By Richard Tinervin
Today's CFO is often touted as the steward of the organization's Business Intelligence, tasked with transforming enterprise data into insightful information for decision-making purposes. Now, they must bring their well-earned planning and analytical skills to bear on the most important enterprise data—human capital management.
People are the heart of a company and the most vital business asset by far, yet many of today's human capital management (HCM) technology solutions seem to miss the point—the need to be sure that employees can drive desired results aligned with corporate strategy.
Consultants bear part of the blame for this disconnection—focusing on one sphere of the organization separate from the other, in this case finance and HR, respectively. The time has come for the CFO and CHRO to collaborate on systems and processes that ensure the right people are in the right roles to empower enterprise growth, and are held accountable for their actionable decisions.
Taking Stock
The knowledge and experience to power new initiatives and operations sits inside the organization in the form of employees and, increasingly, contingent labor. Yet, few organizations have established a consolidated view of these resources. Consequently, companies are underutilizing skill sets already in place, people who have been educated about the organization's mission and operations.
The focus instead has been on recruitment—the "war for talent." Why not focus inwards to determine which skills are aplenty to undertake a fresh, new initiative, where there are voids and then determining how to fill the vacuum through targeted training? The reason is the inability to assess the human capital inventory. Small wonder there is a distinct lack of alignment between strategy and execution.
This breakdown can be healed by finance and HR working in unison to discern whether or not the company has the human capital to successfully move in stated directions. Think about it: The CEO is entrusted with developing plans for strategic growth, the CFO manages the risks these plans create and their successful execution, and the Chief HR Officer ensures that the right talent is in place to make good on the plans. If these senior executive leaders are not working in concert, the effective execution of strategic plans is jeopardized.
Not being able to quickly gauge the depth of talent within the organization is a costly failure in today's highly competitive environment. While the core administrative capabilities must be in place to manage cost and risk, effective HCM solutions must ensure that the ideas, collaboration and productivity of people are understood and aligned to accelerate performance. This requires visionary CFOs to ensure investments in HCM systems include clear objectives and solutions for addressing people management and engagement.
Unfortunately, many CFOs are provided with recommendations to invest in fragmented HCM to spot-fix a specific problem. Savvy CFOs, on the other hand, should know that effective organizations run on well-designed systems and processes supporting specific needs and addressing specific risks or other problems.
Employing Technology
Working together, the CFO and the CHRO can evaluate the organization's people management capabilities and design a system that aligns human capital with strategic objectives, thereby enabling the organization to reach a new level of strategic capability. Such systems would provide a single source of truth on the investments in people (both employees and contingent workers), the overall talent inventory and the quantitative metrics that align with strategic goals.
Many companies expect greater return on their investments in HR than they are currently yielding. According to a 2012 survey by Towers Watson of 628 large and midsize organizations, 34 percent of respondents plan to replace older HR management systems, while 29 percent expect to turn to new vendors for these implementations. The respondents stated that improvements in talent and performance should be the primary objective of an HR system. Clearly organizations expect more than just administration from their technology investment.
Identifying the right talent and nurturing these individuals to become high achievers is as vital to winning in the marketplace as having the best products, services and front office/back office technology. An HCM system that fails to enable this requirement impedes growth and jeopardizes survival.
Far too often, HCM technology solutions are made with today's needs in mind, without a plan for the long-view. Both CHROs and CFOs know that strategic needs change in response to dynamic market conditions, necessitating flexibility and future-proof functionality.
The need for organizations to excel at people management has never been greater or more pivotal. CHROs and CFOs are partnering to drive both strategy and execution of the operational and growth initiatives key to the organization's success. This partnership heralds new levels of performance and productivity as these key roles align the organization's most important form of capital—people—with its forward momentum.
Richard Tinervin is the CEO of CumulusWorld HR, a provider of comprehensive, unified and easily configurable HCM systems predicated on managing human capital first.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.