What Can The Finance Department and HR Learn From Each Other About Balancing Short- and Long-Term Goals?
At first glance, it might not seem as if the departments managing company finances and those managing employees have much to do with each other. Isn’t there a big difference between balancing a budget and retaining employees? Or between managing operational or capital expenses and increasing employee satisfaction?
While there are many differences in the roles played by HR and finance departments, there are also many similarities between the skills needed by each. Both departments need to find a way to balance their investment in short- and long-term goals so they can keep the company running smoothly. And they can learn a lot from each other about how to achieve those goals.
In 1959, psychologist Frederick Herzberg published a book called The Motivation to Work. In this book, he said that there are two major factors that influence employees’ job satisfaction.
The first is “hygiene factors” – things that have the potential to dissatisfy employees if they’re not taken care of. For example, company policy might include rules that would increase an employee’s dissatisfaction with their job. In contrast, creating a fair policy that outlines necessary rules minimizes employee dissatisfaction.
The second is “motivating factors” – things that can increase employee satisfaction. This includes more intangible, long-term factors. Examples include providing challenges and opportunities for employees to improve their skills, or recognizing good job performance.
Similarities With CapEx and OpEx
Similarly, those in charge of finances face the challenge of balancing operational expenses and capital expenses. The first is about maintaining your infrastructure. The second is about long-term investment in your company.
Operational expenses are similar to the “hygiene factors” that influence whether or not employees are satisfied with their jobs. These are the expenses that affect the day-to-day running of your business. Investing in operational expenses keeps the lights on and the paperclips stocked. These expenses are vital for maintaining the business but do not directly prompt business growth.
Capital expenses are items your company will use beyond the current tax year. Examples include a laser printer, a company vehicle, or a new warehouse. Typically, capital projects involve more money and more strategic planning than operational expenses. While it is useful to budget for CapEx and OpEx separately, it’s also a good idea to look at both together when making plans for your company’s future success.
HR and Finance Collaboration
It’s pretty easy to see the similarities between Herzberg’s factors and the types of expenses that a finance department works with. Hygiene factors and operational expenses both help keep the day-to-day running of your business go smoothly by meeting employee and operational needs. Motivating factors and capital expenses both help you achieve long-term goals by investing in the future of your employees and business. There can even be some direct overlap as well. Purchasing office snacks, for example, is an operational expense as well as a hygiene factor.
Joining forces could benefit both the finance department and HR. Together, they can share strategies for meeting operational needs and for selecting long-term investments related to the company as a whole and employees specifically. It won’t make sense for these departments to collaborate on every decision, but in certain situations the benefits could be significant.
One way to support collaboration within your company is by automating your financial processes. When you automate processes such as capital project management for CapEx and accounts payable and purchasing for OpEx, you make it easier for employees in different departments to collaborate and access important information (especially if you automate more than one department using software from the same supplier). You’ll also make employees’ jobs easier by implementing an easy-to-learn system that automatically enforces company rules and handles mundane processing tasks. Contact us today to learn more about how NextProcess can help improve collaboration, balance your expense planning, and increase employee satisfaction.