Today’s CFO is keenly aware that an organization’s employees are its most valuable asset. Measuring performance from a human capital perspective is often times housed in a separate system versus that which measures overall financial performance of an organization. These disparate systems make it virtually impossible for finance leaders to gain clear and deep insight across the organization to make sound business decisions which will yield the strongest results. As the market for hiring and retaining talent becomes increasingly competitive, it is paramount for a CFO to have the ability to measure and quantify the value of talent in their organization. A recent CFO.com whitepaper states, “Taking steps to connect finance, HR and business priorities can lead to striking improvements that facilitate competitiveness and bolster business results by effectively using human capital.”
In today’s complex business climate, organizations should track and measure the financial consequences of hiring, turnover, workforce planning etc., in a unified manner, as doing so yields countless benefits. Integrating processes and systems for goal-setting and compensation with financial processes enables analysis and allows financial leaders to improve operations and performance.
The CFO is uniquely positioned to unify capital management and finance, thus enabling the necessary collaboration between their organization and human resources. According to the whitepaper, “Finance playing a role in improving compensation in 31 percent of participating organizations and facilitating access to information in 23 percent.” As such, comprehensive and detailed analysis helps guide how to best leverage human capital and can become a continued part of a CFO’s efforts.
Building a credible business case in such unified systems must make compelling financial sense, and must be clearly tied back to bottom-line contributions of increased productivity. Yet, according to the whitepaper, “Finding the budget for investments in new applications is a challenge for nearly two-thirds (63 percent) of organizations.” The goal is to demonstrate that having easy access to detailed and comprehensive information frees employees to focus on activities garner productivity, thus highlighting the anticipated return on investment. Not only is there a monetary value for the time saved, but a more engaged workforce is significantly easier to retain.
Disconnects between major sections of an organization are costly and breaking down the system silos allows for greater access to information in a more timely manner. All of these efforts empower the CFO to make more strategic planning decisions that will lead to greater profitability for the organization.
Want to share how your thoughts on the value of human capital for finance professionals? Comment below!