Editor’s note: The TLNT Radio show is a weekly podcast where we talk to the top minds in talent management. New episodes are posted here at TLNT every week. Make sure you subscribe to TLNT and get our daily newsletter for the latest, or subscribe to our podcast in iTunes to automatically get updates.
How many HR professionals think the head of HR should be reporting to a CEO instead of the CFO?
You won’t find too many folks who would say they would rather report to a CFO, yet that is what is going on in much of corporate America. It is a confusing situation because, really, what does finance have to do with human resources, anyway?
If you get beyond the politics and turf war of the whole debate (which, I assure you, is 90 percent of the issue), you would see that CFO’s don’t seem, dare I say, all too different from you and me.
The CFO of the 21st century
TLNT Editor-in-chief John Hollon and I had the opportunity to talk to Nick Araco, co-founder and CEO of The CFO Alliance, about the ever-changing roles that CFO’s are playing. We discussed the relationship between the top financial offices and human resource leaders.
“The CFO has a sense of objectivity,” said Araco. “But the decisions that they need to make around human capital have a sensitivity to them that go beyond the numbers themselves.” He credits HR with adding that level of context to discussions about strategic initiatives and problems that arise.
Araco adds, “One of the phenomenon of this downturn are the opportunities for the finance leaders to develop.”
In times of uncertainty, roles change and evolve in an organization. We’ve seen that in human resource roles as tasks that may have once fallen under a different department are suddenly thrust into HR. CFOs are feeling that same burden, especially when hit with taking a department under their wing. It is good for them, Araco says, but it’s still a work in progress.
Article Continues Below
To that point, not all CFOs are interested in overseeing HR. Araco points out, “If you asked the CFOs in our group if they would like to own the HR function versus collaborating with a strong HR leader, an overwhelming majority would choose the latter.”
Beyond the political question of whether or not HR reports to the CFO or not, there are certainly other concerns on most CFOs mind.
We asked Araco how big the concern about health care reform really is. “It’s huge,” he told us. “CFOs have taken some dramatic steps to move the ball forward on consumer-driven health care. That’s a fundamental shift in the way things are done.”
Most of the reports out have said that there has been a very conservative approach to how companies are handling the changes, but that doesn’t mean that it isn’t a big deal to a company’s top financial watchdog. For CFOs, it seems as though most of them are still in the pre-planning stages but are putting every option on the table.
Take a listen to the rest of the episode to catch the rest of the conversation.
[buzzsprout episode=”32409″ player=”true”]