Bridging The Gap: The Power of Cross-Functional Alignment in Public Sector Compensation

In today’s public sector environment, HR and Finance leaders are navigating increasing complexity: rising labor costs, looming retirements, and ever-tightening budgets. At the center of it all is one shared priority — making smart, sustainable compensation decisions. 

But all too often, these two teams work in silos. 

When HR and Finance aren’t aligned, compensation planning becomes reactive. Negotiations stall. Budget goals and talent goals pull in different directions. And opportunities to get ahead of workforce needs quietly slip away. 

So how can agencies bridge that gap? 

The Problem: Same Budget, Different Priorities 

HR and Finance may be working from the same budget, but they often have very different goals and timelines: 

• HR is focused on equity, engagement, and retention — often over the next 6 to 12 months. 

• Finance is focused on long-term sustainability — looking 5 to 10 years down the road. 

Both perspectives are valid, but without collaboration, they can easily come into conflict. For example: 

• HR may push for immediate salary adjustments to reduce turnover, while 

• Finance prioritizes cost containment and forecasting long-term impacts. 

Without a shared language and aligned planning process, compensation decisions can feel like a tug-of-war. 

The Risks of Planning in Silos 

When HR and Finance don’t work together on compensation, agencies face real consequences: 

• Flat COLAs that ignore pay equity issues 

• Misaligned assumptions across departments 

• Inefficient budget use that doesn’t support retention goals 

• Slow or stalled negotiations due to unclear costing 

In short: a lack of alignment costs time, money, and trust — both internally and at the bargaining table. 

A Better Way: Collaborative Labor Costing 

Cross-functional alignment isn’t just a nice-to-have. It’s essential for building smarter compensation strategies. Agencies that prioritize collaboration between HR and Finance can: 

• Build joint timelines around key events: negotiations, budgeting cycles, and comp studies 

• Develop a shared view of labor cost impacts over time 

• Evaluate pay practices (like linear vs. non-linear increases) based on equity and budget outcomes 

• Support negotiations with strategy, not just numbers 

Beyond Percentages: Rethinking Pay Practices 

One area where collaboration is especially important? Pay structure design. 

Flat percentage increases — whether applied across a grade or directly to employee salaries — often lead to pay dispersion over time. Workers in the same grade but at different points in the range receive vastly different raises, compounding equity issues. 

Finance teams may not see the problem until turnover rises or engagement drops. HR may not feel empowered to propose alternatives without cost modeling support. 

By working together, these teams can explore equity-driven alternatives like: 

• Non-linear wage progression models that accelerate pay early, then taper off 

• Data-informed adjustments that prioritize compression relief and competitive midpoints 

• Forecast models that visualize long-term impact on budget and benefits 

Best Practice: Build Alignment Early 

Waiting until negotiation season to get aligned is too late. Agencies should aim to: 

• Start conversations 6–12 months in advance 

• Build a shared compensation calendar 

• Identify pain points and opportunities together — early and often 

When HR and Finance plan together, they can be more proactive, more strategic, and more unified in their message. 

TrueComp + CPS HR: Built for Cross-Functional Success 

At TrueComp, we believe compensation strategy should be shared strategy. That’s why our platform is built to bring HR and Finance to the same table — with tools to visualize, forecast, and align on labor cost impacts in real time. 

Through our partnership with CPS HR, we combine modern tech with decades of public sector consulting experience — helping agencies stop planning in silos and start planning for long-term success.