'To really be able to add value, you have to understand the financials,' says head of people and capability at TSB Bank
Over the past few decades, HR has evolved from being primarily responsible for personnel and administrative tasks to becoming a strategic partner within organisations.
And one HR leader believes that as the HR field evolves, there is a real need for HR professionals to recognise the importance of understanding the financial aspects of their organisations.
That’s not to say the people side isn’t important, said Tanya Hadfield, head of people and capability at TSB Bank.
“I think it’s really important but to be respected, and to really be able to add value, you have to understand the financials,” she said.
“We, as HR, have fought for a long time to be accepted as an equal partner at the table, so you really need to understand the business strategy, and the financials, to be able to really add value that is practical to the business.”
Weighing up the people side and the business side
Hadfield – who joined TSB New Zealand in the summer of 2021 – defines her role as an HR professional as being able to provide a range of solutions, and then working with the business stakeholders to find out what the best solution for them is.
“That is weighing up the business side and the people side,” she said. “We can all come up with solutions that are great from a people perspective, but don't necessarily work from a business perspective.”
Working in the people profession, HR cares for people and wants good outcomes for them, Hadfield, said, “but this is where you need to be pragmatic, the business needs to be sustainable. It’s all very well having a happy farm, but what if it goes broke, and no one has a job?”
Hadfield believes that HR need to consider the risks and their business impact.
"[It’s about] really being able to articulate them. What are the risks that you have if you go with this option? What are the pros and cons? And it may not be the gold standard from a people perspective but there might be a reason that a business stakeholder would choose that option,” she said emphasising that for HR professionals, "sometimes you have to make tough choices."
Collaboration is key
For those HR professionals looking to understand the financials and expand their influence and impact within an organisation, Hadfield believes building strong partnerships and collaborating with business leaders is crucial.
“Seek out the people that are respected in the organisation and develop a relationship with them. Ask questions and learn the language of the business to actively participate in financial discussions,” she said.
"If you're on an exec team, you have access to all the financials, but it comes down to understanding the financials and what the business is trying to achieve. Pair up with someone in finance and don’t be afraid to ask silly questions.”