The professionals who run a company often have differing goals. For example, financial professionals, who are concerned with the company’s financial stability, may clash with the human resources department, which focuses on employees’ issues. HR may not always understand the cost implications of a program, where as finance may not be aware of the impact of workplace demographics.
In actuality, all parts of a business should maintain coinciding objectives. According to the Pete Drucker’s 1954 book “The Practice of Management,” goals should be defined according to the acronym “SMART,” which stands for specific, measurable, achievable, relevant and time-based. The point of SMART goals is to make a clear connection between an employee’s work and a department’s goals. Merging business with human resources goals within a company is tricky but important.
Understanding what a company wants to achieve is a key element to overall success, so it is necessary to specify particular goals. Goals should be clearer than simply saying “hiring more employees” or “cutting down health care costs.” Clearly identifying a goal– such as “Hiring fifteen more software engineers by the end of the quarter to manage ten accounts each related to our $50 million investment in clientele software management” — allows a company to readily measure progress in achieving the goal and accurately measure success rates. A study by Ventana Research, a leading benchmark research and advisory services firm, found that 46 percent of finance organizations do not work closely with HR to improve company processes. By coordinating objectives with one another, finance and HR departments can remain on the same page.
A common conflict between the two departments is defining which strategical approach to use in order to achieve the company’s goals. Each side believes that there is only one way to reach the end result. Human resource professionals work strictly with employment laws, while business leaders are constantly on the lookout for continuous change. For the two departments to reach an understanding, finance will need to start viewing employees as assets instead of and expense.
Because of the recent recession and the implementation of the Affordable Care Act (ACA), the two departments must work together to reduce healthcare costs. Starting this year, employers will have the opportunity to decide either to continue providing health insurance, or to let their employees obtain coverage through the new exchanges created by the ACA, such as Medicaid or one of the health care plans provided through ACA. Companies need to take more drastic action by looking at long-term plans to manage rising costs in copays, insurance levels and benefit programs. This is where financial advisors may come to the rescue. At the same time, HR departments need to maintain lawful, ethical and humane approaches to providing employee benefits.
A recent study by Sage HRMS, the longest-running HRMS solutions provider, found that there are more innovative ways for human resource departments to consider finances while setting company goals. By going paperless and using cloud-based services, companies not only help the environment, but also cut costs tremendously. According to the study, a company with eight employees can save around $10 thousand a year doing this, while a company with 370 employees can save $1 million. When finance and HR come together, the opportunities for company improvement are endless.
Do you combine your human resources and finance departments? What are your thoughts about having them work together? Do you think that it would be beneficial? Share with us in the comments below!