Today’s talent economy is evolving faster than ever before with new generations entering the workforce and emerging technology driving growth across nearly every industry. In order to remain competitive, businesses need to streamline internal collaboration and improve efficiencies to achieve success. One great place to start is with HR and finance.
Business leaders are looking for HR and finance to come together to provide insights that drive better decision making for the organization overall. In a recent Oracle study, we examined the current state of data and analytics collaboration between HR and finance teams. According to the report, 88% of HR and finance professionals agree that data-driven collaboration will improve business performance and 95% are making it a priority in 2019. While this doesn’t come without its challenges, an integrated HR-finance approach to business will unlock significant opportunities.
Business Benefits of a Joint-Analytics Strategy
When HR and finance departments work in silos, they may have multiple versions of the truth when it comes to data and analytics. Even data as seemingly simple as employee headcount can have disparities across departments. But when both teams are able to partner together, they benefit from achieving one single source of truth and a common approach to framing analytical questions. This enables both teams to deliver a consistent, 360-degree view of metrics to business leaders and have a stronger, more cohesive set of analytics to make data-based decisions.
Additionally, an integrated analytics strategy across HR and finance will better equip both teams to tackle initiatives that have dual talent and finance strategies at play. Take workforce planning for example: When determining how to grow and develop an organization’s workforce, a joint HR and finance strategy is key. With this, finance and HR departments can partner to achieve a complete understanding of what kind of talent, what types of roles and how many new employees the business needs or is able to acquire. The HR team will be able to bring a perspective of where and how to source this new talent, while the finance team can determine key expense metrics such as how many new hires the business can afford.
Lastly, through an integrated approach to data, HR and finance teams will both benefit from each other by acquiring new skill sets and strengths from respective teams. The study found that while both HR and finance need to improve skills on translating data into actionable decisions, the two teams are committed to making it a business priority in the next year. HR teams will also be able to learn from finance how to tell an effective story with data, while finance teams will be able to leverage HR’s business relationships to tell their data story in a meaningful way to key stakeholders.
Breaking the Barriers to Collaboration
In order to achieve an integrated analytics approach to HR and finance, both teams will need to overcome barriers. According to the report, HR and finance teams cited short-term mindsets (71%), mismatched skills (64%), and cultural habits (60%) as the biggest hurdles to collaboration. In order to overcome these barriers, both teams need to learn how to speak the same business language. While we found that HR teams are already leveraging analytics, the next step is to translate the data beyond its standard references of retention, engagement, etc. into financial implications that relate directly to business impact.
For instance, being able to say a 1% increase in engagement in a unit results in $250k more profit, will resonate with business leaders across the board. Once HR is able to translate talent strategy into business strategy, the HR and finance teams will be able to more seamlessly work together in ways that drive better business results.
Get Started by Starting Small
Overall, once organizations are able to overcome the collaboration barriers and develop a joint HR-finance strategy based on data and analytics, the business opportunities will be endless. To get started, we recommend beginning small and finding one or two opportunistic moments for collaboration. For an HR practitioner, we suggest connecting with a like-minded colleague in the finance department who is similarly interested in collaborating on analytics. From there, you’ll be able to build a bigger and stronger foundation to scale across both departments.