Nothing is more valuable to an organization than the people who run things day in and day out. But people also are the most complex and expensive asset an organization will invest in, so it’s essential that finance and human resources (HR) collaborate on workforce strategy and planning.
This alignment is even more important now that more companies are using advanced analytics. Without solid alignment, companies won’t fully benefit from their investment in analytics tools, and predictive and prescriptive modeling won’t be as effective.
What can finance leaders do to improve alignment with HR? An Oracle study of 1,510 HR and finance executives found two problems to be widespread: skills gaps, and misaligned perceptions and priorities. Improvement in these areas will help clear the way for better collaboration between finance and HR.
More than 60 percent of respondents said a lack of skills and talent was a top barrier to analytics collaboration. The first place to look to see if this is true for your organization is the types of tools people are using for analysis. How are the tools affecting data quality?
Cloud-based business intelligence (BI)/analytics software was the No. 1 tool choice, but the second highest-ranking answer was Excel spreadsheets. Respondents said they find spreadsheets easy to develop and use, but spreadsheets are notoriously inaccurate, inconsistent, and insecure, leading to problems with mismatched and untrustworthy data. They leave organizations vulnerable and don’t provide the most current best practices in analytics, as cloud-based solutions do.
This widespread use of spreadsheets likely contributes to the top HR skills gaps cited in the survey: acting on data and analytics to solve issues; cultivating quantitative analysis and reasoning skills; and advising business leaders by telling a story with data.
Eliminating spreadsheets and standardizing on cloud-based analytics tools will help close these gaps because people will have access to easy-to-use and always-up-to-date analytics tools, and HR and finance applications will use the same data. Data quality improves, errors decline, and friction from using mismatched tools and databases goes away.
Analytics are gaining ground in HR. Organizations are managing talent pipelines, predicting attrition, and selecting talented recruits from resumé analysis. This is good news, but half of organizations are not yet using predictive and prescriptive analytics, leaving plenty of room to expand into more advanced analytical approaches.
This won’t happen without widespread support and buy-in. Finance leaders who want to improve workforce analytics capabilities need to start at the top, according to survey findings.
A short-term management philosophy—focusing on quarters instead of a strategic direction—was cited as a top barrier to better collaboration by 70 percent of survey respondents. Clearly, they don’t feel supported by their leaders, and this points to an opportunity for finance and HR leaders to educate other leaders about the value of better collaborative planning.
Another opportunity to raise awareness is in basic analytics maturity and capabilities. These vary, so having a common understanding and language is important because not all decision-makers will be users. One survey finding that validates the need for a common understanding: Owners and CEOs/presidents/chairs are most optimistic that their teams will be highly skilled in using data to determine workforce needs in the next 12 months, but vice presidents, executive management, and department heads are less optimistic.
Finance and HR groups clearly are planning to be more collaborative; more than 80 percent of surveyed leaders said this is a top priority. To get to their goal, finance and HR leaders will need to address the challenges we’ve discussed.
There is a substantial prize: 88 percent of respondents said improving business performance is the top benefit of the two groups working together with shared analytics.
The urgency is clear in the survey findings: To get the most value from data, analytics, and—most importantly—talent resources, organizations should work to improve collaboration between HR and finance.