Think more like a CFO with 11 tips on how to justify HR programs and connect your initiatives to the organization’s bottom line. HR professionals must be able to speak the language of business, specifically a language focused on the organization’s bottom line. Think more like a CFO with 11 tips on how to justify HR programs and connect your initiatives to the organization’s bottom line.   

 

 

11 CFO Tips Every HR Pro Should Know

Return on investment. Capital expenditures. Systematic risk. Cost-benefit analysis.

How often does your HR department use these and other finance-related terms? If you’re like most HR professionals, finance lingo probably isn’t part of your everyday business conversations. But your CFO wishes it would be.

Uncover 11 Ways to Channel Your Inner CFO

  

 

 

 

Over the past decade, businesses have realized the value of a strong workforce. CHROs are now a vital part of the executive team, and HR departments are expected to provide strategic guidance on how to maximize the workforce’s potential. Consequently, HR professionals must be able to speak the language of business, specifically a language focused on the organization’s bottom line.

“While employees are usually an organization’s biggest area of investment, they are also a company’s greatest assets. HR understands nuances and strategies around this asset more than any other department in the organization. Don’t let this people expertise go unused. Adopting a business mindset will help HR professionals ensure that their people initiatives support the organization’s financial objectives,” said Lois Martin, executive vice president and chief financial offer at Ceridian.

11 secrets of thinking like a CFO

Your goal as an HR professional is to think like a business person first and an HR leader second. The 11 CFO tips below will help you further hone your business skills and use them to quantify, justify and propel your HR programs forward.

  1. Understand how the business makes money. A firm understanding of key business drivers and their financial implications will empower you to develop HR strategies that positively impact the bottom line.
  2. Know the market and your competitors. Insight into the ebb and flow of the financial market and the performance of competitors will enable you to better understand your CFO’s perspective and decisions.
  3. Connect HR programs to business needs. Focus on how HR’s decisions impact overall business performance. Every initiative of your department should be directly linked to at least one organizational goal and a desirable business result.
  4. Develop your business acumen. When sharing information about your people initiatives, speak the language of the business. Present your HR initiatives through a business lens, focusing on key performance indicators.
  5. Harness the power of your people data. The center of a CFO’s world is data. Ensure you have strong processes and systems in place for collecting, tracking and reporting your company’s people data.
  6. Use consistent data. The variability of HR often means that metrics can be measured in many different ways. Ensure that your organization has a single source of truth for measuring metrics like turnover, new hire ROI and training effectiveness.
  7. Quantify your HR initiatives. Use data and numbers to debunk the myth that HR only focuses on the “soft” metrics. Demonstrate the value of investing in employees by using data to show the financial implications of your talent management and development initiatives.
  8. Deliver insights. Don’t just report data. Instead, analyze your numbers to provide insights that will help drive the business forward. Provide guidance on what the data means for the business both today and in the future.
  9. Think big picture. Think beyond the HR department when developing strategic initiatives. What obstacles will the business face over the next five years? How can you use your HR expertise to help leaders address and identify future challenges?
  10. Use predictive analytics. Move beyond just reporting metrics that have already happened. Use your data to identify future opportunities and help the organization avoid potential setbacks.
  11. Be ready to consult. Become one of your CFO’s most valued partners by offering sound advice. Use your people expertise to diagnose organizational weaknesses, identify wise talent investments, and advise on the talent implications of the company’s strategy.

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