Making the Right People Investments: 4 Critical Factors to a Great Relationship with HR

Finance and HR haven’t always seen eye to eye. Your role is to keep costs under control; HR’s is to advocate for people investments — spending that doesn’t always translate into a clean ROI.

Now, that old divide is narrowing. With AI adoption accelerating, managers stretched thin, engagement slipping, and leaner teams expected to deliver more, both functions are converging on the same goal: people strategies with numbers everyone can trust.

Why People Investments Are Important Now

Fortunately, there are ways to get finance and HR aligned so your workforce is prepared for the future.

“When workforce development is tied to solving real business challenges, development moves from being viewed as an expense to being recognized as a strategic business investment,” says Jolen Anderson, Chief People and Community Officer at BetterUp.

The numbers make the stakes hard to ignore. BetterUp analyzed behavioral data from 410,000 employees and found a 2% to 6% drop in work performance since 2019, translating to an estimated $2.2 trillion in lost performance across five years.

“Workforce development isn’t simply about building skills; it’s about restoring the capabilities, such as purpose and a growth mindset, that drive business performance,” says Anderson.

The Risks of Not Investing

If the promise of a developed workforce isn’t enough to convince you to approve promising people investments, the risks of not doing it should cause a pause.

“One of the biggest mistakes organizations can make is viewing development as discretionary spending rather than a capability-building investment,” says Anderson.

“When companies reduce investments in workforce development, they often weaken the very capabilities, like employee agency and adaptability, they need to navigate change,” she continues. “Over time, that can lead to leadership gaps, weaker succession pipelines, lower engagement, reduced innovation, and greater difficulty adapting to new business challenges.

Naturally, those risks don’t appear immediately on a balance sheet, but they can have a significant impact on long-term performance and competitiveness.

“The strongest workforce strategies are built when HR and finance are working from the same understanding of what the business needs to achieve over the next several years,” says Anderson.

So you want to build a great relationship with HR and work together to make the best possible people investments. Here are four important factors.

1. Focus on the Long-Term

When investing in people and development, leaders often think about short-term needs — being able to handle updated software, different client needs or new equipment. So they make a marginal investment for the short-term need.

And that leads to the above-mentioned risk of not investing or investing too little.

Instead, when you’re assessing people investments, think beyond what’s needed now.

“Take a long-term view,” says Anderson. “Organizations should regularly evaluate which capabilities will be most critical to future success and ensure they continue investing in those areas, even during periods of economic uncertainty.”

Unless there’s a safety issue or risk of losing a client, consider the long-term needs, opportunities and possibilities when the need to invest in people and development arises.

2. Share the Important Data

HR leaders usually think people-first, while you think numbers-first. But you have this in common: You want your people and your organization to succeed.

That’s why you want to share with HR where the business is headed and where the greatest opportunities and risks exist. And take the time to understand their people metrics.

“Sharing that perspective is one of the most valuable contributions (finance pros) can make to talent planning,” says Anderson. “When CHROs have visibility into growth priorities, productivity goals, operational challenges and areas of strategic importance, they can make more informed decisions about where development investments will have the greatest impact.”

3. Emphasize Outcomes

Help your HR colleagues refine their ask by encouraging them to consider the business challenge their training and development program can fix.

For instance, most organizations are already focused on improving productivity and reducing turnover. When you share your business insight, HR pros will know to gear their development ideas toward those goals.

“The question isn’t whether employees completed a course, but whether the organization can measure meaningful behavior change and connect that change to progress against its business objective,” says Anderson.

4. Get Involved Early

Whether HR comes to you directly with people investment ideas, or you hear about ideas more informally, the sooner you step in, the more successful the plan will be.

“Establish clear expectations around outcomes and accountability from the outset,” says Anderson. “That shared ownership leads to better decisions, stronger alignment, and ultimately a workforce that’s better prepared to support the organization’s long-term goals.”