Survey Finds That CFOs Are Delving More Into Other Areas – Especially HR

Here’s a report guaranteed to give any self-respecting HR professional a good case of heartburn: according to a new Robert Half Management Resources Survey, senior financial executives are extending their reach into a lot of other areas of the business — especially HR.

According to the survey of chief financial officers, more than one in four (27 percent) of the CFOs interviewed said they have become more involved in company operations over the past three years. Human resources was the second most common area of expanded responsibility and was cited by 19 percent of respondents.

The survey was developed by Robert Half Management Resources, a provider of senior-level accounting and finance professionals on a project and interim basis. It was conducted by an independent research firm and includes responses from 1,400 CFOs from a stratified random sample of U.S. companies with 20 or more employees.

“Financial leaders are becoming more involved”

CFOs were asked, “Which one of the following areas outside of traditional accounting and finance responsibilities, if any, has your role expanded into most over the past three years?” Their responses:

  • Operations — 27 percent;
  • Human resources — 19 percent;
  • Marketing — 17 percent;
  • Information technology — 15 percent;
  • Sales/business development — 6 percent;
  • None/role hasn’t changed — 15 percent;
  • Don’t know — 1 percent.

“Financial leaders are becoming more involved in all aspects of company operations, often to ensure greater financial controls across the enterprise and offer input on pricing, cost cutting and business restructuring,” said Paul McDonald, senior executive director of Robert Half Management Resources, in a press release about the survey.”Keeping costs in check and nurturing revenue streams are more important than ever in today’s business climate.”

McDonald added, “Financial professionals who want to advance in the organization should demonstrate a robust skill set.” He advised those with leadership aspirations to look for opportunities to build their expertise outside of accounting and finance, such as by volunteering for cross-functional project teams, to gain broader exposure to the business.”

A lack of regard for HR?

That’s all well and good, but the fact that more CFOs are expanding into their organization’s HR operation is not something to point to with pride. Quite the opposite, in fact.

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When HR reports to the CFO rather than, say, the CEO, president, or executive vice president, it tells you that the organization really doesn’t have a great deal of regard for the the HR and people management operation.

Former General Electric CEO Jack Welch, a guy who knows a lot about how to run a company, frequently makes the point (as he did in 2009 at SHRM New Orleans) that the top HR leader in an organization should have equal status to the CFO, and that more organizations need to push for HR-CFO equality.

Still, I’m not terribly surprised by the Robert Half survey any more than I am by the fact that the new chief executive and leader of the world’s largest HR organization is not a human resources professional but instead is, of course, a CFO. Or as HR professional Kris Dunn put it, “What does this say about (SHRM) when the Board and Korn-Ferry cannot find a human resource professional to serve as CEO out of one-quarter million SHRM members?”

That’s a good question, but as the Robert Half survey suggests, having the CFO get more involved in an organization’s HR operations is simply another sign of our turbulent times — no matter what the business is.

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.

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7 Comments on “Survey Finds That CFOs Are Delving More Into Other Areas – Especially HR

  1. John,

    Thank you for sharing your thoughts on this important subject.

    I am in a fortunate situation to work directly with CFOs dealing with their Talent issues, as well as being in the business of helping companies hire CFOs.

    In a recent survey, we asked CFOs about their relationship with HR. I certainly understand your point of view. Some of the comments CFOs had about HR may be a bit too candid.

    You can read the last blog in the series here http://bit.ly/nNfP7l 

    Let’s keep the conversation going about CFOs and HR.

    Samuel Dergel, CPA, CA, CPC
    Dergel CFO Search & Consulting
    http://blog.dergelcfo.com

    1. Samuel: I appreciate the comment, and please know that I have worked with some great CFOs in my career — people who were not only highly skilled but who also helped me tremendously.

      Having said that however, I’m with Jack Welch on this one. Having the HR leadership report to the CEO trivializes the people management component of an organization. If people really are “our most important asset,” as you hear all too many executives say, then the  head of the people function should be reporting in a direct line to the head of the organization and NOT through a CFO or anyone else.  

      1. John

        I’m certainly not against HR reporting to the CEO. When the CEO understands the value of HR, HR usually reports to the CEO. In many cases where HR reports to the CFO, it is because the CEO doesn’t see the value in having a HR reporting directly to him or her.

        Paul’s comment here is in line with my thinking.

        HR & Finance need to work together to benefit the company. What my survey showed is that CFOs don’t like HR much. It is incumbent upon the leaders in Finance and HR to find a way to work together to best serve the company. In a progressive company, the leaders in Finance and HR will make this a priority.

        The more we talk about the disconnect between HR and Finance, maybe CFOs and HR will find the way to work better together.

        Samuel

  2. John, 
    This is an interesting and for many people not surprising finding. I think it is good news that CFO’s turn more attention to HR: most CFO’s need to understand that function better. Are people a cost or a productive investment? If really the former, why are downsizings so common even in highly profitable companies?

    It would also be a good idea for HR Directors to spend more time on finance. As many people have observed, HR needs to get closer to the business imperatives. And HR needs to be sure that initiatives have a strong ROI.  HRD’s should be excited about extra attention from the CFO. Are they, I wonder?

  3. I think that what this trend also points out is that CFOs generally are in the best position to understand the cost of human capital and the need to maximize the value of HR. I understand the concept of HR equality discussed in the article, but as someone who has spent his life working with entrepreneurs in companies ranging from start-ups to $100 million in revenues, most of these entrepreneurs are vision- focused. Entrepreneurial CFOs are generally highly involved in HR, Legal, and Ops because we are the ones charged with making the vision work. As such we know the value of a strong, efficient HR function; and with the overlap in payroll and benefits, often the best advocate that HR can have in the company.

  4. I’m curious if CFOs are moving into the HR space because they want to or because they feel the need to.   Maybe it’s just a good old fashioned power grab and HR is the easiest department to take over.  But I’d guess that a CFO who feels that HR is already doing a brilliant job would have little interest in rolling in the tanks . . .

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