Need budget approval for your HR initiative? These CFOs have tips for getting the green light

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You see a need or problem in the business and have a great plan to solve it. Your initiative requires additional investment (for example, you need to add staff, buy a new software tool, etc.). Present your brilliant initiative to the CFO for his monetary blessing…

it’s a no. Your CFO doesn’t give budget approval and your idea is dead in the water. Sounds familiar?

A common obstacle for HR teams trying to get new initiatives off the ground is a lack of resources. To overcome this and “get yes,” HR leaders need to learn how to talk to their CFOs more effectively and build stronger business cases.

Fortunately, the HR Superstars community has you covered. In a recent webinar, 15Five’s SVP of Community Adam Weber sat down to analyze the brains of two seasoned CFOs.

Sayle Hutchison, CFO of 15Five, and Scott Broomfield, CFO of BlueBoard, shared their advice for CHROs and CPOs who want to build stronger partnerships with their finance leaders and gain more support for people and culture programs.

Why are budgets so much tighter today?

If it seems like you’ve been hearing “no” more often lately, it’s not a coincidence. Sayle and Scott explained why budgets have gotten tighter in most industries in the last year or so.

Between the fear of an impending recession and the recent banking crisis, businesses today are experiencing a bit of a financial panic. As Scott explained, the primary responsibility of a CFO is to create a balanced view of what is happening in the economy and how it affects the business.

“This is nothing like 2008 [or other previous recessions], but it’s a slowdown, which means the pencils are sharper,” he said. “There is a more critical eye when activities are placed in front of the CFO. Investment decisions and hiring decisions are scrutinized with increased scrutiny.”

When an organization spends money, there are always trade-offs. CFOs must determine whether it makes financial sense to invest in internal functions (such as human resources) and when to prioritize spending on products and services that make the company more desirable in the marketplace. Because their job is to protect the company’s market position, CFOs must sometimes limit inside investments, especially when cash is tight.

“Specifically in technology companies, VC funding has been reduced to almost nothing,” Sayle added. “Due to limitations on how much is available, the pressure to become profitable and cash flow positive is very high.”

As Scott adds, even in a strong economic climate, when “the strings of the portfolio tend to get a little looser,” savvy CFOs still need to be thoughtful and apply the same rigor to decision-making that they do in times more difficult.

Speak the language of your CFO

You don’t have to be a financial expert to have a conversation with your CFO, but you do need to speak the language of the business. Fortunately, some of the same HR metrics you’re already tracking are probably the same ones they’re interested in and want to see when a new initiative comes their way.

Some of the people and culture metrics Sayle and Scott review with their HR leaders include:

According to Sayle and Scott, many of the things that matter most to HR. HH, like increasing employee engagement and retention, are just as important to CFOs. They understand better than anyone that turnover is very costly (especially the loss of top performers). Most are eager to partner with HR to minimize those impacts.

As Scott explained, a good CFO views the HR leader as a strategic partner and values ​​people and culture as critical components of the business.

“All companies have access to the same technologies,” he says. “Everyone has the same access to capital. Everyone has the same access to markets. So what is the differentiator between the winners and the losers? It’s the people and the culture.”

Sayle adds that HR leaders need to recognize the importance of their role and be able to talk about metrics and how their initiatives will affect business goals.

“How is the people strategy related to the business strategy? We need to value that, invest in it and know how to measure it. If it’s business critical, then it’s critical to monitor and measure it,” he says.

Create a meaningful business case

Sayle and Scott have some tips for making a strong case for your CFO when requesting a quote. This includes framing your application in line with current business goals and using realistic projections.

(Top tip from Sayle: If you say your program will result in a “1000% return” or the results will be “through the roof,” your CFO won’t take you seriously!)

Scott recommends presenting the most likely advantage and disadvantage of giving the green light to your initiative. If you can show that even the worst case scenario could be profitable or reduce costs in the long run, it’s much easier to convince your CFO why it makes business sense.

Sayle also wants you to expect tough questions, because asking them is the job of the CFO. She says not to take it personally or let the questions scare you. They are there to help you and your CFO make the best decision as a team.

To summarize, here are the five steps to a CFO-friendly business case (courtesy of Adam):

  1. set the context
  2. be reasonable
  3. Bring the most likely trading results
  4. Name the business impact
  5. Approach the CFO-CHRO relationship as a partnership

It’s okay, but what if still get a no?

Even with a strong initiative and an airtight business case, you can still get a no from your CFO. But Sayle and Scott say not to get discouraged by this, and you can always try again if you still feel strong about your idea.

They say if you get rejected, find out why. Ask questions about objections so your CFO feels heard and can better understand where those objections are coming from. Take time to think about the objections so that you can go back and explain to your CFO how you will address their issues (or why you disagree with them).

Sayle offers great insight on how to connect with your CFO in a meaningful way: “Things that will help you are method, slowness, thoughtfulness, and pauses. Us [CFOs] they are not very emotional people. In general, we are very mathematical and logical. If you get into an emotional conversation, you may shut down your CFO.”

In some cases, you may need to accept that you won’t get what you want and that it’s time to move on. Even if you don’t agree with your CFO’s final decision, don’t let it stop you from bringing more great ideas to the table in the future.

Sayle and Scott want HR leaders to know that you You also have to say no to things sometimes. If someone brings you an idea, it’s also your job to decide if it makes sense to pursue it. As Scott said, “Everyone is a trustee of the organization, not just the CFO.”

Being a good financial steward of your organization can help you build and maintain a strong partnership between finance and human resources, and help you get more of a green light in the future.

Want more tips to impress your CFO? Watch Adam’s conversation with Sayle and Scott on demand.

Watch the webinar >

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