Finance Is from Mars, HR Is from Venus

Can finance and human resources ever see eye to eye? They'd better.

For these reasons, experts say more HR people are getting trained in finance or are even coming from the finance department. Of the 40 percent or so of HR heads who come from outside HR, the largest portion comes from finance or accounting, according to Wayne Brockbank, a professor and the director of the Center for Strategic HR Leadership at the University of Michigan’s Stephen M. Ross School of Business.

Sara Meyerrose, executive vice president for corporate and employee services at First Horizon and First Tennessee Bank, for example, was treasurer before becoming head of HR in 1998, and also has her CFA. J. Crew Group’s new executive vice president and CFO, James S. Scully, was treasurer and then senior vice president of strategic and financial planning for Saks Inc. before becoming its executive vice president of strategic planning and human resources in 2004. For his part, Kissinger took a battery of finance courses about 10 years ago when he realized the growing importance of finance.

Even finance professionals are ceding some credit to their colleagues in human resources. “The HR role is big and powerful and immensely valued,” says Joe Wilhelm, Unilever’s vice president of finance. The HR member dedicated to his finance team “is very good with numbers,” he says, and skilled at “choosing appropriate metrics, measuring them well, and communicating them to employees” for key initiatives. As for her attention to the bottom line, she can be “more cold-blooded than I am sometimes,” jokes Wilhelm.

Grounds for Complaint

To be sure, this idyllic partnership isn’t the case at every company. Some CFOs grumble about the lack of business savvy that still seems to accompany HR-related issues. “I’m still training my HR person to understand the numbers,” says Lyle Richter, CFO and vice president of finance of Fox River Paper Co., in Appleton, Wisconsin.

And in some places, HR is still exasperated by being shut out of major decisions. “There’s been a whole lot of discussion [about HR and finance collaborating], but whether there’s been movement, it’s hard to tell,” says Nobscot’s Carvin.

One of the dangers of having HR get too close to finance, of course, is that there may be no one left to advocate for employees. One large company recently made a decision to cut retiree medical benefits in order to meet short-term bonus targets on the strength of the CFO’s argument that it would save millions of dollars, says Johnny C. Taylor Jr., chairman of the Society for Human Resource Management (SHRM) and senior vice president, human resources, for LendingTree.com. “The HR executive was trying to say, ‘It’s legal, but it’s the wrong thing to do, and it sends the wrong message to current employees,’ but she wasn’t strong enough,” says Taylor.

And even though about 60 percent of HR chiefs report to the CEO while only about 12 percent report to the CFO, according to a recent online survey by SHRM, “the CFO is often deemed to be right when it comes to costs, no matter where those costs come from,” Taylor says.

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