Canadian HR Reporter

CANADIAN HR REPORTER October 19, 2015 NEWS 21 getting this in additional return,' it's just too murky." Part of the challenge in looking at profi t margin for FTE is there are areas in the organization that are cost centres and expense-driv- en while there are other areas that drive revenue as well as expense. "So then how do you start weighting your profi t margin per FTE where you've got a blend of cost centres to revenue-produc- ing centres?" said Fels-Smith. It really is a training and de- velopment opportunity both for fi nance and HR, said Pacheco. "If you think of the underlying escalation of revenue per FTE, how do you define 'employee' when, more and more, there are contractors being brought on- board? So do you factor that into the equation or not? Are you looking at just full-time regular employees or are you factoring in the contractors and the part-time employees, etcetera, etcetera? And, depending on what you're using as denominator, it's going to aff ect what your number is." Relationships When it comes to the relationship with fi nance, almost 70 per cent of respondents had at least one HR- related function reporting into the fi nance department, most often payroll (68 per cent), benefi ts (46 per cent) and HR (41 per cent). And in the last fi ve years, in looking at HR functional areas, the fi nance department's level of oversight and responsibility has increased, according to 42 per cent of respondents, while 46 per cent said it has stayed the same and nine per cent said it has decreased. Looking ahead, 25 per cent expect fi nance's role to increase, directly or indirectly. "In today's economy, as compa- nies increasingly are looking at the bottom line, the fi nance person is primarily responsible for that, and given that a signifi cant portion of company expenses are people- related expenses, it only stands to reason that it would make sense to have that role report in," said Pacheco. ere's always an opportunity to collaborate further, she said. "HR is there to support the or- ganization and fi nance is there to support the organization as well, in a different manner, and the more they understand each other, the better." Martin said she has experi- enced either all of HR or part of HR reporting into fi nance. "You don't need to have some- one technically or offi cially report to you to be able to infl uence, to drive the change and to really move forward on the initiative… it's that relationship you have with the HR leader," she said. "If you build the right relation- ships and team appropriately, show that you're in there as a part- ner — not to do a power game, you're there to partner and help, that's what allows you to really help drive everybody forward." Tying the measurement back is sometimes diffi cult and that's where it makes sense to work with the fi nancial experts or analysts and have them look at how HR impacts that, said Trok. "Bring those people into the fold so that they can partner with you to share that data or to get better information around that so that you can grow that credibility internally," he said. "Don't measure just because you want to measure but measure what they're trying to get at, all the problems. If it's an implementa- tion turnover problem, solve that problem; if it's a sales-related ac- tivity problem, fi gure out what to solve there. "And… if you can't measure it, then that's where you can bring in some of that expertise and even- tually hire… somebody with that kind of statistical frame of mind or the background or skill set." A small operation with about 40 employees, the Toronto Region Board of Trade has the HR func- tion reporting to the CFO and they work together on programs such as employee engagement, pension plans and workforce planning, said Fels-Smith. "Working with HR in fi nance workforce planning allows you to tie out your long-term forecast on what your operating expenses are going to be, and also relating your employee costs to what long-term deliverables will be," she said. "If you've got a fi nance leader that is more controllership- focused, then having HR report to that individual may not be the best decision because the HR has some of that softer side that you can't necessarily quantify the ben- efi ts or returns." For HR to improve its analytics, it's about working with fi nance to understand what fi nance might be looking for, said Fels-Smith. "(It's) also getting that ground- ing and understanding on how the business operates because once you know how the business operates, that helps provide clar- ity on what you need for metrics and measures." Finance's oversight building METRICS < pg. 3 Getting a good look Sixty-three per cent of respondents to the survey by the Canadian Financial Executives Research Foundation said it is important or very important to use visually appealing HR analytics, such as dashboards. "It makes vast amounts of data and complicated data, it helps make it easier to digest and to understand," said Lois Martin, executive vice-president and CFO of Ceridian in Minneapolis. "And it's that age-old adage: A picture's worth 1,000 words or 1,000 numbers, and it allows a broader group of leaders or employees, who are not by their nature analytical, to better understand the business and the trends." Catherine Fels-Smith, CFO and COO at the Toronto Region Board of Trade, said she is a huge advocate and she uses a lot of visuals when providing results to the board of directors and CEO. "It's a powerful message — what I'm trying to convey jumps out very quickly, you're not having to explain your data set, and it's also great at showing trends." It's the story behind the visuals that's most important, said Greg Trok, vice-president of consulting services at Ceridian in Minneapolis. "Whether it's dashboard or a presentation, in my mind, it's not necessarily what you can read off of that or interpret off of that, it's really the dialogue that it begins and starts with. If you can use that as a prop to talk about certain issues and challenges, you really have to know what you're talking about and what you're trying to drive to, options you can provide the executive team."

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