Aligning Finance and HR Functions: A Strategic Synergy Essential for Corporate Performance in France

An article written by Jamel-Cédric LEMA (Engagement Manager, Althéa) and Justine PERRON (Engagement Manager, Althéa)

In 2025, French companies are operating in an environment deeply marked by unprecedented challenges: a series of exogenous shocks (persistent geopolitical conflicts, trade tensions, structural inflation, regulatory instability, etc.) is exacerbating operational and budgetary uncertainties.

These dynamics are added to traditional financial management imperatives (cost reduction, trade-offs between fixed and variable costs, continuous margin improvement, etc.), which are becoming increasingly sensitive to human resources management issues and, more generally, to profound transformations in the labor market (long-term recruitment tensions, changing salary and social expectations, accelerated hybridization of work modes, etc.).

In this context, the ability to anticipate, size, and effectively mobilize human resources is becoming a major competitive issue. However, a paradox is intensifying: even as the sustainability of companies increasingly depends on mastering their costs and human capital, payroll—which constitutes both one of the main cost items and a direct reflection of the company’s capacity and human strategy—remains poorly integrated into strategic management mechanisms. This paradox reveals a functional misalignment between the Finance Department (CFO) and the Human Resources Department (CHRO).

What are the real stakes surrounding this structural paradox? What methodological differences oppose the HR and Finance functions, and what levers can enable the orchestration of a real convergence between the two visions?

In this article, Althéa proposes a methodological framework focused on the analysis of payroll as a pivotal indicator of capacity, economic, and social performance.

The Economic Reality of Payroll

Payroll is a major financial issue for French companies. In labor-intensive sectors (healthcare, services, education, administration, construction, retail, etc.), it can vary between 60% and 80% of fixed costs (INSEE, ESANE, 2022). Even in more capital-intensive sectors (energy, rail and air transport, heavy industry, etc.), wage dynamics weigh heavily on operational balances.

At the same time, so-called G&A (General & Administrative) functions, which include support functions (HR, Finance, Marketing, Legal, etc.), face an increasing demand for rationalization. Nearly 70% of management teams require a 10% to 20% reduction in G&A costs (McKinsey, Preparing for the future of SG&A, 2023).

54% of CFOs surveyed state that alignment between budget forecasts and actual workforce movements is a major challenge for their organization. This difficulty is often attributed to disconnected planning processes between HR and Finance departments, as well as limited access to real-time data (Deloitte, CFO Signals, Q1 2023). For executive committees, this information asymmetry results in difficulty reliably projecting their capacity trajectory over 6, 12, or 24 months.

Payroll is therefore a doubly critical management object: on one hand, an efficiency lever for budgets and, on the other, a strategic indicator of the sustainability of HR trajectories. It is therefore essential to understand it.

A Dual Definition for the Same Object

Payroll is, on the surface, a concept common to all company functions. However, its operational definition varies significantly depending on the lens through which it is approached.

A Finance Department aims to monitor, ensure the reliability of, and optimize major cost items, which must be anticipated, controlled, and aligned with the company’s economic objectives. Specifically, it focuses on:

• Budgetary payroll: approved budgets by cost center, scope, or activity;
• Accounting payroll: gross salaries, employer contributions, provisions (paid leave, profit-sharing, bonuses, etc.), IFRS adjustments (where applicable);
• Variances between forecast and actual and their impact on the income statement or performance by analytical axis (BU, OU, PC);
• Volume, price, and/or mix effects: variations in headcount (volume), salary increases (price), distribution of professions/positions/entities (mix).
  

An HR Department, meanwhile, aims to manage human resources according to the organization’s needs, HR strategy, and internal social balances. It thinks more in terms of:

• Physical headcount or FTEs (full-time equivalents): by contract type, status, entity, or population;
• Standard cost per head: often limited to annual gross including social charges, without accounting adjustments;
• Operational HR indicators: recruitment, turnover, mobility, promotions, absenteeism, age pyramid, gender equality index, etc.;
• Individual and collective budget allocations: Mandatory Annual Negotiations, profit-sharing agreements, benefits in kind, salary policy, etc.

For a Finance Department, payroll is therefore a structured financial aggregate, integrated into operating expenses, and analyzed primarily from a total cost perspective, while for an HR Department, payroll is a dynamic consequence of HR policy that reflects the actual organization of work, social commitments, and attractiveness and retention policies. This semantic and methodological gap contributes significantly to misunderstandings between Finance and HR functions and to the difficulty of implementing converged management.

The Stakes of Structural Misalignment Between Finance and HR

a. A Cultural and Technical Separation

Beyond semantics, this situation is largely rooted in a historical and often cultural disconnection between HR and Finance functions. Each operates according to its own logic, its own frameworks, and its own tools. Added to this is a technical dissonance related to the often complex integration between HRIS (Human Resources Information System) and EPM (Enterprise Performance Management) tools.

Indeed, as its name suggests, the HRIS refers to a set of technological solutions designed to improve administrative efficiency, ensure the reliability of HR data, and support HR practices. It allows for the management of HR processes in an automated, structured, and centralized manner and covers:

• Administrative Management: employee files, contracts, hiring, and offboarding;
• Time & Attendance Management: scheduling, attendance and absence, working hours, calculation of variable pay elements;
• Payroll: payroll calculation, social declarations, payslips; Talent Management: recruitment, annual reviews, training management, Strategic Workforce Planning (SWP);
• HR Reporting: legal reporting, dashboards, headcount, turnover, age pyramid.

EPM tools allow for the consolidation, harmonization, and analysis of financial and operational data, as well as the modeling and simulation of complex scenarios. They offer companies robust anticipation capabilities for informed decision-making (see Article Managing Financial Performance in the Face of 2025+ Challenges).

Poorly integrated HRIS and EPM tools result in HR data that is often manually extracted, poorly consolidated, sometimes inaccurate or obsolete, and above all difficult to translate into usable financial models. Many groups still rely on multiple Excel files, “bridges” between time management, payroll, budget, and HR forecasting, and manual validation loops. This difficult (and/or absent) integration slows down decision-making processes and considerably reduces the ability of management to perform simulations. The manual, and often uncontrolled, management of these Excel files further accentuates the instability and lack of reliability of HR data, making its use complex and potentially imprecise.

b. What We Don’t Manage Together, We Suffer Separately

This misalignment is not just a matter of tools or processes. It reflects a low level of mutual recognition between two functions that are nonetheless strategically interdependent. The Finance function, focused on performance and profitability, sees headcount as a cost variable to be optimized. The HR function, attached to the human dimension, perceives financial indicators as unrepresentative of the operational and social reality on the ground.

This lack of synergy makes payroll a blind spot in strategic management, at the intersection of two logics that struggle to meet, resulting in:

• HR budgets that are poorly anchored in the company’s actual financial trajectory and budget forecasts disconnected from headcount realities;
• Fragile financial forecasts, sensitive to unpredicted or poorly anticipated HR contingencies (for example, a fuller-than-usual order book will lead to overtime or reinforcement (CDD, temporary, etc.) and conversely, when it is less full, the financing of partial activity);
• Difficulty in objectifying certain capacity trade-offs, especially in high-stakes decision-making scenarios (downsizing, hiring freezes, rapid transitions, etc.).

In a world where speed of adaptation is becoming critical, this disconnection can lead to lost opportunities, financial and social risks, or long-term hidden costs. It is more than crucial to have a management method common to both departments.

Methodology: Toward Integrated HR-Finance Convergence

The previous sections highlight a lack of cross-functional governance. Indeed, in most organizations, decisions regarding headcount, recruitment, or salary increases remain siloed. To build functional convergence, it is essential to clarify roles and responsibilities, define a common language, and structure this governance around perfectly integrated tools:

a. Definition of Roles and Responsibilities

Effective HR-Finance governance relies on a clear distribution of responsibilities around three key moments:

• Le suivi du réalisé (ou de l’exécution) : il s’agit de fournir une photographie fidèle de la situation actuelle de la masse salariale et des effectifs de l’entreprise à un instant T. C’est le socle de toute démarche de pilotage, car il permet de :
  • Comparing budgeted headcount and actual headcount;
  • Analyzing variances between forecast and actual payroll, by identifying causes (unplanned recruitment, entry delays, unanticipated increases, prolonged absenteeism, etc.);
  • Ensuring the reliability of HR databases (time management, payroll, movements, statuses, salary scales), to guarantee the integrity of financial and operational reporting.
    
    
• La prévision de la masse salariale : Elle désigne l’ensemble des mécanismes permettant de projeter les coûts salariaux futurs, sur des horizons de temps (plus ou moins longs en fonction des entreprises), en intégrant les hypothèses RH et économiques. Elle repose sur :
  • Recruitment, mobility, and departure plans defined by HR (12-month hiring plans, age pyramid, expected turnover rate);
  • Economic or regulatory assumptions integrated by Finance (salary inflation, changes in social charges, Mandatory Annual Negotiations, automatic increases);
  • Transformation scenarios: creation of new BUs, organizational changes, mergers, outsourcing projects, etc.
    
    NB: The most mature companies integrate these elements into an HR-Finance rolling forecast, updated periodically and connected to their EPM tools.
    
    
• Pilotage stratégique : au-delà du suivi et de la prévision, l’objectif est de faire de la masse salariale un levier d’allocation des ressources et de performance durable, en articulant l’intention stratégique (où veut-on aller ?) avec les moyens humains et financiers disponibles (que peut-on réellement mettre en œuvre ?). Cela implique :
  • Sizing HR plans in line with the corporate strategy (international deployment, digitalization, team upskilling, relocation, etc.);
  • Arbitrating payroll allocations by activity, profession, or geographic area according to their contribution to value (“strategic human capital” approach);
  • Formulating capacity and budget recommendations based on scenarios simulated in the EPM tool, allowing for the evaluation of the HR impact of strategic decisions (launch of a new offer, reorganization plan, merger and acquisition, etc.).
    
    

b. Establishing a Common Language

Another difficulty lies in the absence of a common language. HR and Finance speak of the same reality but according to terminologies, indicators, and timelines that are often incompatible.

A common language relies on three fundamental pillars:

• Standardization of key indicators: precisely and jointly defining the concepts of FTE, gross payroll, total cost per head, etc. This also involves harmonizing scopes (payroll scope vs. consolidated group scope) and units of measurement (hours, day, month, year);
• Alignment of timelines: synchronizing HR cycles (often annual or semi-annual) with the CFO’s budget and forecast cycles (12 or 18-month rolling forecast, quarterly business reviews). A mature HR-Finance company is capable of thinking on the same rolling horizon (which allows for the integration of HR assumptions into financial forecasts);
• Use of shared frameworks: adopting a common nomenclature for positions, job families, organizational entities, etc. This ensures consistency between data from the HRIS, payroll, EPM, and financial ERPs.

Best practice: formalize an HR-Finance Charter (internal Wiki), a structuring document that records calculation conventions, management rules, cross-functional responsibilities, and procedures for reviewing assumptions.

c. BI, EPM, and Finance IS Tools as Catalysts for HR-Finance Integration

When properly configured, BI, EPM, and Finance IS tools allow for the reporting of historical trends from actual HR data, the reconciliation of the functional HR and Finance visions, and the simulation of capacity trajectories. Native integration of HR data allows for real-time simulation of business impacts:

Examples of some use cases:

• Consolidated reading and near real-time monitoring of social KPIs from an HR dashboard;
• Workforce modeling : simulation of hiring scenarios, payroll evolution, compensation policies, etc.;
• Native integration of HR and financial data: automation of flows between payroll, HRIS, budget databases, and job frameworks;
• Business impact simulation: evaluation of the impact of a change in headcount on EBITDA, absenteeism rate, time-to-fill, etc.

Best practice: define an HR-Finance Data Hub, integrated into the EPM tool, centralizing payroll, HRIS, SWP, and budgeting data to ensure a single source of truth for all capacity projections.

Risks and Sector Specificities

Payroll management cannot be thought of independently of the sector context in which the organization operates. Budgetary constraints, regulations, statutory or contractual flexibility, and the maturity of management tools vary significantly from one sector to another. Added to these specificities are risks (methodological, technical, and project) that must be taken into account.

a. Public Sector: Constrained Management, Reduced Room for Maneuver

In central administrations, public institutions, and local authorities, payroll management is governed by the LOLF (Organic Law on Finance Laws), and more specifically by Chapter 012, which includes all personnel expenses.

This budgetary architecture imposes:

• Rigid formalism of budget cycles: forecasts must be validated upstream by deliberative councils (municipal councils), with exceptional room for maneuver (modifying decisions) during the year;
• Low flexibility on headcount: mobility is administrative, not managerial, and salary evolution is strongly linked to seniority or statutory scales (categories A, B, C);
• Partial data opacity: in some local authorities, HRIS are poorly interoperable with financial tools (for example, Astre), and consolidations are still largely done in Excel;
• Integration of political risk related to the storage and management of HR data of agents, particularly in connection with digital sovereignty requirements and institutional sensitivities.

The result is siloed, inflexible management with a high risk of chronic inefficiency. More than 65% of local authorities with over 50,000 inhabitants do not have a rolling HR-Finance forecast (Observatory of the Territorial Public Service, 2024), making multi-year trade-offs almost impossible.

b. Private Sector: Agility Required, but Multiple Risks

Private sector companies theoretically have more room for maneuver in human resources. They can recruit, reorganize, outsource, or freeze hiring as needed. But this apparent agility hides several vulnerabilities:

• Strong competitive pressure, especially in low-margin sectors (retail, transport, industry), where any salary drift or poor headcount anticipation can have an immediate effect on operational profitability;
• Complex HR transformation issues: hybridization of professions, team upskilling, adaptation to new work modes (teleworking, freelancing), digitalization of HR processes;
• Poorly controlled indirect costs: absenteeism, turnover, chronic understaffing, team overload; these so-called “hidden” costs can represent up to €10,000 per employee per year in labor-intensive sectors (Ayming Barometer 2024).

The major risk is therefore not inertia, as in the public sector, but the volatility of HR balances and the lack of tools to anticipate their effects on financial performance.

c. HR-Finance Risk Mapping: Cross-Functional Typology

Beyond sector specificities, any organization managing its payroll may face other types of risks:

A study conducted by McKinsey in 2022 on a panel of 250 large European groups shows that 60% of HR transformation projects fail to produce a measurable impact, primarily due to the lack of alignment with Finance functions and insufficient consolidated forecast data. Consequently, it is essential for organizations to carefully plan these alignment projects, invest in appropriate solutions, and ensure that the relevant teams collaborate effectively to overcome these challenges.

Comparative Advantage of a Firm Like Althéa

In a consulting landscape often structured in silos, Althéa stands out for its hybrid positioning: its historical DNA consisting of HR expertise, and its expansion into Finance functions over the last decade, give it a completely integrated cross-functionality from strategic diagnosis to project management assistance (AMOA) and change management support:

• Dual HR-Finance Competence: Althéa teams combine an understanding of HR issues (mobility, age pyramid, SWP) and mastery of budgetary logic (rolling forecast, total cost, G&A budgets), facilitating dialogue between CHROs and CFOs from the scoping phases;
• Ability to Industrialize Management: Althéa masters the main EPM solutions (Anaplan, Tagetik, Oracle) and HRIS (Workday, SAP SF), with strong expertise in interoperability, headcount modeling, and capacity forecast automation.
• Diverse Sector Experience: Local authorities, public institutions, industrial or service groups: Althéa adapts its approaches to the regulatory, budgetary, and social constraints of each sector.
• Results-Oriented Methodology: Implementation of HR-Finance committees, formalization of common charters, data reliability, monitoring of gains.

Do not hesitate to contact us to discuss your challenges!