Bridging the Gap Between Finance & Talent Management

Globoforce Study Reveals Critical Need for Finance and HR Collaboration; Identifies Chief Talent Officer as Next Vanguard of Corporate Governance

Southborough, Mass., and Dublin, Ireland (Vocus) June 18, 2008 -- Globoforce (http://www.globoforce.com/corporate/eng/), the leading worldwide provider of strategic, on-demand employee recognition (http://www.globoforce.com/corporate/eng/what-we-do/) solutions, today announced the results of its research study that focused on the importance of bridging the gap between the finance and human resource functions to drive success in today's global organizations. The study, which revealed five key findings related to closing this costly gap, illustrated the clear need for more consistent collaboration between finance and HR, specifically with the emerging role of Chief Talent Officer (CTO) as the next vanguard of corporate governance.

The onset of baby-boomer retirement, decades of economic expansion and a tight labor market are creating a critical shortage of seasoned managers. To lessen the impact of these changes, many companies have increased investment in succession planning, employee retention and employee engagement (http://www.globoforce.com/corporate/eng/about-us/). To manage the investment in these efforts, the CFO and the CTO are forging new working relationships to create business cases for processes, programs and technologies that track the financial outcomes.

This study assessed the attitudes of business leaders in Global 2000 companies on the relationship between the CTO and CFO and their mutual role in adapting to these new global workforce trends (http://www.globoforce.com/corporate/eng/innovation-center/).

Key findings of the study include:

• Human Resources Must Take a More Strategic Role in the Business

The role of HR has evolved, and in today's business climate, HR is not only expected to take a more strategic position, but also to quantify work with appropriate metrics and substantiate ROI. The study revealed that although 87 percent of respondents believe that HR should play a more strategic role than in the past, only 63 percent believe HR has the right amount of input in the company's strategic direction. A full 91 percent said it is more important than ever for HR to be accountable for spending, with 88 percent noting that HR must embrace a more metric-based standard for measurement.

* Employee Recognition Drives Engagement and Therefore Impacts Recognition, Retention, Productivity and the Bottom Line

Engaged employees (http://www.globoforce.com/corporate/eng/what-we-do/) are more likely to be high performing employees who are less likely to leave their organization. As such, when asked which HR metrics were most important, the top three responses were employee engagement (71 percent), employee productivity (63 percent) and human capital ROI (57 percent). Respondents were near unanimous (99 percent) when agreeing that they believed that employee recognition improves engagement and productivity.

* Creating a Universal Recognition Platform for Global Companies Is Difficult

The majority of respondents (80 percent) believe that addressing the needs of global employees is difficult, and 58 percent said that creating a universal recognition platform for a global company is difficult. Only 66 percent indicated they have a universal platform for recognition.

* CFOs Are Not Aware of How Much They Are Spending on Recognition Programs

Although nearly everyone agreed that HR and finance need to be on the same page, only 58 percent of respondents say this is the case in their organization. When asked if their CFO was aware of how much their organization spends on recognition programs, only 58 percent said yes. Only 52 percent said there was a metric/plan in place to measure the effect of employee engagement on company performance. Moreover, even though best practice suggests that finance is the business unit that should require ROI, few survey respondents (36 percent) indicated that finance was taking a leading role in HR processes, programs and technologies.

* The CTO and the CFO Must Work Together to Chart the Course for the Future

Survey respondents overwhelmingly said (95 percent) the CTO and CFO should work together to chart a new course for the future. However, a disconnect clearly exists when only 58 percent said this was currently the case in their organization.

"Business leaders understand that HR has the power to transform an organization by taking a strategic view and using technology to implement a measurable employee engagement solution that generates real results," said Derek Irvine, Vice President of Global Strategy, Globoforce. "As this study shows, leaders also understand employee recognition can improve employee engagement and - by extension - their bottom line, shareholder value and customer retention. To get there, it is essential that today's global companies bridge the current gap between finance and HR, empowering these functions to collaborate on this new strategic imperative and ultimately implement a universal recognition platform (http://www.globoforce.com/corporate/eng/what-we-do/how-we-do-it.html) that motivates, retains and attracts great talent."

More than 250 HR and finance professionals from global 2000 organizations participated in the Globoforce survey (http://www.globoforce.com/corporate/eng/news-and-events/press-releases/kits.html). All of the respondents are from organizations with more than 10,000 employees engaged in global operations. More than 80 percent of respondents had responsibilities within the broad category of human resources while 20 percent had responsibilities outside of HR.

About Globoforce

Founded in 1999 and co-headquartered in Southborough, Massachusetts and Dublin, Ireland, Globoforce is the world's leading provider of on-demand, global, strategic employee recognition solutions for Global 2000 companies. Globoforce delivers an innovative, easy-to-use, on-demand software solution that engages employees across the globe, transforming the way enterprises motivate their workforce. Globoforce's blue-chip customer base, which includes Avnet, Dow Chemical, Global Crossing, Fairmont Hotels & Resorts, Intel, Intuit, Nortel, Procter & Gamble and Thomson Reuters, reflects the importance of recognizing and engaging the workforce in the 21st century. For more information, visit http://www.globoforce.com or visit the Company's blog at http://globoforce.blogspot.com/.

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