What are some essential areas of finance that pertain specifically to human resources professionals?
Of course, understanding the financial impact of personnel costs is important. And being able to budget in a way that supports the financial goals of the company is also critical. Both of those are based on understanding the income statement. Then there is benefit cost analysis, which is also critical. But the most important area is ROI analysis for HR initiatives. HR professionals need to evaluate HR spending in terms of return more than it does. Even when some of those returns are soft. Can HR professionals, who probably do not have a degree in finance, easily understand the financial aspects of the job? How can this be made easier? Yes, everyone can understand finance; it really is not that tough. As we tell our students, most of finance is addition and subtraction, and when we get really fancy, we multiply and divide. HR professionals should always ask questions and get involved in the company’s numbers. Listen in to the quarterly earnings conference call (anyone can dial in and li
