HR Administration

Six Ways to Guarantee Finance Doesn’t Respect You as an HR Pro

By Kris Dunn

Jan. 14, 2011

You’re an HR leader, and you demand respect. You deserve to be in the same league as marketing, engineering and operations.

There’s just one little catch: You won’t be viewed as an equal to anyone until you’re respected by the group that controls the budget, the money, the analysis and, thus, your career.

That’s right; I’m talking about finance. Respect the number jockeys and seek to influence them weekly, if not daily. If you’ve ever struggled to be taken seriously by your peers on the leadership team, odds are the finance group held the keys to your turnaround.

Of course, influencing the finance group takes focus, and it’s something HR classes and organizations don’t teach you in textbooks. The result is a trail of tears, and here’s the top six ways many in our profession guarantee the finance teams around them don’t respect human resources pros:

1. Not having your game together when it comes to loaded full-time employee cost. Your friends in finance like to think of the business world as a collection of units, and they understand better than anyone the cost, value, demand and timing of every unit in the company, which means they understand the business. Guess which department controls the units that account for 60 to 80 percent of the units that matter from an expense perspective? You guessed it, it’s you: HR. Nothing irritates a finance pro more than line leaders who don’t understand the cost of what they control. When they ask you for the loaded full-time-equivalent cost of each employee in the company, they’re asking for a ballpark figure related to the cost of benefits, payroll taxes—all the costs beyond salary required to house an employee. They think you’re weak if you can’t cite that on command and break it down for them in detail conversationally.

2. Not being the expert of record when it comes to compensation at the local market level. Compensation budgets are made up of all the positions your company expects to employ in a budget year. Your friends in finance will periodically get requests to add positions to the budget, at which time you’ll get the following request from the bean counters for budget purposes: “What’s the salary you expect to offer for a call center rep in Rochester?” It’s not a range; it’s the actual offer you would expect to make on a consistent basis for that position in Rochester. They’re plugging in a market number to drive the cost model. If your answer is “I don’t know” or “Let me get that for you from my comp analyst,” assume the finance folks think you’re a lightweight. Their thinking is as follows: Call center spots make up 29 percent of company headcount, so shouldn’t you know the market rate for reps where your company has call centers so you can help make business decisions about where to expand and contract? They’re right.

3. Not having a dashboard of metrics you call your own in HR to help drive your decisions. Finance folks love dashboards, and when they’re talking shop with you about stuff that affects them, they love to hear that you’re in control of your own numbers. Your dashboard doesn’t have to be anything fancy. Items like turnover, cost per hire, time to fill, etc., are fine, but you have to be able to talk about each metric and show competence that you know which levers you can pull to affect any item on your dashboard. Also, make sure you update the dashboard you use monthly and send it out to those who need to know (including all in finance). Nothing affects finance’s view of your HR practice like the feeling you run your business by the numbers, even if it’s simply one of many inputs you consider.

4. Not being able to distinguish what human capital assets are expendable in other people’s departments. The exercise is called the fire drill, and it’s the periodic cost reduction exercise that calls for the business to consider what budgeted items they can live without and, in horrible times, what current assets can be shed without totally cannibalizing the business. Not all fire drills are public. Since people costs constitute 60 to 85 percent of a company’s total expense load, finance wants to be able to come to you for opinions about which human capital assets (people and the items in place to support them) are expendable. If you don’t know enough about the talent in your company to have an opinion, you’re useless in this drill.

5. Being unable to talk about any of the above metrics, numbers or information on demand without doing research. Real finance pros have a pretty good directional feel for the numbers they track. Ask them a question and they’ll give you an answer they feel pretty good about, even if they want to double-check the data after providing you with a guesstimate. Once they check, they’re usually right.

Of course, they expect the same from you. They want you so in tune with the numbers related to your function that you can sling accurate guesstimates with the best of them. The reliability of your guesstimates in spot conversations with finance is built over time, so there’s no way to fake this. You simply have to be in command of the number detail that emulates from your HR practice.

6. Not doing cool stuff that benefits the finance and accounting departments. It’s Influence 401, people. When you’ve got pilot projects and freebies that offer great exposure and benefits to the departments that receive them, don’t leave out the number jockeys. They’ll remember you didn’t forget them and make sure you’re taken care of as a result.

Bottom line: You can’t be viewed as an equal without having a productive, positive relationship with the finance group. It won’t happen by simply being nice to them. If you want finance to think you’re a player as an HR pro, you’re going to have to understand the numbers that drive the HR function from their viewpoint.

But simply understanding the numbers isn’t enough. You’ve got to know it well enough that you can discuss it on the fly without supporting documentation. Like Jeff Spicoli from the film Fast Times at Ridgemont High once said, “Learn it, know it, live it.”

Words to live by if you want respect from finance.

Workforce Management Online, January 2011Register Now!

Kris Dunn, the chief human resources officer at Kinetix, is a Workforce contributing editor.

Schedule, engage, and pay your staff in one system with