HR and Finance

NaeNae55

For some time now I have been trying to get HR people to look more at the bottom line. This is the language of CEO's and other top managers, but many HR people don't get the connection between having a seat at the big table and being able to see how actions affect the bottom line. Here is an excellent article from CFO magazine. It is a free magazine, so I am sure you will be able to connect to the link.

[url]http://www.cfo.com/article.cfm/11436346?f=EditorsLetter052908[/url]

Let me know what you think after you read it.

Nae

joannie

Thanks, Nae. I thought it was a very good article. Both times I have moved into the HR arena has been from the financial side. One thing I have found difficult is getting operations people to accept the fact that HR can and does understand contributing to the bottom line. And that HR can make valuable suggestions on improving the bottom line.

NaeNae55

I think few are more qualified to make valuable suggestions than HR people. The problem is that so many don't know how to communicate in "CEO Speak."

Our local SHRM chapter recently did a finance course for our members. Actually, it was a repeat from last year. Our current chapter president and I presented it last year, but this year I was out of town and she had to do it alone. Only a small percentage signed up for the class, and it was at a great price ($25 for 3 hours of HRCI strategic credits). We did have about 2-3 times as many sign up this year as last, but it is still heavy going. Many HR people cringe when you talk about numbers. The profession needs to learn about them and understand them so they can do "CEO Speak." That doesn't mean they have to become accountants for fill their working lives up with numbers, but it makes a huge difference in an organization when the person with their finger on the pulse of the greatest company asset knows what is going on and can communicate it effectively to the big shots.



Nae

stilldazed

Pretty good article. Thanks for the link.

I do happen to be part of my organization's senior strategic team, have never worked in finance or accounting (thank goodness), brought an MBA to the position when I was hired, and was the first in my role to 'enjoy' having the position added to the senior leadership team. I have two responses to folks who question HR's credibility and ability. First, I agree that a fundamental understanding of business (including the financial side) is critical to everyone on the senior team. Second, that plague that seems to have been assigned to HR (meaning that HR doesn't have the skills) also surfaces in other non HR positions senior positions also. I happen to spend time now with operational managers trying to help them understand their budget sheets and can't help but wonder sometimes how they got where they did in the organization.

I am not one to focus on gender issues often, and my response may incite a barrage of negativity, but I think that HR has been a convenient target because it has historically been heavily populated by women and historically did not require a tremendous amount of academic or skills training. Finance/accounting positions have had the opposite history (generally speaking). The melding of the two is a contemporary notion, and a logical result is a skills gap until the skills field is level. I think that HR is beginning to move into an era of more level playing fields in that HR is more respectable as a profession (no longer hidden away under the title of payroll clerk or bookkeeper), has been recognized as a function that requires some legal savvy and good PR skills, and for which diverse academic training programs have been designed. That's all good!

plynnl

I have the unique opportunity of being both HR and finance manager. It is a small company, but I get to wear two hats and have learned that both areas intertwine in many ways.

davids

It is a thought-provoking article; but it makes me think that we are coming full-circle with how HR is viewed. I have been around long enough to remember when some organizations believed that "anyone can do HR work"; and HR was given to finance folks. I agree with the article that there are some HR functions, such as compensation and recruitment, where a strategic mindset is critical. The article does not take into acount, however, how HR work is impacted by FMLA, ADA and the host of other statutes and regulations that impact organizations. It takes more than finance and accounting skills to deal with the issues faced by HR on a daily basis. Indepth knowledge of those regulations and people skills are what keep organizations out of litigation.

ritaanz

[font size="1" color="#FF0000"]LAST EDITED ON 05-30-08 AT 08:10AM (CST)[/font][br][br]David, you are right on the money. xclap

I too, have seen organizations that rely on financial analysis of HR areas rather than the contribution that an experienced professional can bring to the table.

PS: I have an accounting degree.