Reconciling Finance with HR
Well-functioning and successful companies rely on qualified employees to realise their full potential in a highly competitive market. There is plenty of talent out there – but attracting and retaining it is difficult. Faced with the pressure to grow, organisations need to consider and plan for several variables that influence (and sometimes complicate) effective recruitment.
In this ever-changing economic environment, integrated business planning (IBP) is becoming increasingly important. All relevant data from finance, human resources (HR) and sales are brought together centrally on a single platform, enabling well-founded planning. Workforce management and planning are an essential part of integrated corporate planning. Companies can create realistic budget plans based on historical data and thus recruit, retain and train promising teams. The pandemic has not only fundamentally changed working models – the employee lifecycle has also evolved and is more digital and dynamic than ever before.
At first glance, the impression is that HR teams (responsible for recruitment) and finance teams (responsible for staff remuneration) are solely responsible for personnel planning. However, this is not entirely true. Other stakeholders – business and department heads to be precise – are also involved. Their goals and obstacles also have an impact on the planning process from a strategic perspective.
And how do you get all stakeholders to pull in the same direction?
The first step is to bring all the data together on a central platform that everyone can access.
A lack of data drives a wedge between finance and HR teams. This in turn slows down or even prevents the hiring process – resulting in the organisation missing out on key workers. In addition, organisations are required to keep HR and financial data separate to ensure data privacy and confidentiality, making efficient and effective hiring decisions much more difficult. Furthermore, compensation, training, benefits and other offerings can vary greatly from region to region and between individual employees. These figures must be derived from the overall sales figures and automatically taken into account – an additional burden for finance teams.
The COVID-19 pandemic has had a lasting impact on the traditional employee life cycle. It has also led to a new and important collaboration between the finance and HR departments, which work together to look after the company’s finances and employees.
With the help of a planning and performance management platform, companies can develop a holistic HR plan that incorporates the requirements of the four most important stakeholders (management, department heads, HR and finance departments).
Equipped with the plans of the specialist departments, the HR department can start the HR planning process with confidence. They start with the review and then add the department-specific contributions to the personnel budget, including company-wide and department-specific training. At this stage, the HR department uses its expertise to fulfil all important financial and HR tasks.
HR determines salaries, variable compensation and benefits for each function based on external industry data (although these values vary by region as well as seniority, education and other factors). Next, HR determines the costs for the entire employee lifecycle, including training, retention and termination costs. HR provides this information to the finance teams via a common planning and performance management platform.
Long-term value can be created through standardised and strategic workforce planning. Organisations are equipped with processes and tools that give them a competitive advantage in terms of talent, growth, innovation and the ability to raise and deploy capital. Strategic workforce planning begins with an assessment of the current workforce.
And find out more about standardised personnel planning:
Jedox is the world’s most customisable business planning and performance management platform, enabling companies to create business plans that exceed past results and expectations. More than 2,500 companies in 140 countries rely on Jedox to model any scenario, integrate data from multiple sources and simplify planning across the organisation and across systems. Jedox creates an environment where teams collaborate better, respond faster to change, make more informed decisions and realise previously unrecognised opportunities.
