Finance and Business Intelligence for HR Professionals

Why Attend

Times have changed. Business acumen and financial intelligence are now considered essential HR competencies. Everyone in a company, including HR, does better when they understand how they impact company performance and how financial success is measured. Indeed, if HR were to develop its own business and financial intelligence, it would become more involved and committed, and would surely be offered a seat at the business decision table.

This course will equip participants with the basic financial and business tools necessary to speak and understand the language of business, extract and use meaningful information, analyze the numbers, produce in depth business insights and make enlightened decisions that have a measurable impact on the organization’s overall performance. It is only when HR masters these tools that it will be perceived as a full-fledged business partner.

The course follows a simple, focused, and practical methodology that will make the course’s subject matter easily accessible and highly enjoyable.

Course Methodology

The course uses a mix of interactive techniques such as lecturettes, presentations by course participants, case studies, group activities as well hands-on activities that ensure deep learning of topics covered.

Course Objectives

By the end of the course, participants will be able to:

• Gather and interpret various financial data that demonstrate HR’s contribution to the overall performance of the organization
• Link the dots between the organization’s income statement, balance sheet and the HR function
• Explain why cash matters and how it is connected to everything else
• Calculate and apply various financial and business ratios that offer a quick shortcut to understanding what the financials are saying
• Use HR analytics to predict future outcomes of HR decisions
• Calculate and understand return of investment in HR
• Craft a strategy to create and sustain a financially literate HR department

Target Audience

This course is for all HR professionals who want to develop their financial and business intelligence. The course will help them realize that HR results alone do not matter and that what really matters is overall business results. Consequently this course is particularly designed for those HR professionals who have decided to grow into credible and effective business advocates, leaders and partners.

Target Competencies

• Financial literacy
• HR analytics
• Analytical thinking

• General business acumen
• Decision making

Course Outline

• HR and the language of business
  • The exact meaning of ‘HR as business partner’
  • The modern HR competency framework
  • The meaning of financial intelligence and business acumen
  • The four skills of financial intelligence
  • Prescriptive and predictive HR analytics
  • Using HR lagging and leading indicators for effective decision making
    • Lagging indicators
    • Leading indicators
    • Managing tomorrow, today
• Cracking the income statement and balance sheet codes
  • Balance sheet basics
    • Assets and liabilities
    • The balance sheet should balance
  • The income statement made simple
    • Revenue
    • Costs and expenses
      • Total fixed cost
      • Total variable cost
      • Total cost
      • Breakeven output/revenue and cost of employees
  • The income statement affects the balance sheet
  • Variances and percent calculations
  • Employees as assets
• Cash matters
  • Profit is not cash
  • Cash flow language
  • Cash connects with everything else
  • Compensation and bonus plans

• Ratio analysis
  • Analyzing ratios
  • Profitability ratios
    • Gross profit margin percentage
    • Operating profit margin percentage
    • Net profit margin percentage
    • Return on assets
    • Return on equity
  • Liquidity ratios
    • Current ratio
    • Quick ratio
  • Efficiency ratios
    • Revenue per employee
    • Total asset turnover
  • Key HR ratios
    • Total expense per employee
    • Compensation as a percent of revenue
    • Compensation as a percent of total expenses
    • Opportunity cost of vacant positions
    • Average employee productivity
    • Cost per hire (at different levels of the company)
    • Benefit cost as a percent of revenue/total expenses
    • Employee turnover
    • Absenteeism rate
    • Cost of absenteeism
    • HR department expense as a percent of total expenses
• The rate of Return on Investment (ROI)
  • Human resources vs. human capital
  • All about the ROI
  • Calculating the ROI
  • Capital expenditures analysis
  • ROI of outsourcing
  • The Return on Learning (ROL)
  • The Return on Human Capital (RoHC)
• The financially intelligent HR department
  • Putting it all together; financial acumen, transparency and performance
    • Financially intelligent managers and business health
    • Financial intelligence and employee involvement and engagement
    • Culture of financial transparency and intelligence
  • Strategies for building HR financial and business acumen