A HBR Book Review
FINANCIAL INTELLIGANCE FOR HR PROFESSIONALS

Human Resources professionals areoften viewed asonly having a policy and procedure role focusing mainly on compliance and legal issues or Henchmen for Top Management. They are considered as support functional team having little influence in the overall strategy of the company.HR like most other aspects of business, including marketing, research and development, and strategy formulation is at least partly subjective, a matter dependent on experience and judgment as well as data. But finance and Accounting? The numbers produced by these departments are objective, black and white, and indisputable.
According to John Hofmeister, president of Shell Oil Company “If you’re going to be in business and you’re going to work in HR, then you better understand finance, To be blunt, everything that a business line manager should understand.”HR people should be able to read and understand their company’s income statement, balance sheet and that they should be able to deal with the whole budgeting process, capital investments so on. The art of accounting and finance is the art of using limited data to come as close as possible to an accurate description of how well a company is performing.The bottom line of the income statement is net profit.These are the numbers that senior managers use to gauge a business’s performance. They are the basis for many of the fundamental decisions a company’s leaders must make day in and day out.As a HR professional if you can understand the assumptions of the numbers represented in the income sheet and balance sheet you will learn how to calculate ratios. You’ll learn about return on investment and working capital management, two concepts that you can use to improve your decision-making skills and boost your impact on the organization.
In general practice HR professionals’focuses on