Finding a Winner in the Battle Between HR and Finance 

How will we ever settle The Great Debate? 

No, I am not referring to crunchy vs. creamy or cats vs. dogs. I’m talking about the age-old workplace squabble over whose priorities reign supreme: HR’s or finance’s? 

Perhaps this continual sparring isn’t as heated or emotion-filled as many others in your home or at work. But it represents a nagging and potentially damaging breach in a critical symbiosis that your organization needs to reach your business goals. You also need this symbiosis to keep your leaders engaged, motivated, and working in tandem for the good of the organization. 

So should HR and finance just agree to disagree? Unfortunately, it’s not that simple.

How Far Apart Are HR and Finance? Look at Payroll.

If there’s one thing that HR and finance can agree on, it’s that they disagree on most budget decisions. One obvious example is who should be responsible for payroll. Sure, finance is the incumbent here. But from HR’s standpoint — although payroll is a numbers game — its ramifications bring HR to the table. After all, payroll is ultimately an employee-facing function. In addition, HR professionals are responsible for several key functions that tie back to payroll every day — changes to salary, bonuses, employee working hours, benefits deductions, etc. 

And when a misstep by finance causes a payroll problem, who gets the angry calls, texts, and emails? HR. So, with the majority of payroll data starting in HR’s territory, shouldn’t HR have some control over it?

On the other side of the fence, common wisdom says that because payroll is a numbers-driven game, who better to take the lead other than finance? They’ve put the time in campaigning to ensure voter confidence on day-to-day accounting functions such as reconciliations, posting to general ledger, and taxation compliance. 

When it comes to payroll responsibility, it is finance that has the potential to take the reins — reins that are essential to keeping the organization squarely on its feet. This includes strong internal controls and policies to avoid any financial risk and ensure optimal performance of audits of payroll financial data.

Benefits: Second Verse Same As the First

All of that is similarly true when it comes to benefits. Today as ever, finance and HR continue to quarrel over who should be the guiding force when it comes to benefits, and the issue is not inconsequential. The federal government reported in June (the last month full numbers were available) that benefits cost U.S. employers an average of $14.25 per employee per hour. With an estimated 120.1 million U.S. full-time employees in June, averaging 40-hour workweeks, the cost of benefits would be $48.04 billion — per week.

How can you possibly protect your employer brand and provide the best benefits and still protect the bottom line? It’s no easy task, and with their competing interests, it’s no wonder HR and finance can’t always get along. Not only do they come at the business from different angles and with different priorities, they are different people from the start. 

Of all C-suite roles, CHRO is the most gender-diverse; women make up over half of these hires. The same study found that CFOs are 90% male. It’s also common wisdom — anecdotally supported at least — that CFOs favor a more numbers-driven strategy and hold a more clear-cut view in their strategic thinking, while HR leaders bring a more empathetic and people-oriented approach to the budgeting table.

How Does My Organization Reach Equilibrium?

To achieve the critical balance that protects your organization’s bottom line and your employees’ wellbeing and engagement, it’s critical that HR and finance find common ground, even as they disagree over what they each believe to be their claim on company resources and investments. 

It shouldn’t be that difficult. HR and finance already have more in common than probably either of them would like to admit, especially as workplace technology has evolved to narrow the moat between the two. Any HR or finance director worth their salt will accept that their jobs have become more efficient and their business outcomes more measurable and achievable thanks to technology. Technology is, after all, how both cope with the complexities of their jobs today.

Does this mean that common use of technology — or use of common technology — is going to create some great sea change in the differences between HR and finance? 

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That would be like saying that a professional baseball team’s general manager (who holds the purse strings and is responsible for creating the roster and lineup) should have the same perspective on the team, or even the sport, as the team’s coach (whose job it is to train players and carry out the vision of the GM). Yes, I’m thinking of the film Moneyball and the roles played respectively by Brad Pitt and Philip Seymour Hoffman. And no, I’m not saying HR is on the hook for carrying out the vision of the VP of finance. 

My points are twofold. One is that despite their different and often opposing roles and attitudes, they have the shared objective of fielding a winning team. The second point is that the path to that goal for each of them could be greatly enhanced by shared workplace technology. 

Wait. What? Am I saying that the VP of finance (the GM in our analogy above) could directly benefit from insight into the data gathered by the technology used by HR (the coach, so to speak)? Am I implying that the VP of finance would be well-served by direct connection with the data in the benefits enrollment system, one of the most obvious employee-facing pieces of business technology? 

For starters, yes. But only for starters. Let me go further. Benefits enrollment is only the tip of the iceberg when it comes to seeing where workplace technology can serve two masters. It is, in fact, the only piece that’s seen by the fans (i.e., your employees).

Behind the curtain, finance and HR can both benefit from a platform that actually picks up where enrollment platforms leave off, one that gathers the entire shared benefit process between HR and finance. Both departments would have total access to the complete scope and depth of the shared benefits administration process in one tool — for the common good. This would allow for totally automated accounting, billing, reconciliation, payments, data aggregation, and more — all visible to both finance and HR. It would serve as a shared resource to manage disputes and bring to light the data needed to avoid costly mistakes and reduce manual processes.

In other words, what we’re talking about here is using workplace technology to empower finance and HR to partner strategically, rather than to disagree tactically. 

The Path Forward

With the pandemic and social justice issues this year, HR technology has faced new demands and has set precedents for HR’s roles and responsibilities. In addition, remote work has placed a new stress on your technologies and your relationships. And with Covid-19 further placing pressure on organizations from a financial and wellness perspective, it’s critical that an organization leverage HR tech (translation: that finance and HR partner on technology more effectively) to ensure financial stability and a healthy workforce. 

Sure, one side may be more focused on human capital, and the other on monetary capital. So who ultimately wins the battle between HR and finance? By leveraging workplace tech for common good, your company.

Doug Devlin is the co-founder and chief executive officer of Tabulera, a SaaS benefit administration platform that automates and aggregates benefits administration so you don’t have to. Used by large employers, Association Health Plans ,and PEOs, Tabulera makes it possible to reconcile all your billing, accounting, and payments services in one place, and see your benefits costs clearly. Headquartered in Pleasanton California, Tabulera has offices in the Ukraine and India. 

Doug is a frequent speaker and article contributor at the National Association of Professional Employer Organization (NAPEO) meetings and was the Chairman of the NAPEO Accounting Practices Committee.

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