http://GatewayCFO.com - In our continuing series detailing the duties of a CFO, or Chief Financial Officer, today we discuss the CFO's role as it relates to Human Resources. HR is an area that encompasses many of a company's competitive advantages (its people), contains huge portions of a company's cost structure (people again), and is always a source of great risk to an organization. It's no wonder that your CFO should have HR near the top of the list.
Managing benefits and related policies is a major source of cost containment. As such, the CFO should play a direct role in the management of health insurance and other employee benefit costs. With regulations and pricing constantly changing, your CFO needs to have strong relationships with experts in this area. Likewise, he or she should have these same kinds of relationships in the areas of work comp, general liability, and other business insurances. These insurance costs are often a huge expense for even the smallest businesses. A strong CFO should help you stay on top of these costs, negotiate the best deals, and design programs to keep costs in line.
Small, growing companies will likely face a point where the management of their employees becomes unwieldy. At this point (preferably prior) you really need to take the time to develop an employee handbook, in addition to an HR policies and procedures manual. Your CFO should assist in the development of these documents, along with building and implementing benefit programs, and should have prior experience in these areas. Having well-defined HR policies is very important, and should take into consideration the long-term viability of the company, employee retainment, risk tolerance, productivity concerns, and more.
Related to employee retainment, the CFO should be a key contributor in developing a company wage scale. The wage scale should establish pay ranges for employees in various positions and seniority. It should be based on local and industry cost and wage data, as well as the company's unique circumstances. Again, the CFO must keep an eye on long-term company viability while also offering wage potential to attract quality talent.
your CFO should be invaluable in developing incentive or bonus programs that align employees with the company's goals. A properly constructed incentive program can motivate all levels of employees to new levels, really bolstering performance and profitability.
There are many variables and possibilities to consider when designing effective HR programs, and your CFO should be well-versed in the methods in addition to having strong relationships with specialized experts in the various areas.
Be sure to watch the next video in the "What Does a CFO Do" series on "Pricing and Cost Analysis", and definitely stop by http://GatewayCFO.com to get your FREE copy of Cash Flow Clarity, a cash planning system that will finally allow you to get your cash flow under control, make more money, and regain your peace of mind.