Integrating HR and financial departments is a worldwide trend and greatly facilitates a company’s processes, for a number of reasons. There are several vendors in the market to outsource these activities, but companies need to be cautious, since outsourced companies must be trustworthy and ethical.
According to a 2017 global survey led by MIT, 35% of companies plan to create a shared finance and human resources (HR) within a year. Survey respondents said a closer finance and HR collaboration in the cloud is a strategic need for improvements in productivity and performance, promoting operational excellence and accelerating innovation.
See below why your company should bring finance and human resources together:
Companies that integrate finance and HR have better results
A global survey by Ernst & Young (EY) pointed out that a close relationship between CFOs and human resources managers improves business performance.
Companies in which this relationship has become more collaborative over the past three years have reported higher Ebitda (pre-earnings, taxes, depreciation and amortization) and more significant advances in human capital metrics, including engagement and productivity.
The study with 550 CFOs and HR directors found out that 41% of companies with good interaction between the two areas had Ebitda growth of more than 10% last year, while only 14% of the less efficient companies achieved similar results .
Reducing and optimizing processes
Approaching employees also reduces and optimizes processes. Integration programs that aim to bring employees together periodically eliminate rework, as everyone leaves meetings aware of what the company will do.
Thus, each sector can develop its work almost automatically, since they do not have to wait to receive information.
Relationship between costs and performance
The EY study has identified that one of the factors these sectors approach is the talent shortage, which makes companies -especially those in mature and fast-growing markets- better understand how much an employee’s performance costs.
HR has a key role in planning
If anyone thinks HR is limited to recruiting, evaluating and coaching, is very mistaken. The importance of this sector is increasing within companies and gaining relevance in strategic planning. Nowadays it’s important that an HR specialist knows how to detect trends, project scenarios and seek innovative solutions.
New business models
Many organizations have changed their business models, continually transforming key functions such as finance, HR and IT. The search for efficiency has led companies to move towards a multifunctional and global service model for growth in new regions. This movement has significant implications for finance and human resources
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