CFOs are often accused of damning HR with faint praise. And it looks like there is some truth to that. In fact, CFOs tend to be much more critical of their HR colleagues than CEOs. Just look at what the CFOs of some of the largest companies have to say about HR: 58% of the CFOs polled by the Economist Intelligence Unit believe the chief HR officers in their companies are not of the same caliber as other C-level executives and two-thirds say that these HR executives “don’t understand the business well enough.”
Fortunately for these HR executives, CEOs rate their abilities much higher, with only 22% saying HR executives are not of the same caliber as other C-level executives or “don’t understand the business well enough.” These findings are from a survey of 235 C-level executives, 43% of whom are CFOs.
This discrepancy between CEO and CFO attitudes about HR could be tied simply to the broader perspective CEOs have of the company and its needs. While CFOs naturally focus on the financial side of the business, CEOs are focused on the entire enterprise and may see the value HR brings to the table more clearly. To see how this could happen, consider this finding: While only 30% of CFOs think the head of HR is a key player in strategic planning, 55% of CEOs state that HR is indeed a key player at the strategic planning table.
The harsh perspectives CFOs have of HR can also be traced to the types of people who are drawn to work in the fields of finance and human resources. In fact, few departments are likely to be more diametrically opposed in style and objectives than finance and HR. As one survey respondent put it, “Finance people deal with the actual, things more specific, measurable and tangible. HR is more art than science, more ‘right brain’ than ‘left brain.’”
Although HR increasingly sees the need to quantify their efforts and results, there still remains a significant portion of HR that is not easily measured. While the CFO might want to reduce headcount by X in order to shore up the bottom line by a specific amount, HR may push back on that suggestion by citing less tangible reasons, such as loss of morale or an inability to meet longer-term goals.
There is some good news in these findings. CFOs actually want to work more closely with HR and to have HR more involved in strategic planning and other matters. One CFO who was interviewed for the survey noted how he and the head of HR in his company had worked closely to guide the company’s expansion into Asia: “We had to recruit and retain large numbers of people in China and India, integrating the new operations into our organization while still perpetuating our company culture, all within agreed financial parameters.”
That scenario just about sums up why it is necessary for CFOs and HR to find common ground in their work. In this increasingly global and highly competitive economy, companies need every advantage they can get—even if that requires CFOs and HR leaders to find new ways to work well together.