A special union was celebrated in London recently. Invited guests witnessed two partners "tie the knot." Speeches praised the couple’s future partnership and prosperity. Special guests were seated at a top table. A real-life vicar was on hand to preside over the union. And it all took place on Valentine’s Day. Love was definitely in the air.
So what on earth was going on?
This was "The Union of Finance and HR," an interactive event that brought together senior Finance and HR professionals to discuss why now, more than ever, Finance and HR need to collaborate across all aspects of corporate processes, reporting, systems, and strategy.
Organised by Oracle and featuring expert speakers from Finance, HR, and business academia, the event celebrated how this unified relationship gives organisations the visibility to make faster, more informed decisions, adapt quickly to market opportunities, and grow.
And the real-life vicar officiating over this unique union? That was TV broadcaster and vicar of a Northamptonshire village, Reverend Richard Coles. Opening the proceedings, he commented, “Dearly beloved, we are gathered here today to witness the possible union of Finance and HR. You will be the arbiter of that as each of the disciplines sets out what they hope to achieve from this union.”
Finance was the first to argue the case for collaboration. Peter Simons is Head of the Future of Finance Research at CIMA, the world’s largest professional body of management accountants. He began by asking the audience to describe their Finance or HR counterpart in one word, via an interactive app. Words ranged from "collaborative" and "good" to "distant" and "complicated."
“Organisations are increasingly congregating around similar operational processes, and in the future, intangible factors—especially people—will separate success from failure,” Peter explained. “The challenge is to bring Finance and HR closer together. While there is a huge amount of mutual respect between both parties, it sometimes feels that one is from Mars, the other from Venus.”
Peter also acknowledged that Finance has long been the dominant partner in the relationship—but that is changing. “Together both disciplines can be a powerful force. Look in any corporate financial report, for example, and what strikes you is the focus on diversity reporting, the gender pay gap, emoluments, and other people data. Those measures are all driven by data shared between Finance and HR.”
This theme was echoed by Andrea Eccles, Chief Executive of the City HR Association, a professional association for HR practitioners. “People metrics have a powerful impact on the balance sheet, profit and loss account, and corporate governance,” she said. “Boards and ExCos increasingly rely on HR for data to support business decision making.
“In terms of the annual report, data such as board emoluments or narratives such as diversity and inclusion targets are a key feature of UK—and wider—company reporting, whilst people related costs form a substantial part of the budget. Some HR analytics are also of interest externally and can influence investment decisions. These include a firm’s diversity strategy, their pension funding, labour relations, and the quality of leadership, to name a few.”
People metrics can also enhance organisational performance. Citing joint research by Oracle and the CGMA, Andrea noted that five of the nine key performance indicators (KPIs) that drive business performance are HR-related. These include employee productivity, employee engagement, talent sourcing and pipeline, the customer experience, and brand equity.
Andrea validated this with a case study from the financial services front-line. “Metro Bank’s HR professionals are working with their Finance counterparts every day across a wide range of reporting, budgeting, and other fiscal processes. They also have a similar relationship with Risk and Compliance to optimise board decision-making,” she said.
Andrea then presented results from City HR’s 2016 Benchmarking Survey, showing that 65% of organisations now have HR leaders on their board or executive committee. Ten years ago, that figure was only 37%. Some 80% of organisations within the survey also now believe the HR function is gaining greater internal prominence.
Given that this "Union of Finance and HR" event was taking place on Valentine’s Day, Andrea closed with some apt verse: “Roses are red / violets are blue / collaboration and technology will make us the dynamic duo.” Andrea has not applied to be the next Poet Laureate.
André Spicer, Professor of Organisational Behaviour at the Cass Business School, took an altogether different angle on unified Finance and HR collaboration. He firstly acknowledged that silos still exist between both sides, but this can be overcome. “Organisations need to take an active role in collaboration—for example, by circulating new Finance recruits into HR and vice versa, or by forming cross-disciplinary teams to reduce the barriers to working together.”
Drawing on the union and partnership theme, André also presented a series of behavioural factors that make a successful marriage—and how these can be translated into business. For example, partners (in marriage and business) need to learn to fight well. “Discord happens in every relationship, but when it does, take the steps to de-escalate it quickly,” said André. “Successful relationships also follow a 5:1 mantra—five successful interactions for one negative one. In business, focus on those positive interactions and become a support for other functions.”
With that, the guests departed.
The message they took with them? Every business is intimately connected today. And no two back office functions are as connected as Finance and HR. With work from both sides, it can become the ultimate strategic partnership.