the budget conversation — not because the investment isn’t justified, but because the case isn’t being made in a way that lands,” said Serah Morrissey, senior director of people and culture at Schoox, a learning management system software company.

Along the same lines, Goren recommends identifying the KPI that defines a top performer for every role before it’s filled.

“If you can’t name the KPI that makes a top performer, you have a headcount plan, not a people strategy, and finance will treat it that way,” he said.

Additionally, it’s important to demonstrate workforce ROI rather than static reports, advised Raj Sharmacharya, co-founder and chief strategy officer of Veritas Prime, an HR software company. This delivers actionable insights that can earn HR a seat the financial strategy table.  

All of this requires HR leaders to adjust their mindsets.

“HR as a discipline faces a perception problem,” Morrissey said. “It is often seen as administrative, passive and transactional. The truth is, HR has the passion and vision to drive real impact. But they need the right strategy and language to quantify outcomes in ways that resonate with finance departments.”

Related Article: The CHRO & CFO: Profit from Partnership

3. Accelerate HR processes by redesigning them 

HR teams can boost processes by revamping them. Reconfiguring “people processes” like acquisition onboarding to align with employee experiences and tracking financial results can help demonstrate value, according to Michelle Mikesell, SHRM-SCP, chief people officer at G&A Partners, a professional employer organization. 

For example, the HR team offered flexibility for new employees by allowing those with planned personal travel to go into a negative balance for PTO. G&A reduced first-year turnover among acquired employees from more than 20% to less than 5% by prioritizing its people, she said. This, in turn, improved client retention, according to Mikesell.

To help monitor financial results, she recommends using eNPS surveys and regular pulse checks to generate before-and-after data that links workplace-culture investments to measurable business outcomes.

Madeline Grecek, director of people operations and transformation at Remote.com, an HR and payroll platform, suggests improving transparency to accelerate HR processes. “Communicate impact with clarity and predictability: Show finance what changed, why and what it means for cost or timing,” Grecek said. “Consistency builds trust over time.”

John Egan is a freelance writer based in Austin, Texas.