My company is growing very fast right now and we’re starting to rethink our organizational structure.
I have been with the company for over 2 years and have always reported to the President. But with all this restructuring going on, my boss started talking about maybe having HR report to the CFO. I agree on the fact that he has too many direct reports and that he needs to make changes … but not HR! Please not HR!
Before I continue, I need to clear a few things up:
Don’t judge me for what I’m about to say because I really am an open minded person. I embrace change. I have been in HR for over 15 years and reported to CFOs as much as to Presidents so I know what I’m talking about. I actually really liked the CFOs that I reported to; they were great people. When it comes to reporting however, it’s about the function and not the people.
I am a true believer that HR should always report to the President or the most senior level in the company and I will work hard to make sure that this is where I report. Here are my top 4 reasons why:
People v. Money
If your company says that its most important asset are its people, why would you have HR report to the CFO as the person who controls the money and who will be evaluated on the bottom line at the end of the year? How can this be well perceived by employees? For me, it’s telling them that what we say and what we do is very different. How can HR be well represented by the head of finance when finance and HR priorities are clearly very different?
Access
Reporting to any executive other than the President can limit the HR department’s effectiveness. HR must have a direct line to the President. When you have a delicate situation like a political issue between 2 departments, a sexual harassment case or a termination of a C-level executive, HR must be free to report this directly to the President without having to go through a chain of command.
Culture
HR needs to report to the CEO because this is the person who shapes the company culture and HR is the best representative of the culture. If you don’t have a clear understanding of your company culture and both the President’s vision of how this plays out in the day to day and the expectations of all employees, how can you do a good job at promoting and developing programs and decisions that support it?
Impact
Reporting to the CFO, or any other position below the President, moves HR one step further away from where the strategic decisions are made. If HR is considered a strategic partner, shouldn’t they be seated at the same table with other strategic functions like finance, operations, research and development, and sales?
And if we are seated with the executives, why are we still calling ourselves HR Directors and not Chiefs of HR? OK, that’s another discussion.
So what do you think about this?
Photo credit iStockphoto
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4 Comments
Can anyone tell me if it’s legal for the president of a company to be HR as well? Can they have both titles?
Amen!
Solid concept with one faulty premise in my opinion. Finance and HR should not, in the big picture, have priorities that are all that different. As an HR professional and a shareholder, I believe if HR and Finance priorities are not closely linked, the business will suffer and so will the employees. HR leaders who want to be at the table where strategic decisions are made, must have money, as well as culture, as priorities. Finance professionals that sit at that same table must understand that the culture of the business has a critical impact on the money. This is true whether your business is for profit or not for profit.
Thank you Robin and Julie for your comments…:-)
Julie, I work hand in hand with the CFO every day and I agree that we need to be closely linked! But even if my CFO has a great understanding of the business and HR priorities, he will not always have the reflects to take these priorities into considerations when making decisions. That’s why we make such a great team and that I think we both need to be at the table together.