HR 101-Finance (Part 1)

The first topic of discussion in the ‘HR 101’ series of posts is Finance. The premise is simple-if you were teaching a ‘Finance Basics for HR’ course, what type of information would you share? What’s critical to know? How does this make someone a better HR person? The answers to these and similar questions will be helpful to those who want to improve themselves but might not know where to start.

To help answer these and other questions I have two great HR pros contributing their time and expertise-Trish McFarlane and Franny O. Both Trish and Franny walk the walk when it comes to understanding and applying the principles of finance to aid in their respective organization’s success. As professionals they also serve as proof that HR can, and should, embrace the language of business.

First up is….Trish McFarlane! Franny O. will take over tomorrow and offer her perspective.
So it’s time to listen up, because class is in session.

“It is critical that HR professionals have a solid understanding of the financial aspects of running a business.”

Trish McFarlane

If you were teaching a ‘Finance Basics for HR’ course, what type of information would you share?

Key courses would be those that cover budgeting, managing for profitability (billing, write-offs, etc.), and reading and understanding financial statements.

What’s critical to know?

I believe the reading and understanding financial statements piece is critical. By having that skill, HR pros will be someone that line managers and leadership will respect when they give advice.

How does this make someone a better HR person?

In my experience, the more credibility I have with company leaders, the better. One key complaint many company leaders have is that the HR group does not have a good understanding of the business, how the business makes money, or how to have a meaningful conversation about the financials of the business. By learning about finance, whether that be on the job, in school, or by studying on your own time online and with books, it is critical.

An example where this comes into play is regarding headcount. Often, HR is contacted to provide headcount information to be used to make hiring or reduction decisions. If the HR pro can also add why a hire or reduction makes financial sense, it is far more valuable to leadership. Let’s say you have a mid-level hiring manager trying to push a more junior hire through the approval process. If the HR pro can analyze the financials for that practice group, they can recommend whether or not the hire makes business sense and why. Without that background, HR basically can only escalate the request and allow the COO, CFO, or appropriate leader make the final call. HR becomes the messenger, not a trusted advisor.

What other courses are beneficial to HR professionals?

I find that many people in HR do not have a strong grasp of statistical analysis. By taking a course in applied statistics, it will further their ability to advise leadership on key business initiatives. For example, if you do not have that background, it will be much more difficult to recognize where the issues lie in employee survey data. And, when that happens, the HR pro is not able to advise leadership on actionable items the business can take to improve retention.


In a previous post you talked about establishing a “connection with your CFO and/or Accounting department.” How do you that (they can be pretty intimidating)?

Obviously, the ease of connecting with your CFO will depend on the culture, size of the company, or your level within HR. Let’s first start out a little lower on the Accounting/Finance food chain. Reach out to the person in that department who would be your counterpart. Do you support a specific group, city, or region? Find your counterpart that supports them from the financial side. Do you know them? Great. If not, set up an introductory meeting. Tell them up front that you’d like to learn more about what they do to support that group/city/region. You may want to offer up what your role is in supporting that group. If possible, ask to set up regularly scheduled calls or meetings to touch base.


In my experience, the CFO is often a very busy person, so I wouldn’t advise just popping into his/her office to start talking about HR and finance. Do you have any connection to the CFO? If so, see if this person can facilitate an introduction. I would only do this after you have tried to build relationships with your finance counterpart AND after you have done your homework how the company makes money and how the finance/accounting group fits into the picture. Be prepared.

Does your boss or other higher level HR person in your department have meetings with the CFO? If so, ask to shadow them on a meeting. Are you the high level HR pro and just need to begin a relationship with the CFO? That’s a little different. For me, it has been no different than forging a relationship with any other leader. I am honest, sincere, make sure I have done my homework, and try to contribute to the conversation in a meaningful way.

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HR 101-Finance (Part 1)

The first topic of discussion in the ‘HR 101’ series of posts is Finance. The premise is simple-if you were teaching a ‘Finance Basics for HR’ course, what type of information would you share? What’s critical to know? How does this make someone a better HR person? The answers to these and similar questions will be helpful to those who want to improve themselves but might not know where to start.

To help answer these and other questions I have two great HR pros contributing their time and expertise-Trish McFarlane and Franny O. Both Trish and Franny walk the walk when it comes to understanding and applying the principles of finance to aid in their respective organization’s success. As professionals they also serve as proof that HR can, and should, embrace the language of business.

First up is….Trish McFarlane! Franny O. will take over tomorrow and offer her perspective.
So it’s time to listen up, because class is in session.

“It is critical that HR professionals have a solid understanding of the financial aspects of running a business.”

Trish McFarlane

If you were teaching a ‘Finance Basics for HR’ course, what type of information would you share?


Key courses would be those that cover budgeting, managing for profitability (billing, write-offs, etc.), and reading and understanding financial statements.


What’s critical to know?


I believe the reading and understanding financial statements piece is critical. By having that skill, HR pros will be someone that line managers and leadership will respect when they give advice.

How does this make someone a better HR person?

In my experience, the more credibility I have with company leaders, the better. One key complaint many company leaders have is that the HR group does not have a good understanding of the business, how the business makes money, or how to have a meaningful conversation about the financials of the business. By learning about finance, whether that be on the job, in school, or by studying on your own time online and with books, it is critical.

An example where this comes into play is regarding headcount. Often, HR is contacted to provide headcount information to be used to make hiring or reduction decisions. If the HR pro can also add why a hire or reduction makes financial sense, it is far more valuable to leadership. Let’s say you have a mid-level hiring manager trying to push a more junior hire through the approval process. If the HR pro can analyze the financials for that practice group, they can recommend whether or not the hire makes business sense and why. Without that background, HR basically can only escalate the request and allow the COO, CFO, or appropriate leader make the final call. HR becomes the messenger, not a trusted advisor.

What other courses are beneficial to HR professionals?

I find that many people in HR do not have a strong grasp of statistical analysis. By taking a course in applied statistics, it will further their ability to advise leadership on key business initiatives. For example, if you do not have that background, it will be much more difficult to recognize where the issues lie in employee survey data. And, when that happens, the HR pro is not able to advise leadership on actionable items the business can take to improve retention.

In a previous post you talked about establishing a “connection with your CFO and/or Accounting department.” How do you that (they can be pretty intimidating)?

Obviously, the ease of connecting with your CFO will depend on the culture, size of the company, or your level within HR. Let’s first start out a little lower on the Accounting/Finance food chain. Reach out to the person in that department who would be your counterpart. Do you support a specific group, city, or region? Find your counterpart that supports them from the financial side. Do you know them? Great. If not, set up an introductory meeting. Tell them up front that you’d like to learn more about what they do to support that group/city/region. You may want to offer up what your role is in supporting that group. If possible, ask to set up regularly scheduled calls or meetings to touch base.

In my experience, the CFO is often a very busy person, so I wouldn’t advise just popping into his/her office to start talking about HR and finance. Do you have any connection to the CFO? If so, see if this person can facilitate an introduction. I would only do this after you have tried to build relationships with your finance counterpart AND after you have done your homework how the company makes money and how the finance/accounting group fits into the picture. Be prepared.

Does your boss or other higher level HR person in your department have meetings with the CFO? If so, ask to shadow them on a meeting. Are you the high level HR pro and just need to begin a relationship with the CFO? That’s a little different. For me, it has been no different than forging a relationship with any other leader. I am honest, sincere, make sure I have done my homework, and try to contribute to the conversation in a meaningful way.

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