The CIMA and the Chartered Institute of Personnel and Development (CIPD) recently announced a major new strategic collaboration to foster closer working links between the Finance and HR professions. This is a very timely move to bring about the synergistic results between the financial and HR experts, in an era where many organisations are facing a dilemma on striving to strike the right balance between financial and human resources. In this backdrop, it is worth highlighting the stance of the above two professional bodies on the importance of finance and HR aspects of business:
Charles Tilley, Chief Executive –
CIMA:
“By working together, we hope to show that accurate and relevant reporting on an organization’s people, as well as on its financials, provides real insight into the true health of the business, on which sound investment decisions can be made.”

Peter Cheese, Chief Executive – CIPD:
“Our collaboration with CIMA will help us build hard metrics for what is often seen as the “soft” contribution people and culture make to organizational value.”
For many years both Finance and HR professions have strived to make its mark in the business pinnacle. Gone are the days where HR was considered as a back office and mundane task which was confined to staff administration and welfare activities. Presently, there is ample research to show that HR is considered as one of the important function in similar to other functions such as Finance, Marketing, IT, etc. Moreover, many business professionals recognize HR as CEO’s consultant as they have the innate skills and knowledge to manage an organization’s most valuable asset: people.
However, in light of the above paradigm shift of HR profession, it is important to address the tension that exists between the Finance and HR functions within an organization. This may be due to the fact that Finance Departments usually focus on managing cost to increase profitability and consider HR as a cost factor, as majority of an organization’s cost is on payroll and staff related expenses. However, HR considers that people are the most valuable asset for an organization and would propagate staff related costs as an investment (training and development, improving staff welfare and benefits, etc.). Inevitably, often staff related costs are considered as an unwanted expense by CFOs. Hence, it is not surprising to find CFOs who are usually rejecting HR functions budget proposals for staff training and welfare, and meetings on these aspects becomes CFOs worst nightmares to control cost and to maintain profitability.
In many organizations, there is a silent friction between the HR and Finance functions but, if both professions could look at the synergistic result in similar to how CIMA and CIPD has strategically collaborated, which would leverage on each other’s strengths and compensate for their weaknesses, the organization as whole could benefit at a larger extent when compared to organizations where the HR and Finance functions work in silos and warring with each other to meet their own functional targets. It is because both professions tend to manage the organizations core areas which are required for its survival: profitability and people. An organization’s people are the backbone to ensure profitability for its survival. For an instance, a company may have the best processes and cost control techniques to increase profitability however; if the employees are frustrated, dislocated, and lethargic then it is highly unlikely that an organization can sustain its profitability and growth momentum.
Thus, CFOs could benefit immensely from their HR counterparts on following aspects: HR professionals are experts in identifying the right person at the right time for the right job. HR function is also an expert in ensuring the organization’s HR processes are in a manner in which it brands the organization as an ‘employer of choice’. Moreover, in the present competitive era where a ‘war for talent’ exist like never before, HR professionals also strive to build a strong Employee Value Propositions (EVP) which refers to the total employment experience offered by the organization in exchange for the productivity and performance of an employee (from the organization’s mission, purpose, values, reputation, culture, people, training and development, relationships with superiors and team and total rewards strategy). HR believes that an effective EVP would attract the right talent and drive robust performance in middle of rampant competition.
Considering the above core strengths of the HR function, CFOs should work in line with HR in how to equip the organization with the right EVP and talent to reach its profitability goals. Further, as the Finance professionals are experts on cost control, they should be giving their input in how the right ingredients are mixed at minimum cost whilst ensuring quality, in order to build a strong EVP for the organization. Moreover, as most of the HR professionals are criticized for having lack of financial expertise in understanding the ‘numbers’ of business and not being able to reflect HR’s value in metrics, Finance professionals could also train their HR counterparts on basic financial metrics which would enable them to add more value to every penny in which the organization invests on people.
Therefore, HR could be useful to build a robust EVP that would attract, retain and motivate the right talent at the right time for the right job which could ensure profitability of the organization and meet the objectives of the CFOs and finally, achieve the overall objective of the organization. Hence, more avenues should be identified in how HR and Finance can be linked together to bring about more innovative ways of improving organization’s true health and value. The strategic collaboration between CIMA and CIPD is surely a major stepping stone for HR and Finance functions to coexist.
(The writer is an Associate HR Consultant at HR Cornucopia, the local arm of HR Cornucopia India. She can be reached at sonia.chinnaiyah@gmail.com).