In most companies, finance and HR have an uncomfortable relationship. Finance wants to control costs. HR wants to hire great people. These goals should align, but often they conflict. Here's how to fix that.

The Traditional Dynamic (And Why It's Broken)

Here's how it usually works:

HR: "We need to hire this person immediately!"
Finance: "Is it budgeted? What's the salary? Why didn't we know about this?"
HR: "The candidate is amazing, we'll lose them if we wait."
Finance: "We need time to review..."
HR: "By the time you approve it, they'll have taken another offer."

Both sides are frustrated. Finance feels blindsided. HR feels blocked. The candidate moves on.

The Root Problem: Information Asymmetry

The real issue isn't goals - it's information. Finance has data HR doesn't see. HR has context Finance doesn't understand.

Finance knows:

Total headcount budget
Burn rate and runway
Budget vs. actual across departments
Financial commitments ahead

HR knows:

Which roles are critical right now
How long it takes to fill different positions
Market rates for specific roles
Impact of delayed hires on the team

When these don't connect, you get conflict.

Solution 1: Shared Source of Truth

Both teams need to see the same data in real-time:

What's budgeted for each department
What's been approved but not filled
What's in process
Where we are vs. plan

When HR can see budget constraints, they make better decisions about which roles to prioritize. When Finance can see pipeline and urgency, they understand why certain requests need fast approval.

Solution 2: Pre-Approved Frameworks

Instead of approving every single hire, finance can set frameworks:

"Engineering has 5 open headcount, salary range $120-180K"
"Any role under $100K doesn't need CFO approval"
"Backfills are auto-approved within 90% of previous salary"

This lets HR move fast on roles that fit the plan, while Finance maintains control on exceptions.

Solution 3: Regular Planning Rhythms

Most companies do annual headcount planning, then scramble the rest of the year. Better approach:

Annual: Set overall headcount targets and budget
Quarterly: Allocate specific roles to departments
Monthly: Review actuals vs. plan and adjust
Weekly: Finance and HR sync on upcoming hires

This prevents surprises and keeps both teams aligned.

Solution 4: Clear Approval Thresholds

Define exactly when Finance needs to be involved:

Auto-approve: Budgeted roles within salary range
Finance review: Roles above $150K or over budget
CFO + CEO: VP level and above

This eliminates the "do I need to ask?" confusion.

Solution 5: Make Hiring Data Visible

Finance should have access to:

Time-to-hire by role and department
Offer acceptance rates
Where candidates are dropping out
Competitor insights on compensation

When Finance understands the hiring market, they make better budget decisions. When HR sees financial constraints, they set realistic expectations with hiring managers.

What Good Looks Like

In companies where Finance and HR work well together:

95%+ of hires get approved within 24 hours
Actual headcount stays within 5% of budget
Both teams know what's coming before it arrives
Approvals are based on data, not politics
Great candidates don't get lost to slow processes

The Payoff

When Finance and HR are aligned:

Finance gets: Predictable costs, fewer surprises, better budget accuracy
HR gets: Faster approvals, clearer priorities, ability to move on great candidates
The company gets: Better hires, lower costs, strategic advantage

The goal isn't for Finance to say "yes" to everything or HR to slow down. It's for both teams to operate from the same playbook with the same information. When that happens, hiring becomes a competitive advantage instead of a source of friction.

How Finance and HR Can Work Better Together