When it comes to business, two important departments seem to clash in terms of operation and perspective: these are Finance and Human Resources. Finance operates through numbers and profit. On the other hand, HR focuses on employee development. Ironically, they do complement each other in achieving business success. Pursuing a degree in Finance at trusted institutions like Northeastern University is an excellent move to grow your HR business further.
Extensive financial knowledge can positively impact your HR business in these varied ways:
- Compensation and Employee Benefits
Perhaps the most readily-financial aspect of Human Resources functions is payroll management. Work hours rendered, paid leaves, and other employee compensation matters must be properly accounted for. Accuracy in computation is very important for this job. Fortunately, there has been a lot of efficient HRIS software available today that allows any HR personnel to go about their payroll duties smoothly. However, it takes a good eye and advanced financial understanding to better understand the reports generated through these systems. When a finance professional handles payroll and compensation management, you won’t be needing external assistance and review from the accounting and finance department anymore.
- Recruitment
During the recruitment process, a typical HR professional has in mind the job requirements and qualities of a qualified applicant to consider for an open position. Once an applicant is a match, he or she is hired, and this potentially productive talent is sure to contribute to the organization. However, that isn’t always the case. Launching a recruitment campaign isn’t as simple as posting a job ad. Every move that a company makes incurs expenses and recruitment can indeed be a costly move. A financially adept professional will analyze first the costs and expenditures that are involved in the hiring process up to the training of newly hired employees. Based on the analysis made, the scale and approach of recruitment can then be decided. This can spare your business from making any further mistakes.
- HR Policies and Procedures
To maintain a disciplined and productive workforce, Human Resources creates and implements various company policies and procedures. These policies encompass all aspects of people management and serve as a guide in making decisions that meet labor standards. What basically constitutes HR policies are:
- Organizational structure
- Rules and regulations
- Recruitment procedures and promotions
- Employee relations
- Employee compensation and benefits
- Health, safety, and security
Consequently, these policies and procedures also have a financial impact on an organization. Determining a quantifiable data out of these concepts will require a mathematical approach that finance degree holders have been continuously engaged with.
- Workforce Performance
High business productivity translates to high ROI or return of investment. Productivity lies in the efficiency of a workforce to carry out the business processes in a smooth, harmonious, and effective way. The Finance department focuses on the monetary value of these processes and results, but it’s up to the HR department to manage the people and keep them productive. Excellent work performance translates into promotions, so giving out the right rewards to deserving employees has to come with the right metrics to back it up.
- HR Programs
To keep production rates high, the workforce has to be at its full capacity not only by the numbers, but also in per unit or person contribution. That is why a high turnover rate can have a negative impact on the overall financial standing of a company. Employee retention programs are an organization’s way to avoid high turnover rates. But to avoid going overboard in coming up with such programs that require a lot of budget allocation that can potentially harm the business even more, proper financial analysis by a knowledgeable finance professional has to be done.
- Strategic Problem-Solving
The field of Finance is strict when it comes to security and resilience since it deals with money. That is why financial models take a disciplined approach to solve problems that help improve the company’s organizational standing. Such techniques and principles can also be applied to Human Resources as well. For instance, forecasting future workforce shortfalls and coming up with possible approaches to prevent it or do damage control.
By quantifying seemingly unquantifiable HR concepts, especially with regards to talent and workforce, top executives, CEOs, and CFOs gain a better understanding of HR operations and its impact. Having financial knowledge that comes with a degree in finance is indeed like breaking the business language barrier for the entire organization. The Human Resources industry continues to evolve, and Finance will play a crucial role in its evolution.
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