At Planful, when we talk with our customers about finance transformation we hear clear goals and talk of compressing cycle times and raising the financial IQ in every corner of the business. But when we listen to Human Resources leaders talk about transformation of their domain, the outcomes usually aren’t as defined.
Why is that? Let’s dig into HR transformation and uncover why it matters and how to take your team from being seen as a service desk (Payroll questions? New employee onboarding tasks?) to a strategic advisor to the business.
Transform HR into a Strategic Asset
When teams talk about transformation, it’s usually in the context of digitization. While that’s critical for speed and efficiency these days, that’s not enough of an end goal to rally support from the c-suite. The CFO especially wants to know the costs and the benefits of any transformation initiative. For Sales, Marketing, Operations, and other revenue- or cost-driving teams, it’s easy to quantify an investment. Add 2 new sales reps, increase revenue by X. Automate a production process, cut costs by Y. The ROI calculation is easy.
But for HR, it’s hard to quantify the benefits of our more strategic initiatives.
I’ve been in HR for over a decade, and I’ve worked with Finance again and again, partnering to get their support to invest in HR initiatives like company culture, adding programs to harness and cultivate promising talent, expanding coaching and training capabilities, or enhancing employee wellbeing.
It’s a struggle because business leaders can’t instantly see the value in these moves, which supports the view (at some companies) that employee training, career progression and wellness leads to long term employee retention, but may not translate into improved productivity or revenue. I didn’t have the time to focus on HR strategy because I was constantly in a reactive mode. I was stuck focusing only on HR issues while the CEO and CFO were focused on growth, costs, and ROI. I wasn’t speaking their language.
The primary goal of HR transformation, then, needs to be elevating HR to be recognized as a strategic asset for the business. But to do so, you, as an HR leader, need to speak the language of Finance. That is, costs, benefits, and ROI.
Speed and Efficiency are Key… and Quantifiable
When you’re in a reactive, fire-fighting mode, it’s natural to become subservient to the business. It doesn’t matter if you’re in HR or any other role. If you don’t have the time to rise above the tactical noise, you’re left to just react. The business needs 3 manager roles filled, so you set off to fill them. There’s no time to think about building career tracks, improving employee experience, optimizing your span of control.
Efficiency, and the resulting agility, gets you out of reactive mode and gives you time to think. Specifically, you want to digitize paper-based processes, automate simple but manual processes, and get ahead of the busy work that sucks up your time. It also accelerates cycle times, so recruiting for a new role can start in 3 days instead of 3 weeks, for example. Speed is a tangible benefit, and both Finance and the business can see the value in that. Efficiency comes from HR transformation. But transformation drives so much more than just efficiency.
Digitization Drives Intelligence
Begin by collecting your HRIS, compensation, benefits, and other HR systems’ data into a single place for planning and budgeting. From there, you can easily break down the business silos to incorporate operational, financial, and other business data.
Automating these data integrations removes the friction of manual data collection. Better yet, it opens up whole new worlds of analysis, scenario planning, and reporting based on accurate, instant, and comprehensive data. You’re no longer limited to just HR data stuck in a disconnected spreadsheet. Instead, it increases the accuracy of your numbers and gives perspective to your work in the context of strategic company priorities.
Now you’ve armed yourself with more complete information to weave a better story for Finance as you explain your needs, detail the costs and benefits, and show the expected business outcomes. You’re empowered to put a tangible value on an unfilled role, show the budget impact of termination and severance versus coaching, or explain the cost disparities between recruiting for a new role or promoting from within.
For Finance, the real value of your insights is the lack of surprises, and crystal clear visibility into how the investment in a strategic workforce translates to the company’s financial performance. When you have complete and accurate data, and real-time, collaborative planning tools, then you’ll be able to prepare Finance for different scenarios and different costs well before they happen.
Better HR, Better People, Better Business
Hopefully now you’re sold on HR transformation because it gives you more time and more intelligence to finally become a strategic asset to your company. Finance is coming around because they see the value in understanding HR’s needs in the language of costs, benefits, and ROI. But wait, there’s more!
When you have the time to take a strategic view of HR, and Finance understands the justification for investing in HR and people, you’ll then — finally — have the power to build an organization that’s much more attractive to top talent. You’ll be able to invest in programs that keep top performers from leaving, that build fulfilling careers, and that create an inclusive culture that enhances your employee experience.
There’s been a lot of research on the ingredients companies need to add to help their people, and their business, shine. Google points to effective managers, Accenture says to address fundamental needs, PwC worked with University of Southern California to identify what makes people their best selves.
Transformation gives you the time to investigate those types of strategic moves, and to get Finance and the c-suite to support them based on real benefits. So what are you waiting for? Find out how Planful can help transform HR and workforce planning into a strategic asset to the business. Connect with Planful this week at HR Tech—schedule a meeting with us here.