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Need Budget Approval for Your HR Initiative? These CFOs Have Tips for Getting the Green Light 

Nicole Klemp

You see a need or problem in the business and have a great plan for solving it. Your initiative requires some extra investment (e.g., you need to add headcount, buy a new software tool, etc.). You present your brilliant initiative to the Chief Financial Officer (CFO) to get their monetary blessing…

It’s a no. Your CFO doesn’t give budgetary approval, and your idea is dead in the water. Sound familiar?

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

Fortunately, the HR Superstars Community has you covered. On a recent webinar, 15Five’s SVP of Community, Adam Weber, sat down to pick the brains of two experienced CFOs. 

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

Why are budgets so much tighter today?

If it feels like you’ve been hearing “no” more often lately, it’s no coincidence. Sayle and Scott explained why budgets have become tighter across most industries in the last year or so. 

Between the fear of a looming recession and the recent banking crisis, companies today are experiencing a little financial panic. As Scott explained, a CFO’s primary responsibility is to create a balanced view of what’s happening in the economy and how it impacts the business. 

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

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

“Specifically in tech companies, venture capital funding has gone to almost nothing,” added Sayle. “Because of the limitations on how much is out there, the pressure to become cashflow positive and profitable is very high.” 

As Scott adds, even in a strong economic climate—when “purse strings tend to be a little looser”—smart CFOs must still be thoughtful and bring the same rigor to their decision-making that they do in leaner times.

Speaking your CFO’s language 

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. Luckily, some of the same HR metrics you’re already tracking are probably the same ones they care about and want to see when presented with a new initiative. 

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—like increasing employee engagement and retention—are just as important to CFOs. They understand better than anyone that turnover is very expensive (especially losing high performers). Most are eager to partner with HR to minimize those impacts.

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

“Every company has access to the same technologies,” he says. “They all have the same access to capital. They all have the same access to markets. So what’s the differentiator between the winners and losers? It’s the people and the culture.”

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

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

Build a meaningful business case

Sayle and Scott have some recommendations for bringing your CFO a strong case when asking for budget. This includes framing your request in alignment with current business objectives and using realistic projections. 

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

Scott recommends presenting the most probable upside and downside to greenlighting your initiative. If you can show that even the worst-case scenario could still be profitable or reduce long-term costs, it’s a whole lot easier to sell your CFO on why it makes good business sense. 

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

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

  1. Set the context
  2. Be reasonable
  3. Bring the most probable business outcomes
  4. Name the business impact
  5. Approach the CFO-CHRO relationship as a partnership 

Okay, but what if you still get a no?

Even with a strong initiative and airtight business case, you may still get a no from your CFO. But Sayle and Scott say you shouldn’t be discouraged by this, and you can always take another crack at it if you still feel strongly about your idea.

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

Sayle offers some great insight into connecting with your CFO in a meaningful way: “The things that are going to help you are methodicalness, slowness, thoughtfulness, and pauses. We [CFOs] are not highly emotional people. We’re generally very math-forward and very logic-forward. If you get into an emotional conversation, you might just shut down your CFO.” 

In some cases, you may have to accept that you’re not going to get what you want, and it’s time to move on. Even if you don’t agree with your CFO’s ultimate decision, don’t let it keep you from bringing more great ideas to the table in the future. 

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

Being a good financial steward for your organization can help you build and maintain a strong partnership between finance and HR, and help you get more green lights down the road.

Want more tips for impressing the heck out of your CFO? Watch Adam’s conversation with Sayle and Scott on demand.

Watch the webinar >