Dealing With 'Expensive Assets': The CFO and the Chief Human Resources Officer

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Salaries, healthcare, pension plans and other expenses associated with human resources make up the bulk of any company’s costs, which is why the partnership between the CFO and the CHRO can sometimes be fraught.

CFO Innovation’s Cesar Bacani spoke with Ashley Goldsmith, Chief People Officer at cloud-based enterprise software provider Workday, about her relationship with CFO Robynne Sisco and the finance team, and how HR and finance can best partner together for the good of the company. Edited excerpts:

One of the CFO’s key priorities is business partnering, both at the C-level and between members of the finance team and others in the organization. How would you describe business partnering in Workday between finance and HR?

If you put three things together, you have a really powerful holistic view of the organization. You should have finance thinking about the financials of the organization. You should have HR making sure that they're also thinking through the people component. And then the CEO, of course, considering the strategy and the culture of the organization.

You have been in HR for many years. Are you seeing the business partnering relationship with finance changing? Is your CFO’s relationship with HR in Workday similar to your experience in other companies?

I think it's more evolved than it was in past organizations. Part of that is because Workday is a digital native. But I do think times have changed, at least for progressive companies.

It would be shortsighted for either the Head of HR or the Head of Finance to not recognize the importance of the expense, but also to not recognize that the business would not be the business without the talented people in the organization

In my prior life, technology often was not one system that allowed collaboration. We would have had different numbers. The CFO and I would have spent a lot of our time figuring out whose numbers were right. Who had the right headcount data? Who had the right expense data? Who had the right benefit costs data?

At Workday, we don't have to talk about any of that. That data is there. And so we can talk exclusively around what do we want to do about that? Are we on track? Are we off track? How is attrition impacting us? Do we think that there's an action to be taken or how do we drive more productivity out of the organization?

Finance and HR have different perspectives on human resources, don’t they? The CFO tends to look on people as expense, while the CHRO regards people as an asset?

I think we both have the same view, which is they are absolutely an asset – but they're an expensive asset.

It would be shortsighted for either the Head of HR or the Head of Finance to not recognize the importance of the expense, but also to not recognize that the business would not be the business without the talented people in the organization. Robynne [Sisco, Workday’s CFO] and I look similarly at that talent. How do we absolutely maximize that talent to drive business success for Workday?

A big piece of that is how do we energize them? How do we engage them? How do we help them do their very best work so that they will do their very best work for our customers? We believe deeply that you are highly unlikely to have a happy customer with an unhappy employee. Those two things just typically don't go together.

I imagine Robynne would be like a mini-HR person in the finance department.

It's the same as with every leader, whether it's the Head of Sales, the Head of Finance. They are the chief people person for their function, so driving engagement, connecting, making sure that they are retaining the best people and getting the best work out of their workforce would be key.

If you read any of Robynne's blogs or things that she's written, you will see she talks about company culture probably more than I do. And that's because she feels as strongly as I do that the culture is a massive component of driving business success, that if you have that underlying fundamental set of values and behaviors that put customers and innovation and integrity at the front, then good things will happen and a virtuous cycle [is established].

Do you find as an HR person that the way finance approaches talent development is different from the way sales does it, for example, or IT?

I think that the way you motivate and inspire and engage people is highly personal. You can make generalizations about certain types of workers – that the average technology worker would be perhaps motivated differently than the average salesperson.  But I think, more and more, technology helps change all of us.

I'll liken it to the consumer. When you have a consumer experience, you pull up your phone, you open any app, you expect it to know your patterns, your behaviors. You don't expect it to be advertising something to you that's applicable for a teenager. You expect something that's relevant to you.

That's increasingly true of our workforce. They expect things to be relevant and personalized for them. That is, again, where technology can help. I think it's where the mindset of the organization must evolve, or else we will not keep our very best people.

Is personalization complicated for HR? It's like having 12 children and each one has different dinner preferences. You need to prepare 12 different dishes. Isn’t it easier to say: "You just need to eat this because this is what I cooked."

I haven't thought about it as an analogy to dinner. I might suggest, in the dinner analogy, that it would be: "We're all going to have this core dish, but there are four side items and you can pick among these side items." It’s not an endless array. Not everyone will have a wildly different meal.

For me, in my job, the way we think about it is: How do I ensure that people have the access to know what their options are and to be able to understand what they are and how to take advantage of them? How do they get the opportunity to know what the career opportunities are? How do they learn from and see what has happened to others in the organization?

The system does have an ability to identify people who are risk in terms of talent retention. It can tell a leader: "This person is at risk [of leaving] based on a multitude of factors.” If that person is a high-performing talent, that will allow you to go and sit down with them 

We have something called an "opportunity graph" in the Workday technology. The average accountant at Workday could look in the system and say: "Oh, I see that’s where I am. And people before me, other people in my accountant role, 20% of them have gone on to become senior accountants. Eighteen percent have gone to work in the Product Management group.”

But not identify who the person is?

Actually, they can identify who the people are. And what's cool about that is, if I saw that you used to be an accountant and now you're in Product Management, I could call you and say, "Hey, tell me how was that change? What's been hard? What's been good?" And then I could see if that [job] is right for me.

And so my role as Chief People Officer is, how do I provide those tools so that no matter what department you're in, you know what your options are? And then if you're Robynne leading it, how can she can be reinforcing that we want career experiences for our people? We support learning new things and we can encourage that transparency.

This is an app?

It is. It's in the Workday system. They just click on that and they can see it and then they could also see open jobs. They could say, "I don't want those jobs right now, but tell me next time a job opens up," and the system will send them a note.

Within Workday?

Within Workday, yes, not out in the world. We don't try to encourage them to go elsewhere. We're not that crazy yet.

So HR and the CFO would know that a finance team member is looking at open jobs? That may factor into the way you would handle or deal with this particular person?

If they want to apply for a job, our internal protocol is that they should let their boss know. The system does not do that. It wouldn't send Robynne an alert, for instance, because that would be a violation of their privacy.

The system does, however, have an ability to identify people who are risk in terms of talent retention. It can tell Robynne or any other leader: "This person is at risk [of leaving] based on a multitude of factors.” If that person is a high-performing talent, that will allow Robynne to go and sit down with them and say: "Tell me about your career interests."

How does the system know these things? Does it access emails . . .

No, no. It's through machine learning.

Let me give you an example. If you had had three managers in the last two years, and the system also knows that the market pay range for somebody in your job has shot up and your pay has stayed stable, the system would [conclude]: "Wow. He's had a lot of change internally and his pay is falling a little bit behind market."

It could then tell the manager: "Hey, take a look at this.” I as your manager can then have a proactive opportunity to have a conversation with you and hopefully to keep you.

I think it's incumbent upon you as CFO to sit with me as CHRO and raise my level of knowledge and my understanding of your perspective. I as CHRO should care as much about the financials of the company as the CFO does

What advice would you have for CFOs that want to strengthen business partnering with CHROs?

I think a lot of it is relationship-building. First of all, let's assume you've got two of the right people. You need a CFO that thinks holistically about the business, which includes the people component, and you need a CHRO who understands that you're not there just to give people a joyful time.

You're there to drive the business, and both of those things need to come together. Assuming you have that, I think the CFO [then] needs to forge a strong relationship with the CHRO.

Part of that is spending time together so that there's trust. You start to understand the interests and needs of both organizations, and that you're both crystal-clear aligned on the goals of the business such that you can be making decisions in tandem and considering the different perspectives.

I do think a consistent view of the same data, no matter how you get it, is important. You'd both be able to bring your expertise and your perspective to that data and drive to faster, simpler decisions because you're looking at the same thing.

If the CHRO does not understand “that you're not there just to give people a joyful time,” how may the CFO deal with him or her as a business partner?

Hire a different CHRO? I'm just kidding.

I think it's incumbent upon you as CFO to sit with me as CHRO and raise my level of knowledge and my understanding of your perspective. I as CHRO should care as much about the financials of the company as the CFO does. If the financials of the company aren't good, we won't be growing. We won't be successful.

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