When a company experiences an ownership change, particularly through an acquisition by a private equity firm, strong HR and People leadership becomes essential. These transitions present a unique set of challenges that require expert guidance to navigate successfully.

Many organizations view HR functions such as hiring, performance management, employee compensation, and terminations—as simply having a baseline of operational impact. As a result, they may deprioritize changes to the HR team/structure/intent during a private equity transaction.  However, adding a truly strategic and business-first HR leader can elevate the impact of the function effectiveness by ensuring that the people strategy is aligned with the business strategy launched by new PE ownership.

They conduct comprehensive talent assessments to answer critical questions:

• Do we have the right people in the right places? Are they equipped with the right skills—not just for today, but for tomorrow’s challenges?  If not, how do we get there?
• Are performance development, measurement, and compensation practices structured to drive the desired performance, both in specific areas of the business and overall?
• Does the business have an engaged and productive workforce with the growth mindset essential for the accelerated performance PE investors demand?

During ownership transitions, the executive team – and often whole company – faces significant pressure and new operating models.  Effective HR leaders work with the executive team, both collectively and individually, to create a cohesive, high-performing unit. They facilitate productive dialogue, mediate conflicts, and help create shared objectives that transcend (but still include) individuals’ interests. This cohesion at the top-level cascades throughout the organization, fostering alignment and purpose during transformative times.

Retention is critical during transitions, making effective succession planning and career development essential. Strategic HR leaders establish clear career ladders and advancement opportunities to reassure valuable employees that their futures remain bright despite ownership changes. These structured development paths not only retain top talent but also maintain engagement during transition periods across the enterprise when motivation might otherwise waver.

The internal communication strategy during transitions is crucial. HR leaders will collaborate with the leadership team to develop comprehensive communication plans that maintain transparency while managing sensitive information appropriately. Facilitating regular and honest updates from all company leaders helps prevent rumors and speculation that can damage morale.

The difference between successful private equity acquisitions and failed ones often lies in the ability to harness the talent and potential of everyone in the organization.  Strong HR leadership can transform potential disruption into opportunity, helping companies navigate transitions with the right talent, aligned leadership, clear succession pathways, and an engaged team — positioning the organization for the sustainable growth that private equity investors demand.

by Jim May, Associate Partner

In today’s business landscape, the performance of HR and finance is more interconnected than ever. Therefore, it is essential for the Chief Human Resources Officer (CHRO) and the Chief Financial Officer (CFO) to prioritize building a strategic and mutually beneficial alliance.

The CHRO and CFO have become crucial partners at the core of every successful organization. Companies face the challenges of attracting and retaining talent, enhancing business value, and managing budgets. This partnership is not just beneficial—it’s a competitive advantage.

Whether it involves aligning talent investments with business objectives or navigating economic uncertainties, building a strong working relationship between Human Resources and Finance leaders is increasingly important.

3 Reasons the CHRO-CFO Partnership is Critical 

Traditionally, the roles of the CHRO and CFO operated in silos, with finance focusing on costs and HR concentrating on people. As the influence of the CHRO has increased within the C-suite, the importance of their partnership has grown.

The CEO/CHRO/CFO Triad: A Strategic ‘Three-legged Stool’

More and more, CEOs are turning to the combined insights of their CHRO and CFO to shape organizational strategy. These two roles are among the executive team members most likely to maintain a broad perspective across the enterprise. While functions like marketing, IT, and legal often operate in isolation, HR and finance leaders manage people and budget processes that necessitate collaboration and cross-functional insights.

“I’ve had many CEOs tell me that their ‘three-legged stool’ of leadership consists of themselves, their CHRO, and CFO,” Tom Wilson, Partner and Technology/Digital Practice Leader. “It’s a good complementary team because you don’t want the organization to over-focus on either the finance or talent aspects of the business.”  

This leadership triad enables businesses to align workforce planning with financial strategy, creating a more agile organization that can effectively respond to internal and external challenges.

CHRO Influence on the Rise

Chief Human Resources Officers have gained significant influence over organizational strategy, a trend that has been accelerated by the pandemic. According to LinkedIn, the CHRO role is one of the fastest-growing positions in the C-suite. Fortune reports that 13% of HR executives at S&P 1500. companies were among the top five highest-paid C-suite positions in 2022 (up from 0.5% in 1992).  

A PwC survey reveals that 60% of CEOs consider their CHRO to be a crucial strategic partner in decision-making, second only to the CFO. This increasing alignment highlights a growing recognition that effective talent management goes beyond just managing people; it plays a vital role in ensuring the company’s future competitiveness and sustainability.

Talent as a Strategic Priority

Talent is usually a company’s largest investment, with workforce costs accounting for the biggest overall expense, comprising 70% of total expenditures. These costs include not only salaries and benefits but also expenses related to recruitment, training, and employee retention. Given these figures, it’s essential to manage people-related expenses as strategically as other business investments.

When the CHRO and CFO work together, they can effectively manage the organization’s most significant asset while also controlling its largest expense.

HR and Finance Leaders are Linked by Key Processes 

The chance for HR and finance to collaborate starts with key organizational processes that intersect their areas of responsibility.

Strategic Hiring and Workforce Management

Hiring a CHRO often requires significant input from the CFO, particularly when planning for future workforce needs.  Beth Ann Namey, a Partner, explains that “The CFO is often involved at some point in the CHRO recruiting process, occasionally from the very beginning.” This involvement is especially important when hiring a CHRO for a public company, as “the CFO typically seeks a strategic business partner, rather than someone who merely administers the HR systems, processes, and records.” 

Once the CHRO is in place, effective strategic workforce management necessitates collaboration between the HR and finance departments. This collaboration is essential to align the organization’s talent requirements with its financial capabilities. A strong partnership between HR and finance is crucial for the budgeting process, forecasting skill needs, and managing operational processes.

Payroll and Compensation

Payroll is an area that requires close collaboration between finance and HR. Although payroll often falls under the finance department in many organizations, HR plays a crucial role in providing the data needed for compensation models. Aligning these two functions is essential for the company to stay competitive in attracting and retaining talent while avoiding budget overruns.

Success Story: A CHRO and CFO Join Forces in a Fast-Growth Startup 

We found a compelling example of a partnership between a Chief Human Resources Officer and a Chief Financial Officer in our work with a fast-growing startup. In this case, the CFO and the HR leader, both tech-savvy, collaborated to create a workforce planning process that closely aligned with the company’s financial forecasting. Since the company is data-driven, it’s essential for them to anticipate future talent needs in advance to remain competitive in their industry.

This collaboration resulted in a workforce planning system that not only supports the company’s rapid growth goals but also adheres to the financial parameters established by leadership. As a result, the company has been able to maintain a competitive edge in talent acquisition, successfully recruiting top tech talent and leaders while managing costs effectively. This approach has provided clarity within the organization regarding where to add or relocate talent, thus avoiding costly hiring campaigns that do not align with the company’s overall objectives.

Risks When There’s a Gap in HR-Finance Leader Alignment 

When the CFO and CHRO aren’t on the same page, the organization can face significant operational challenges.  

• No alignment: A company experienced challenges due to separate budgeting and hiring processes. Without proper alignment, financial resources were allocated without considering essential talent needs. As a result, the firm faced unfilled positions and operational inefficiencies.
• Over-emphasis on operations: In another company, operations were prioritized over people, leading to several issues. This approach resulted in high employee turnover and uncompetitive salaries. When talent is considered less important than other business priorities, a company may face high attrition rates, low morale, and challenges in attracting top talent.

Why Do the CHRO and CFO Need Each Other?  

Human capital costs usually represent a company’s largest expense, making the CHRO-CFO partnership essential for managing this significant investment.

When financial and talent strategies are not aligned, companies miss out on opportunities for growth, cost savings, and enhanced productivity. For instance, entering new markets requires not only financial resources but also the right talent to achieve success. Without a strategic workforce plan developed through collaboration across functions, individual business units may waste resources on recruiting, hiring, and firing employees, all while failing to align their efforts with the company’s long-term goals.

Today, the best CHROs are as HR performance- and business-minded as they are people-focused.  

Similarly, CFOs must aim to develop a deeper understanding of how investments in talent can impact the bottom line. 

Summing It Up: 3 Key Steps for a CHRO and CFO Partnership

1. Understand Each Other’s Role 

The CHRO needs to have a strong understanding of financial metrics and how they connect to the company’s overall business strategy. With the increasing reliance on artificial intelligence in human resources, as well as HR technology and analytics, HR leaders must adopt a more data-driven approach. This expertise will enhance their collaboration with the CFO.

Similarly, the CFO should recognize how investing in talent can lead to long-term financial success. Their career advancement will be more significant if they focus not only on numbers but also gain insights into the human aspects of the business.

2. Lean Into Workforce Planning

Workforce planning should be a strategic, iterative process where HR and finance constantly collaborate to prepare for growth and contraction. This requires long-term thinking and decision-making backed by data. 

If HR and finance are well-synced in planning, the organization is prepared for growth, or if necessary for cutting back; changes are anticipated.  

3. During Growth Phases, Put Critical Priority on Alignment

In fast-growing companies, such as startups, alignment between HR and finance becomes even more critical. 

For example, in one financial technology company, the Head of Total Rewards reports directly to the CFO while also having a dotted-line relationship with the CHRO. This structure recognizes that managing labor costs—an important factor in the company’s expansion plans—is done strategically.

Conclusion 

The Chief Human Resources Officer and Chief Financial Officer can benefit significantly from forming a strategic partnership that aligns their HR and finance strategies. This collaboration has become essential for driving long-term success.

If your organization is looking for a CHRO or CFO, our executive search experts can assist you in identifying and recruiting a leader who not only understands these dynamics but also meets your company’s unique needs. A well-matched CHRO-CFO team can effectively manage both human and financial capital, propelling your business forward.

Whether your organization is a new startup with 50 to 100 employees—now hiring your first People leader—or a “tech unicorn” company with over 500 employees experiencing rapid growth in preparation for an IPO, Buffkin / Baker offers specialized C-suite and HR consulting services tailored for startups. We partner with startups and unicorn companies on C-suite, board, and HR executive searches.

With over 25 years of expertise working with more than 400 venture-funded startups, we can help you find your first Head of People, transition that role to Chief People Officer, and build out HR teams with other essential HR positions. Additionally, we provide interim People and HR leaders while conducting your search.  Our HR consultants are well-equipped to assist startups in expanding their C-suite and senior leadership teams as they navigate various stages of development.

We have supported companies in almost every hot technology sector by ensuring they have the right executive talent and leadership. We also offer venture capital investment and advisory services to many.

Within the technology sector, we have collaborated with over 50% of the leading companies in the following areas: Internet, e-commerce, Ad Tech, EdTech, construction technology, Health Tech, and social media. As HR consultants for startups, we can help you:

• Perform needs analysis and strategic planning
• Translate business plans into HR plans
• Define leadership roles and job descriptions
• Manage and support the executive team through their first People and HR hire
• And much more

Unsure about what you truly need at this stage of your organization’s growth? Reach out to us, and we’ll work together to determine the right strategy for you.  

Buffkin/Baker offers a key feature in our human resources consulting and advisory services by providing part-time and full-time interim HR consultants. These professionals can serve as temporary Chief Human Resources Officers (CHROs) or Heads of HR/People within client organizations. Our HR contractors are fully screened and vetted, ensuring they are experienced interim executives. They possess the specific expertise and skills needed to quickly integrate into new organizations, add value, and become productive from day one.

A short-term or interim executive is an experienced professional who temporarily steps in to offer stability, leadership, and guidance during periods of change. There has been a notable increase in the demand for interim executives, with estimates suggesting that it has doubled since 2022.

When hiring an interim HR consultant, it’s essential to select someone who can seamlessly integrate into your organization, grasp your culture and expectations, understand your software and programs, and provide immediate leadership consulting and support—without any learning curve or delays. At Buffkin/Baker, we work with candidates whom we have known for many years and have established trusting relationships with. Many of our HR consultants join us after retiring from full-time careers and continue to work with us for the next 10-20 years, focusing on leadership consulting, interim executive roles, and staffing.

We use the same executive search process and methodologies that we utilize in our executive recruiting practice to determine our clients’ needs and to screen and match HR contractors to our clients.  

Why Choose Us?

We understand the changing needs of today’s workforce and are committed to helping our clients create environments that promote talent development. Experience the difference a skilled and dedicated team of executive recruiters can make in your search for HR leaders. Let Buffkin / Baker help you in finding and retaining the talent required to stay competitive in today’s market.

The competition for talent is intensifying due to increasing globalization and a persistently tight labor market, with numerous organizations competing for the same scarce top talent. In this competitive landscape, Talent Acquisition executives play a vital role in enabling organizations to effectively recruit the talent necessary for success and growth.

Today’s workforce seeks more than just strong compensation and total rewards; they desire inclusive and diverse environments where their contributions are recognized, their voices are valued, and their career development is supported. Companies that can offer these attributes are more likely to attract and retain top talent, thereby gaining a competitive advantage in the market.

A Talent Acquisition executive plays a crucial leadership role in driving strategic initiatives to identify, attract, and secure top talent for an organization. They oversee the talent acquisition team, formulate effective recruitment strategies, and deploy best practices throughout the hiring process. This position demands a deep understanding of the company’s long-term workforce requirements, the ability to leverage various sourcing channels, and the skill to cultivate relationships with prospective candidates.

Talent Acquisition executives play a pivotal role in ensuring that organizations attract and retain top talent by effectively managing candidate pipelines, conducting high-level interviews, and negotiating job offers. Their strategic vision and market insights are essential for driving organizational success through the development of a strong and capable workforce.

Recruiting Talent Acquisition Executives: Our Track Record and Deep Expertise

At Buffkin/ Baker, we excel in identifying exceptional Talent Acquisition leaders capable of advancing strategic initiatives. Our thorough executive search process enables organizations to recruit TA leaders who align perfectly with their needs, fostering the development of strong, cohesive teams that drive long-term success and innovation.

Are you a Talent Acquisition Professional?

At Buffkin / Baker, we recognize the distinct challenges and pressures that Talent Acquisition leaders encounter in a competitive landscape. We collaborate closely with the TA department to enhance your recruitment strategies and support you in reaching your strategic hiring objectives.

Here’s how we can assist you:

• Collaborative Strategy Development: We partner with you to create a customized recruitment strategy that aligns with your organization’s vision and staffing requirements. Our expertise in executive search enables us to identify the specific skills and qualities you desire in top-tier candidates.
• Extensive Network: Our expansive network of industry leaders provides you with access to a diverse pool of highly qualified candidates. We utilize our connections to source and attract talent that may otherwise be difficult to reach.
• Streamlined Hiring Process: We manage the entire hiring process, from sourcing and screening to conducting thorough interviews and negotiating offers. This allows you to concentrate on your core responsibilities while we manage the complexities of executive recruitment.
• Market Insights and Trends: Stay ahead of the competition with our insights into market trends and talent availability, ensuring you remain informed about industry developments.
• Confidentiality: Our professional approach ensures that all interactions and candidate searches are conducted with the highest level of discretion, safeguarding your organization’s reputation and strategic interests.
• Candidate Care: recognizing that we are operating as an extension of your organization’s talent brand, we deliver exceptional candidate experience that enhances our network and allows us to deliver candidates to you that other organizations might not have access to.

Why Choose Us

We recognize the dynamic demands of the contemporary workforce and are dedicated to assisting our clients in cultivating environments that foster talent development. Experience the impact that a highly skilled and committed team of executive recruiters can have on your next search for a Talent Acquisition leader. Allow us to support you in attracting and retaining the talent necessary to maintain a competitive edge in today’s market.T