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Building an HR/CFO Partnership

True partnerships between HR and the CFO are not common, and they can be difficult to establish. But a good working relationship between the two will drive business.

Keeping a finger on the pulse of the organization is one of the most important responsibilities of senior HR leaders—and CFOs.

Julie Turpin, chief people officer of insurance firm Brown & Brown, based in Daytona Beach, Fla., is up to the challenge. And when she visits the firm’s business units, CFO Andy Watts joins her. For Turpin and Watts, a hallmark of these visits is meeting people who work in critical roles.

“This provides deeper insight into [employees’] actual roles, growth and development, how they are performing,” Turpin says. “We can see a scorecard [on performance], but this also lets us see softer skills.”

Insights gained from the visits inform business decisions such as how to determine levels of equity compensation for Brown & Brown’s key employees, Turpin says. Questions she and Watts consider include “How much equity should we offer?” and “Will we get a return on that?” 

These visits are part of a larger undertaking between the two leaders to improve company performance. “We talk about HR through the lens of how to drive value for the organization in a quantitative manner,” Watts says. “HR can be qualitative, but you also have to sit down and discuss how we get value out of the dollars we spend.”

True partnerships between HR and the CFO are uncommon, and they can be difficult to establish. But a strong working relationship between the two can yield significant benefits and drive business.

Becoming Business Partners

In many ways, Turpin is well-positioned for this type of HR/CFO partnership. She spent part of her career with the company as a services segment leader responsible for top- and bottom-line results. In that role, she developed an operational mindset that has helped to ground her working relationship with Watts.

“We talk every day, and everything we discuss ties back to talent,” Turpin says. “I hear things. He hears things. Then we compare notes on what’s happening in the organization.”

Building this type of working relationship with the CFO takes time, but it can pay off in various ways for HR leaders. Not only do HR and finance overlap on many points, such as payroll, but talent represents the largest single investment for most organizations.Screen Shot 2022-03-04 at 95449 AM.png

Although not everything HR does is easily measurable, having a good relationship with the CFO can provide opportunities to expand the use of metrics. For example, HR can work with the CFO to identify how a new benefits program or compensation adjustments are affecting employee retention and engagement. “If employee retention is up, does that help the organization retain and win more customers?” Watts asks. “In some cases, we can measure multiple returns on HR spending.”

This HR/CFO partnership can also yield important benefits when it matters most for an organization. In 2020, Dream Corps, a criminal justice reform nonprofit, faced the double impact of the COVID-19 pandemic and George Floyd’s murder in Minneapolis. “We had to redo the whole forecast and budget because it was no longer effective,” says John Payne, the organization’s CFO.

With the Oakland, Calif.-based organization’s 50 employees under stress due to the public health crisis and growing protests against social injustice, Payne worked with HR to rethink the organization’s entire approach to supporting employees.

“We had to make sure our people were taken care of and that the money was there to do that,” he says. Part of that effort focused on getting people settled as they transitioned to working from home, but there was also a need to support employees as individuals.

With much of the organization’s in-person meetings and conferences on hold, Payne worked with donors to redirect contributions to provide mental health services and other employee-centric support. 

“I didn’t hear ‘no’ from anyone,” he says. “It all got approved, and we were able to shift money around to take care of our people.”

Finding the Way Forward

How easy will it be for an HR professional to build a strong working relationship with a CFO? That depends on the company and the individuals involved.

Steve Watson, CFO and CHRO of Child and Family Support Services in Phoenix, says many CFOs see HR as an administrative function, rather than a strategic one, but that perspective is changing. 

“The COVID-19 pandemic elevated HR in many companies because so many people began leaving,” says Watson, who adds that this represents a key opening for HR to reset its relationship with the CFO. “This is an opportunity to come together and understand the constraints the company faces when attracting talent.”

In many cases, HR and the CFO will have to find ways to increase employee pay and provide more benefits to attract and retain employees. HR and the CFO can “work together to tackle this challenge before presenting solutions to the CEO,” Watson says. “If finance says ‘no’ to more pay and benefits and HR says the company has to pay more to find good people, they are not going to find the way forward.”

In most cases, HR leaders should be prepared to make the first move. It is often in HR’s best interests to do so, because a strong relationship with the CFO will increase HR leaders’ own effectiveness and impact on the organization.

“The head of HR is not always at the executive table,” says Danielle Murcray, CFO at AttackIQ, a cybersecurity company with 130 employees based in Santa Clara, Calif. “The CFO can help HR leaders if that is the case by being an advocate for HR and giving HR a voice at that executive table.”

Murcray sees a natural connection between HR and finance. “It’s no secret that 75 percent to 80 percent of operating expenses are related to people, so there is a natural fit between HR and the CFO, whether they work in separate departments or together,” she says. 

In particular, Murcray views the link between higher performance and higher profitability as the key to partnering with HR. For example, she sees opportunities for the CFO to add expertise when designing and monitoring specific metrics. “HR understands the pulse of the organization—what employees need, how to drive engagement, culture and employee satisfaction,” she says. “The key is to translate that into productivity.” 

This is not always easy for CFOs to do on their own. “The CFO can get stuck in numbers and something can get lost in translation,” Murcray says. “The CFO needs to see employees in the organization’s success. HR can bring that perspective and show how employees are important to the organization.”

For example, when the pandemic hit, AttackIQ took some of the money the company saved by moving to remote work and used it to support employees and promote virtual collaboration. To that end, the company gave each employee $500 to enhance their home offices. The company then asked employees to show before-and-after pictures of their workspaces during companywide virtual meetings. “It was a lot of fun and turned the conversation away from hard dollars to employee productivity,” Murcray says. 

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Taking the First Step 

Partnering effectively with the CFO does not require a degree in finance, but it’s important to have a general knowledge of the issues and the pressures the CFO faces. Working with the CFO on issues where HR and finance overlap can be a good starting point. This can mean tracking some common metrics that may indicate whether HR is having the expected impact on company performance in areas such as employee retention and cost-per-hire.

Janet MacAulay, CFO of Convo Communications in Fremont, Calif., which has 450 employees in four countries, advises HR executives to look for ways to collaborate with the CFO on a strategic level first. She urges her team to take a step back and look at HR’s initiatives independent of what finance is doing. With that perspective, there is a better chance of understanding what HR is trying to accomplish and then identifying how finance’s strategic initiatives mesh with HR’s. 

“Starting the conversation at the strategic level can help you find common ground,” she says, whereas “interaction at the initiative level tends to end in a squabble.”

When it comes to building an effective HR/CFO partnership, Payne emphasizes the importance of trust. “Trust, not ego,” he says. “It’s not about being right.”

Payne works with Rachel Lauren, senior director of people and culture at Dream Corps, on determining when to add employees to support the organization’s exponential growth without harming cash flow. “We need to make sure we are bringing in people at the proper time,” Payne says. 

This process includes a review of compensation bands for a remote workforce scattered across the country. The effort began with a discussion about setting salary bands by geographic location with adjustments based on local living costs. However, Payne and Lauren also recognized the need to ensure pay equity and recalibrate the bands regularly while carefully managing cost-of-living adjustments. 

The timing of outreach to the CFO is also important. “Finance is steeped in closings at year-end,” Payne says. “If you need eleventh-hour help at that time of the year on an issue that could have been dealt with a long time ago with better communication, that can build resentment.” 

Increased communication between HR and finance throughout the year can help HR get the assistance it needs without putting undo stress on finance.

HR executives who want to start building a relationship with the CFO can simply request an informal meeting. Although this seems straightforward, many HR leaders do not extend the invitation. “During my career, I have never had HR approach me and ask about the key issues I’m facing and what is keeping me up at night,” Watson says. Even during the normal course of business, he says, it is important to ask, “How are you doing?” and “How can I help you?”

Brown & Brown’s Watts advocates for an ad hoc approach to building the relationship between HR and finance. His advice is to have lunch regularly to discuss work in an informal, unstructured way. “Then build on that by keeping each other in the loop about the projects you are working on,” he says.

Over time, these conversations can help each party pause and rethink an issue, and possibly change their viewpoint as a result of the other’s input and perspective. CFOs and HR leaders think differently, Watts says, and each party can learn to value those differences.

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Identifying a Common Language

HR leaders and CFOs may feel there are more differences than similarities in their work. But if they focus on organizational success, they can find a common language that moves them forward toward their goals. For example, if the CFO is focused on increasing revenue, HR can make the case that investments in employee training and development could move the organization closer to those revenue targets. 

“HR needs to come prepared with solid data from the metrics they have in place to support their recommendations,” says Heath Eskalyo, principal partner and CFO of law firm Kelley Kronenberg in Fort Lauderdale, Fla. 

Those metrics, such as cost of turnover and specific productivity numbers, can help HR leaders and the CFO establish a common language—as long as they both agree on which metrics are appropriate and relevant and how to calculate them. Watson recommends that HR and the CFO choose the top two or three metrics that drive the business. Screen Shot 2022-03-04 at 95549 AM.png

For example, Watson focuses on headcount. As a social services agency, Child and Family Support Services relies on fees charged for the services its employees provide to patients. If the organization is having difficulty hiring or retaining employees, those vacancies translate directly into lost revenue.

Similarly, if average cost or revenue per staff member is changing, that can shed light on what is happening with the business. If costs are going up and revenue is falling, that should be a flashing red light, Watson says. If revenue per staff is increasing while costs remain steady, HR can make the case to transfer some of that revenue back to employees via bonuses, better benefits or higher pay. 

“The best way to get through to the CFO is to acknowledge the connection between employee performance and business success,” Murcray says. Sometimes, that can involve changing the CFO’s mindset so they see hiring as a good thing and not a drag on profits. “This is the traditional tension, where HR wants to spend on people and the CFO pushes back, so focusing on common purpose can be very powerful,” she explains.

Identifying and tracking such metrics requires a solid grounding in the basics of the business and how it makes money. “To be seen as a true strategic partner to the leadership team, HR has to be able to educate leaders on how people programs support the business and help it reach its strategic goals,” Eskalyo says. “That helps build trust in them and their programs’ ability to make an impact.”

Adding to the HR Toolkit

David Meniane, CFO of ­, came to appreciate the value of HR after the company doubled its workforce from 1,000 to 2,000 employees over 12 months in the middle of the pandemic and a supply chain logjam. Following a year of the department rushing to keep up on talent acquisition and engagement and developing appropriate compensation and benefits programs, he believes HR also is leading the organization’s evolution toward greater social responsibility and diversity, equity and inclusion. 

“HR will become even more important,” he says. 

To meet all these challenges, Meniane expects Stephanie Urbach, the company’s head of HR, to spend time on the front lines talking to employees and managers about their experiences and concerns.

Other organizations are likely to follow suit in expanding HR leaders’ roles and experiences—by making finance and operations part of the HR career trajectory, for example. That is another way to cement a stronger HR/CFO partnership.

“When you have this background, you already know the language of finance,” says Kate Bravery, a partner with consulting firm Mercer in London. This will become more important as the workplace continues to evolve. For example, HR leaders may be called upon to gauge how remote and hybrid work impact both productivity and the organization’s cost structure. “You can’t answer those questions without data,” she says. Although technology makes these tasks much easier, “HR must have the skills to execute.”

Fulfilling this evolving role will challenge HR leaders. “Anyone can be reactive and solve a problem that is presented to them,” says Ron Oertell, CFO of Purchasing Power, an employee purchasing program in Atlanta. “HR leaders will need to be more proactive, knowing where the company is going and launching initiatives to ensure it gets there.”  

Joanne Sammer is a New Jersey-based business and freelance writer.

Illustrations by Anton Vierietin/ Shutterstock.