THE COVETED TRIO – CHRO, CEO & CFO | Aparna Sharma | Consulting Editor | The People Management

Historically, an HR profile was considered a core people profile rather than a business profile. People mainly would tag a CEO to business, a CFO to financial stability, and a CHRO to employee management without creating an essential link between the three. Conceptually, 60 % of these profiles run in their own space without many interdependencies for most of us. For leaders, HR would either be a source of data or a team that handles all transactional processes to maintain the employee life cycle. The said perspective won’t change unless the CEO, CFO and the CHRO share and co-own some part of their respective spheres. If these three are aptly aligned, most strategies and initiatives will be more effective and progressive.

In recent times, the C-suite has evolved to include a variety of partners working at the highest levels to improve their organization. The CEO defines and articulates the company strategy. The chief financial officer (CFO) oversees the financial capital and resources to ensure that strategy can be funded profitably. And, the CHRO is on board to translate the strategy to internal and external stakeholders through people and change management.

Delivering on the CHRO mandate requires an integrated approach and close relationships, especially with the CEO & CFO.

HR Leaders need –

1. A Plan for Proactivity
The CHRO is responsible for all of the organization’s talent, and proactive planning can make it easier for them to manage workforce concerns.

A plan to automate routine HR functions and use of Artificial Intelligence (AI) in recruitment can help. This ensures that your best talent is available to respond to immediate concerns.

2. A Share of Needed Resources
CFOs know how to manage budgets, but they may not have experience allocating HR resources beyond hiring. The CHRO needs to be prepared to ask for the technology investments they need, as well.

3. The Power to Take Charge
Leadership partners often want CHROs to take charge and secure what they need to improve the workforce. The difference between a CHRO and an HR manager is the ability for the CHRO to implement change as needed to improve the organization, without always securing permission beforehand.

The Benefits of Collaboration
Modern business challenges require modern and innovative solutions. Getting the people responsible for the company’s finances and workforce working together is one of the best ways to quickly identify business challenges and create effective and non-traditional solutions.

Working together directly connects human performance with business success, adding objectivity to the analysis of human resource initiatives and its impact on company financials.

Collaboration between CFOs and CHROs is especially important right now, with changing market and workforce dynamics. The business world is still adapting to the lingering effects of recession as well as the stimulating and disruptive influence of startups and tech giants alike. At the same time, Millennials are poised to make up 75% of the workforce by 2025, which means that companies are having to engage and retain Millennial talent. Linking the management of people and finances allows companies to be more agile and responsive to these challenges.

Across the board many of the main challenges that businesses have faced in recent years have been related to talent. Acquisition and retention of all talent, but especially Gen Y and Gen X talent, has become a major focus for not only HR professionals but companies as a whole. It seems natural, therefore, for modern CFOs to build a strong relationship with their HR counterparts in order to tackle this major financial hurdle.

A closer relationship between CFO and CHRO can boost virtually every part of their respective responsibilities, as well as the organization as a whole. That adds up to a real impact for a business’s bottom-line. So much so that companies with a high level of collaboration between HR and Finance see an increase in top-line revenue, an increase of 10% or more in operational cash flow, and an increase in employee performance and engagement. That’s great news for CFOs and CHROs alike!

Deriving Shared Meaning

Managing human capital is one of the top challenges for Organisations today. The objective of every move should be meaningfully derived and communicated to the stakeholders. The CEO and CHRO must unite to ensure a successful journey through and with people.

We have all heard about the transformational journey of HR from transactional to business partner to strategic partner. Their best capacity got further enhanced by getting an opportunity to recreate their role and play a critical part in the upper echelons of the company structure, where CEOs partner with the CHROs rather than treating them as a window to pass on data and information. The role of HR has become more than just the defined hierarchical position.

All Organisations talk about ROI on employee engagement and other human capital-related strategies. However, the essential question is how open are we to understanding and including HR as part of revenue, margin, rate card, resource utilization percentage, and other people-business-centric data points? Organisations believe in devising a “Resource Management Group” that works with the CTO of the company. Past facts show that either management didn’t consider that HR could do more than core HR or HR chiefs never really considered exploring the other side of the table. Whatever the reason was, it kept business numbers delinked from people analytics.

Now that the world has accepted that if not “employees first,” it can’t be second or last either; it has to be as important as client or business. Business, client, and culture are created and maintained by people; they must feel valued, and the keepers (People managers and HR) must feel heard. When they are all actually part of the same game, the same team, playing on a shared playground with the same and shared rules, it becomes so simple to decode and emphasize that they are playing with and for each other and not otherwise. That’s the magic of co-ownership.

The power of coexistence and collaboration is known to all. We all know that “When it’s shared, it can be seen and heard. And when it can be seen and heard, it can be trusted.” Similarly, when told, it can be executed; when included, it can be co-owned. Have you heard of “Think like a CEO before acting like a CHRO” and vice versa? My question is, why think when you can actually discuss and work together.

Let’s GATHER them ALL, TOGETHER to tango.