Sounds like a silly question. Finance and HR functions are necessary organizational support functions. Companies require both Labor and Capital for success. Yet turf wars and egos impact many companies and the individuals that work in them. (Read: What do CFOs want from HR?). How a CFO manages their relationship with Human Resources is very important to their success (Read: Road Map to Successful CFO Relationships).
Interestingly, my recent blog on Human Capital Reporting Standards shows a new intersection where Finance and Human Resources can work together, building on each other’s strengths.
If this subject interests you, a recent article in CFO.com by John Boudreau called “Does Finance Play Second Fiddle to HR?” is worth reading. In his article, Boudreau states that his research shows that HR feels that their work is more strategic than Finance feels.
To Boudreau’s credit, he does realize that the results of his research does not make sense compared to what would be expected, and provides answers as to the reasons for the difference in how HR and Finance feel about being strategic.
Who’s work is really more strategic? If you want to know the answer, ask the CEO and ask the Board. Until objective research can be done using the approach I mentioned, let`s look one subjective criteria.
Who becomes CEO? If HR was really more strategic than Finance, Vice Presidents of Human Resources (or as we see this title being used more – CHROs) would be promoted to CEO of organizations. While tracking CFO Moves, I see CFOs that get promoted to CEO, either on a permanent or interim basis. I haven`t seen many VP HRs becoming CEO.
Who do you think is more Strategic – Finance or HR? Why?