An Idea to Manage HR Risk – Your Outsourced CFO
What do you get with an outsourced (fractional CFO)? The services typically provided are:
Those results are difficult to quantify until you have gained confidence in that resource – just because someone has been a CFO doesn’t mean that person is the right fit for you.
Owners looking to get to the next level are now focusing on a more well-rounded executive who can bring financial and business acumen. For owners, It’s a chance to engage with someone who, over time, can become a trusted advisor – a sounding board.
That trust is earned by helping you make better decisions that include the whole business, not just the financial impact.
What Else Should You Expect?
A CFO is an executive position, someone who can quickly interpret financial information regardless of the time spent - one day per week or one day per month. A fractional CFO must live in two worlds – the world of today (making sure the financial records are right) and tomorrow (helping guide the company with financial advice).
The right fractional CFO for you can live in both worlds and support you in managing the business. By seeking a well-rounded business leader with a financial background, additional responsibility taken on by a fractional CFO gives you more time to grow the business with your unique skills.
Support in Risk Management: People and Systems
In its simplest form, risk management is identifying potential risks and taking steps to mitigate the risk. Risk cannot be eliminated, but it can be managed to an acceptable level depending upon the company’s risk appetite and cost of insurance and other protective measures.
In addition to IT risk, consider how an outsourced CFO can impact HR risk.
HR Risk and a Fractional CFO
Risk management in human resources requires an experienced touch because your employees are a source of risk, and they are responsible for handling risk. Close coordination between human resources and finance is critical to mitigating your “people risk.”
There are several ways that your employees are a source of risk: turnover, poor workmanship, accidents, and dealings with customers and vendors. Your employees’ ways of handling risk are found in solving customer problems, safety on the job, identifying potential talent to join your team.
Many human resources departments suffer from a lack of visibility brought on by an emphasis on compliance instead of acquiring, maintaining, and developing talent. An experienced fractional CFO that has successfully managed the human resources function gives you a new perspective. This executive can understand the financial impact of retaining and investing in the right people and help you have the right people in place for growth.
An experienced CFO knows the best way to invest in the right team members to produce the best results. It’s about cost management – spending the right dollars in the right places to get the right results.
Risk management is a process of balancing the operational and economic costs of protection. An outsourced CFO can bring experience from other businesses to help you balance the risk and the cost.
As you plan your company’s forward progress, try to think beyond the numbers, and identify the right amount of support for financial and non-financial issues.
