Editor’s note: This article launches NextWork, HiBob’s branded content series exploring the shifts shaping the next decade of work. Through perspectives from HR and business leaders, NextWork spotlights the real challenges and practical decisions shaping what comes next.
*This article was written by Tom Pearson, the director of people operations at Twenty7tec. With 15 years of leadership across retail, health care, and SaaS, Tom balances operational and human management, focusing on building both performance and a people-first culture.
For years, I’ve heard the same question echo through boardrooms and LinkedIn threads: “Do we really need HR?”
In a world obsessed with efficiency, margins, and EBITDA, HR can appear to be a soft function or a cost center. Many view it as the department that handles birthdays and benefits while the “real” business happens elsewhere.
I report directly to our CFO. On paper, that structure may reinforce the narrative. But when HR reports to Finance, it can become a strategic partner. When done right, reporting to a CFO won’t limit HR’s impact. It will sharpen it.
Here is the business reality: Finance lives in the numbers, and HR navigates the human complexity that produces the work driving those numbers.
HR and Finance aren’t opposing forces. They’re siblings who work better together.
As we look toward the future of work, the tight alignment between these two teams will no longer be optional. People context and financial discipline will be equally critical to every decision a business makes.
The businesses that thrive don’t separate people from performance. They balance the heart of HR functionality—the people—with data, the common language spoken across the business.
For HR, this means translating human potential into terms that resonate with Finance: Human potential is business performance. For Finance, it means factoring people decisions into every forecast, investment, and risk assessment that shapes those results.
For both teams, it means expressing engagement, retention, capability, and culture in commercial terms. When HR and Finance align around this philosophy, human capital stops sounding abstract and becomes a measurable driver of business performance.
Over the next decade, that shift will become critical. Businesses will operate under sustained pressure to justify cost, demonstrate efficiency, and prove that every investment, including people, drives measurable value. Alignment between HR and Finance will no longer be optional. It will be structural.
Reporting to a CFO can strengthen HR’s impact
Shifting from viewing HR as a cost center to a strategic driver doesn’t require reorganization. In my experience, it requires a change in the flow of information.
As an HR leader reporting to a CFO, clarity is a priority. If I want buy-in, I can’t rely on sentiment or philosophy. People decisions need to be framed in commercial terms from the start.
The turning point came with my inclusion on the Operational Board, the business’s senior operational decision-making group. With a seat at that table, HR contributes to the business plan as it’s built.
HR collaborates with the CFO before board discussions. The sibling dynamic is a critical piece of the puzzle: We align on cost, ROI, and risk, then present the case to the Operational Board as a team, entering the room with a unified, quantified business case.
First, we agree on the numbers
HR and Finance work together to create metrics that meet the requirements of both departments, including revenue per FTE and cost of attrition, which evolved from traditional HR metrics like headcount and retention rate.
By using formulas Finance has already vetted, we stop debating definitions and start discussing strategy.
That’s what “better together” looks like in practice: shared definitions, shared visibility, and shared accountability.
Each month, we review actuals against the budget together—not just salaries, but the entire People Operations spend. Every six months, we conduct a deep-dive strategy review as an Operational Board.
If the business pivots, HR and Finance are set up to assess whether we have the skills we need or whether we need to quantify the opportunity cost of hiring versus upskilling.
When strategy moves, financial planning and workforce planning move with it.
This alignment ensures we aren’t simply coexisting within the same organization. We operate from the same data-led insights, building a clear, unfiltered picture of the people who drive revenue.
Alignment creates speed
I first saw the difference between reporting to Finance and collaborating with Finance during the COVID lockdown.
At the time, I worked for a private medical SME, and we chose a different path. When the lockdown hit, we didn’t ask how to survive. We asked how to thrive.
When the world shut down, many businesses had limited visibility into the skills that already existed in their workforce. Without that clarity, some paused operations or moved quickly to reduce headcount.
Because HR and Finance had a close working dynamic and operated as partners, we were able to move quickly without relying on guesswork.
We quickly made the decision to pivot and become an online health care provider. To do it effectively, we needed to understand exactly what skills we already had. So, we turned to our skills matrix.
We had always treated it as more than a performance tool. For us, it was a capability map. We had captured data on skills that didn’t necessarily relate to people’s current roles but had value elsewhere: skills self-reported from prior careers, positions, or personal projects.
Early on, we identified someone who had previously worked in a warehouse for an online retailer and understood centralized stock management. We found another team member who had managed a large call center and understood enterprise telephony systems.
These were the skills we needed to kick off our new business structure.
This data proved invaluable. If HR and Finance had been operating in siloes, it might have gone unused. Without that alignment, we may have defaulted to external hiring or assumed the risk was too great to proceed.
Because HR and Finance were so closely aligned, Finance incorporated people data into a forecast for the coming months. By balancing the capability we had against the demand we needed to meet, we were able to see immediately where we needed to recruit—and where we didn’t.
Equally important, we could also see where capacity genuinely didn’t exist and use furlough strategically to support people without jeopardizing the business.
As demand for our business surged, the model HR and Finance built together became a rolling forecast, continually updated to rebalance demand against resources.
When you quantify opportunity, decisions change
As demand surged, we had a choice: grow the team or play it safe. There were legitimate concerns about whether the spike would last.
Moments like these are when HR and Finance alignment proves its value. Because we’d already agreed on the numbers and the model, we didn’t debate opinions. We quantified the trade-off and took the decision to the board in their language—together.
Talk to the board in their language
In many boardrooms, HR brings what I call “water meter” metrics, such as headcount, retention rate, and vacancy numbers. These metrics are accurate but static.
A water meter tells you how much has flowed. If HR walks into a board meeting and reports on retention or says, “We have two vacancies in Sales,” those readings that don’t tell the story on their own.
Board members want to know the cost of the bill, whether usage is spiking (and why), and whether there’s an invisible leak draining value in the background.
Tight HR–Finance alignment translates static “water meter” numbers into insightful financial terms that resonate in the boardroom.
This is where alignment reframes the conversation.
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From vacancies to opportunity cost
Instead of reporting that we had two vacancies on the Sales team, HR and Finance worked together to build a Lead Coverage model.
We calculated average revenue per lead and multiplied it by missed leads—the opportunities our current team didn’t have the capacity to follow up on fully.
By comparing that against our average Sales team capacity, we could quantify the opportunity cost of the vacancy.
This reframed our decision-making process. Instead of focusing on salary cost, we focused on revenue left on the table, grounded in real demand, not averages.
The question was no longer, “Can we afford to hire?” It became “How much revenue are we willing to leave behind?”
The ramp-up reality
Next, we looked at ramp time, how long it takes a new hire to become fully productive.
Historical data showed that new hires delivered around 20 percent of average performance in their first two months and only reached full productivity around month six.
We factored that into the total cost of the vacancy and into our forecast, allowing us to predict when the revenue gap would realistically close.
Retention ROI
When a team member asks for a pay increase, it can seem like a simple payroll cost. But pay increases, especially for critical roles, are rarely simple.
We faced cases like this regularly post-COVID. In one instance, a senior Sales team member was headhunted, and retaining them required giving them a £10,000 increase. On paper, that’s a five-figure addition to payroll.
With HR and Finance working together, we were able to quantify the real costs of letting this person go:
- Time to fill. Given the seniority of the role, we were looking at four to six months before a replacement could even start.
- Recruitment costs. Recruitment costs alone were approximately £10,000—covering advertising, agency fees, and senior leadership time.
- Lost productivity. It would take a new hire up to six months to reach full productivity.
When we ran the numbers and looked at the full picture, the decision was straightforward. £10,000 wasn’t just reasonable. It was fiscally responsible.
Quantifying opportunity this way, people decisions stop feeling subjective. They become part of the financial strategy.
Forecasting works better with people context
Accurate forecasting depends on understanding both financial exposure and human behavior. That’s where alignment between HR and Finance makes the difference.
Take annual leave, for example. Finance tracks unused leave as a liability. If it isn’t used by year-end, it might result in payouts or a wave of absences in December. The cause of patterns like this becomes clearer when we view financial data alongside people insight.
People do not use their leave at a flat rate.
While the “water meter” metric might show a high balance in June, HR provides the human context behind the numbers:
- Person A always banks their time for a traditional family holiday in December
- Person B is saving days for an upcoming wedding and honeymoon
- Person C is planning to extend their parental leave to support a pregnant partner
Life context doesn’t appear on spreadsheets, but it materially affects financial outcomes.
This is where HR and Finance strengthen forecasting together.
We built a dynamic leave forecast
Together, we combined quantitative data—booked and unbooked leave records—with qualitative insight based on historic usage patterns and known life events.
The result wasn’t just a leave balance. It was a monetary estimate of the likely year-end liability. It reduced surprises and improved forecast accuracy.
By applying Finance’s forecasting discipline and integrating the human insight HR brings, we replaced assumptions with clear projections—an approach that becomes even more critical as AI reshapes how we define efficiency.
AI will test the HR–Finance partnership more than anything else
As we move deeper into an AI-driven future, the relationship between HR and Finance will increasingly center on one word: efficiency. AI is where this partnership gets stress-tested, as leaders balance short-term efficiency with long-term capacity.
Over the next decade, that efficiency pressure will become a design constraint for how we structure roles, build capability, and plan growth, alongside how we manage costs.
For many organizations, AI presents a straightforward opportunity: Automate administrative work, reduce headcount, and achieve immediate bottom-line savings. It can make a business leaner and improve EBITDA almost overnight. But efficiency alone doesn’t guarantee growth.
Efficiency is about doing things right. Strategy is about doing the right things.
Organizations can use AI to enhance people’s output and expand capacity across the business. The best HR–Finance collaborations look past payroll savings and ask questions that protect long-term value.
- Does removing this role increase our capacity to grow? Automating administrative work gives us a choice: reduce payroll or redirect human capability toward higher-value work. The first option reduces cost. The second expands capacity.
- What high-value work becomes possible if we evolve this role? In Finance, automating routine work can allow teams to shift from reporting on what has happened to shaping what could happen next. It shifts the focus from answering “What has the business done?” to “What can the business do next?”
- What will we lose if we eliminate roles in favor of AI? In many businesses, people wear multiple hats. When an organization eliminates a role solely because of its primary function, the secondary responsibilities don’t vanish. Instead, they shift to other team members, eroding their ability to focus and slowing execution across the company.
When organizations replace roles with automation, they also need to account for institutional knowledge that doesn’t appear on the balance sheet. And we already know new hires require time to reach full productivity.
AI shifts risks. It doesn’t eliminate them.
AI may not carry the same upfront salary cost, but it comes with risks of its own: vendor dependency, regulatory shifts, pricing changes, and technological uncertainty.
Upskilling compounds people’s value over time, much like long-term investment growth. When we develop existing talent, their capability grows over time.
AI also comes with a reputation. When an invoice is wrong or a customer has an issue, people want someone who understands context and can resolve it.
AI makes alignment non-negotiable
HR’s role is to ensure AI and automation enhance human output, protect culture, and support long-term growth.
When HR and Finance align on efficiency and opportunity, the return extends beyond cost savings. It strengthens performance across the business.
The future belongs to aligned leaders
The pressure to deliver efficiency, protect margins, and justify every line of spend isn’t new and isn’t going away. Over the next decade, that pressure will shape how organizations structure roles, deploy AI, and allocate budget.
When HR and Finance operate separately, decisions reflect only part of the picture. Cost is visible, but context is not. The business moves forward without full clarity.
The advantage of tight HR–Finance alignment is simple: Businesses get better decisions, faster. Hiring becomes a modelled investment decision. Retention becomes a quantified risk. Forecasting becomes more accurate because it reflects how people actually behave, not how spreadsheets assume they do.
AI will only raise the stakes. Used well, automation reduces effort and expands capacity. The organizations that win over the next decade will be the ones that look beyond short-term savings and use AI to redirect time into higher-value work, upskill talent, and protect institutional knowledge that doesn’t show up neatly on a balance sheet.
HR and Finance are two parts of the same operating system. When they plan together, the business stops debating numbers and starts acting on them—with full context.
When HR and Finance work together, the returns are exponential.
Key takeaways: HR–Finance alignment, AI strategy, and data-driven workforce planning
- HR–Finance alignment drives better business decisions. When people data and financial data are modeled together, hiring, retention, and forecasting decisions become strategic investments—not reactive cost discussions.
- Quantifying opportunity changes the boardroom conversation. Framing vacancies, pay increases, and capacity gaps in terms of revenue, risk, and ROI turns “headcount requests” into measurable business cases.
- People context improves financial forecasting accuracy. Leave patterns, ramp time, and institutional knowledge don’t show up cleanly in spreadsheets—but they materially affect liabilities, productivity, and long-term growth.
- AI raises the stakes for efficiency and workforce strategy. Automation can reduce effort, but long-term value comes from redirecting human capability toward higher-value work and protecting institutional knowledge.
- Short-term cost savings must be balanced with long-term capacity. Eliminating roles may reduce payroll today, but capacity, institutional memory, and growth potential determine performance over time.
- Aligned leaders use AI to expand capacity, not just cut costs. The strongest organizations treat automation as a lever for growth, upskilling, and operational resilience—not simply margin improvement.
- Shared accountability between HR and Finance compounds performance. When both teams operate from the same metrics, models, and forecasts, businesses move faster—with full commercial and human context.
