Success in business is, ultimately, a game of collaboration. Collaboration often trumps competition when thinking about critical factors in success across business timelines, whether growth and scaling or maintaining course during difficult economic events.
Of course, internal collaboration between departments is something other than something a business should aspire to; rather, it is a functional necessity of any practising organisation. But there are some critical collaborative relationships within a business that are more important to actively cultivate than others – one of which is the interrelationship between HR and Accounts.
An Essential Collaboration
In a nutshell, the human resources department’s remit is heavily influenced by the reporting and analysis provided by Accounts. Here, we will examine some of the significant ways in which the two departments work in concert – from recruitment to reporting and beyond.
One of HR’s major responsibilities is recruitment. Knowing when to hire staff, how many to hire and which levels of staff to hire requires wide-ranging knowledge and input from different departments. A key element of that decision-making is budget – which accounting departments are best poised to provide.
Close liaison between accounts and HR means that HR teams can more effectively institute recruiting drives for relevant, high-quality applicants according to immediate or upcoming financial availability.
The knowledge that financial reporting provides extends far beyond the basics of budgeting for new hires. Accurate financial reporting from accountancy services, such as GAAP reporting in compliance with IFRS, gives a comprehensive picture of a business’s health – with important ramifications for HR department focus.
As an example, the numbers point to a period of stunted business growth, whether through negative cash flow or general spending downtrends. Having a unique advanced glance at this information allows HR to pivot more readily away from hiring and towards employee retention as a priority.
Speaking of employee retention, HR’s main purpose as a protector of company interests heavily informs its more direct and tangible forms of responsibility to staff. Again, access to information from the accounts department regarding budget availability and future earnings can give HR the ammunition necessary to institute specific rewards or benefits programmes based on employee performance.
In a more immediate sense, sales and revenue data from the last financial quarter would be necessary for HR to receive in order to properly consider the administration of bonuses to sales and marketing staff. In a less direct sense, HR may be considering small perks to drive employee morale during difficult times – necessitating access to cashflow data to determine the feasibility of non-essential expenditure.
Mention has been made of forecasting already, but this accounting exercise is truly vital to the relationship between HR and accounting teams. This is true for recruitment, employee development, business processes, employee turnover, improving employee retention and existing staff structures. With knowledge of where the business is heading, HR can make complex decisions about the skills necessary to train into promising staff members – or know where external hiring may be necessary.