Personnel costs sit at the top of almost every company’s P&L. Number one or number two operating expense, every single year. Yet in most boardrooms, the person responsible for those costs is still making the case for why they deserve a seat at the financial table. Jamie Durling thinks that framing is the problem. Chief People Officer (CPO) and transformation partner for global brands including Moncler Group and Stone Island, Durling has spent his career operating at the intersection of people leadership and commercial performance. His position on where HR stands in the financial conversation is unambiguous. “HR is the conductor of the orchestra,” Durling says. “They are not fighting for a seat at the table. They are running it.”
The CFO Is the CPO’s Most Important Relationship
Most HR leaders underinvest in the relationship that matters most to their commercial credibility. The chief financial officer (CFO) is not a gatekeeper to navigate around. When the CPO and CFO operate in lockstep, organizations move with a clarity and speed that neither function can produce independently. The entry point to that relationship is financial fluency. “HR leaders don’t need to be CFOs,” Durling says, “but they do need to understand the impact of their actions on organizational profitability.”
Personnel costs are the most controllable major line item on the P&L. The CPO who can demonstrate that control, and connect it directly to earnings before interest, taxes, depreciation, and amortization (EBITDA), earns a different kind of attention from leadership. Especially when EBITDA links directly to variable compensation. “When it comes to dollars and cents, people listen when it impacts themselves,” Durling says. Turns out self-interest is a remarkably effective alignment tool.
The Angel, The Devil, and Better Decisions
Durling describes his own advantage with characteristic directness. Having led both operations and HR gives him what he calls an angel on one shoulder and a devil on the other. The HR lens pushes toward doing right by employees. The operational lens pushes toward efficiency and profitability, sometimes at the cost of the former. The tension between them is not a problem to resolve. It is a source of sharper decisions.
When a product is not selling, most leaders look at the product. Durling looks at everything. Training issue? Merchandising problem? Wrong sizing? Misaligned incentives? Poor timing? “Having the operating lens gives an HR professional the information and the ammunition needed to make informed decisions,” he says. That holistic diagnostic, whether the organization sells pharmaceuticals, luxury leather goods, or consumer technology, separates people leaders who influence commercial outcomes from those who report on them after the fact.
Stop Calling It an Expense
The single most consequential change Durling would make to how organizations report on their people to boards and investors is linguistic. Stop using the word expense. Start using the word investment. Expenses imply cost. Investments imply return. When a board sees training spend, compensation structures, total rewards, and long-term incentives framed as investments, the conversation shifts from how much are we spending to what are we getting back. That is a fundamentally more useful conversation.
“Here is what we invested in,” Durling says. “Here is the outcome.” Tracking those investments year on year and correlating them to organizational performance does not prove causation. Durling is careful about that. External market conditions, product quality, and competitive dynamics all play a role. The correlation is real, however, and boards that see a consistent relationship between people investment and profitability will start treating it accordingly. “If HR leaders can create direct lines between people investments and profitability, boards will listen. Investors will listen.”
The turnover cost question illustrates precisely why this reframe matters. Replacing one employee can cost double their annual salary. Most organizations know the statistic and do nothing with it because the cost feels hypothetical until the employee actually leaves. By then, the financial damage is already done. The organizations that treat potential turnover as a balance sheet risk, rather than a future hypothetical, invest in proactive enablement rather than reactive scrambling. Prevention, it turns out, is considerably cheaper than replacement.
The Language That Opens the Door
The vocabulary of HR has historically kept it at a distance from the financial conversations that determine organizational direction. Investment, outcomes, profitability. These are the words that close that distance. Not because they make HR sound more like finance, but because they accurately describe what effective people leadership actually produces. If you start linking people to profitability and put it in terms that boards really understand,” Durling says, “they will listen.” The CPOs getting that right are not fighting for credibility. They already have it, because they learned to speak the language that makes the impact of their work impossible to ignore.
Follow Jamie Durling on LinkedIn for more insights on HR metrics, financial impact, and strategic people leadership.
