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May 16 — Improving cooperation between a company's chief human resources officer (CHRO) and its chief financial officer (CFO) can have a dramatic impact on the bottom line, according to a recent survey by consulting firm EY (formerly Ernst & Young).
Among the four out of five CFOs and CHROs who “say their relationship has become more collaborative over the past three years,” 41 percent had greater than 10 percent growth in company earnings before interest, taxation, depreciation and amortization in the last year; 43 percent enjoyed a significant improvement in workforce productivity; and 44 percent saw employee engagement improve significantly—compared to 14 percent, 10 percent and 9 percent, respectively, of companies that did not report such closer collaboration, EY said in a May 12 press release about the survey.
EY conducted the survey in December and January among 550 CFOs and CHROs in about 500 companies in 30 countries. Eighty of the survey participants were U.S.-based, the company said in a May 16 e-mail to Bloomberg BNA.
The HR and finance “worlds are coming together, and both sides need to up their game,” Steven Jacobs, an executive director in EY's Human Capital group, said in a May 13 interview with Bloomberg BNA. “HR needs to know the financial and commercial side of the business, and the CFO needs to know more about the people side and how people contribute to the business.”
High-performing organizations in general enjoy better cooperation over such key aspects as board structures and the corporate operating model, Jacobs said, and that extends to employee and business data that HR and finance both make use of. Thus, it's a good practice to create “global business shared service centers” with staff who can answer questions for both departments and the departments' “joint clients,” he said.
“What we find is that the world is changing today, and human capital represents such a large percentage of expenses, it requires HR and finance to come together much more,” said Jacobs. “Not only does that get better business results, it creates better HR performance because there are better engaged employees.”
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Information on how to obtain the survey report is available at http://www.ey.com/GL/en/Issues/Managing-finance/EY-CFO-program-high-performing-partnering-for-performance-CFO-and-CHROs.
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