CFOs and HR Can Work Hand-in-Hand To Maximize Employee Potential
Imagine that your small tech company has benefited from a boom in business, and all the changes make it necessary to bring on a part-time CFO or third party financial expert. You need to keep costs in line with growth projections while simultaneously meeting all your tax obligations.
As a business owner, you already know that labor is among the most expensive costs. You need to know how many employees you need, how much they’re worth and how to maximize their potential. You could turn to your hiring team, but realize that the financial implications of these decisions put them firmly in the wheelhouse of a CFO. Fortunately, there are ways for Finance Executives and Accountants to work in close cooperation with HR specialists and managers to keep labor costs on track.
If you’re bringing on a new finance specialist, one of the first things you should do is organize a meeting between that person and the HR team to make sure everyone is on the same page. This is a good time to talk about how staffing decisions have been made historically, how departments are organized and managed and how employee training and reviews, raises and discipline are handled.
The next step is letting your new CFO or Accountant get to know individual departments and employees, whether that’s through a review of records or personal discussions. As part of its CFO Journal section online, the Wall Street Journal recently published an article about how to get “the right people in the right seats.” The thoughtful article recommends assessing employees based on competence, the kind of energy they bring to the organization, whether they are good brand ambassadors, whether they are team players, and whether any of them are flight or retirement risks. The article also recommended determining whether any of your department leaders are good technically, but “managerially challenged.”
Does Your Small Business Need a Strategic Overhaul?
Depending on what your new CFO learns from HR and your sense as a business owner, it might be wise to go as far as completely changing the structure of your organization. Maybe your small business was built from the ground up by you and your husband, and so it worked out that you did a lot of work on the computer at first and he managed client relations. Then, the company grew quickly and you hired a few people to help out with all kinds of jobs. Now one person is in charge of the facilities, including setting up the network, but his real talent is in process management. Meanwhile, you have gotten bogged down trying to maintain your website, but your real talent is in sales. Making the strategic decision to hire a custodian and web developer and establishing yourself as sales manager could save you in the long run.
Enhance Productivity by Rewriting Job Definitions
Alternatively, a little shuffling could be all you need. For example, imagine that you discover that your IT Manager is one of the best and fastest coders in the business, but that his style of working differs so greatly from the employees under him that project management processes are in disarray. You could move that manager to more of an expert or advisory role and let someone from his team take on more day-to-day management work such as assigning tasks in a systematic way and setting deadlines.
Are You Carrying Dead Weight?
Firing or laying off employees could be another necessary solution, and your CFO can work with HR to advise you on whether such actions are necessary or if training or discipline could be a better way forward. They can also recommend employee retention and succession strategies that will be both effective and budget-friendly.
Your business needs to be in good financial shape to stay afloat, and employees represent a big chunk of your expenses. Your CFO and financial team need to keep an eye on what’s happening with your labor costs to help you succeed. However, don’t forget about the other ways employees matter: they are the public face of your company and are your colleagues, they are the keepers of valuable institutional knowledge and they give up a significant portion of their lives to help you fulfill your dreams.
In the end, the best way to ensure that your labor costs are in line is to pay your people fairly, give them the chance to perform at their highest level in work that is a good fit for their skills and interest, and provide good opportunities for review and improvement.