Partnering for performance

In most companies, people are the single largest expense. In fact, total human capital costs average nearly 70 per cent of operating expenses. But unlike the physical assets that chief financial officers (CFOs) have long measured and managed, people are difficult to control and predict. While the CFO allocates the resources required to deliver the company's strategy, the chief human resources officer (CHRO) ensures the right people are in the right job at the right time, with the right support. However, in recent years, the gap between finance and HR has narrowed. Eighty per cent of the CFOs and CHROs that were surveyed for the EY global study, Partnering for Growth, said their relationship has become more collaborative. The high cost and scarcity of talent top the list of factors driving the need for a closer relationship. Changes to strategy, operating model, and products and services are also prompting CFOs and CHROs to work more closely.The study finds a strong link between CFOs' level of involvement in strategic workforce planning and the broader performance of the business. Companies where the relationship between CFO and CHRO has become much more collaborative over the past three years report average higher EBITDA growth and stronger improvement across a range of human capital metrics, including employee engagement and productivity.