Financial Skills for HR Professionals

Start Date: 17 Sep 2017
End Date: 21 Sep 2017
Duration: 5
Country: Morocco
Category: Training & Human Resources

The Course

The planning and budgeting process in most organisations starts with the human resources (HR) department. At the same time as the sales and marketing professionals are assessing product and service mix and making short and long-term forecasts of sales demand and prices, the HR department is assessing its current level of resources and the likely level of resources required both in the short and longer term. The HR function plays an integral role in the budgeting of costs for the whole organisation. It is also responsible for the preparation and management of its own departmental budget, and is accountable for the achievement of that budget. Financial awareness is therefore an essential requirement for every role at every level within the HR departments of modern business organisations.

Companies are increasingly integrating all their business processes using systems like ERP (enterprise resource planning). Each business function should therefore understand, and be able to communicate, accounting and financial (and non-financial) information. This seminar provides the required level of financial awareness and practical application for HR practitioners to appreciate accounting and finance in the broader context, and the HR functionís involvement in the organisationís budgeting and budgetary control processes, and participate in the decision-making process. It also includes the techniques required to prepare a detailed budget for the HR department itself, and the management of the HR departmentís actual budget performance.

The Goals

         Company objectives and financial statements

         Reading and interpreting financial statements

         Discounted cash flow (DCF)




         Cost/volume/profit (CVP) analysis

         HR and the budget process

         The HR budget

         Measuring HR performance

         Budgetary control

         Capital investment appraisal

         Capital budgeting

The Delegates

This course is a must for all HR practitioners at every level, whether you are an HR assistant or HR officer, or an HR manager or HR director. Whilst a prior knowledge of financial management and accounting is an advantage it is not a pre-requisite or a requirement to attend this course. Each topic will be presented in a user-friendly way to ensure a clear understanding of financial information and financial techniques, and an appreciation of the relationship between finance and the HR function.

The Process

This seminar will be presented in a participative style, and the team-based exercises and case studies will encourage discussion of the issues raised. It will also provide the opportunity to discuss and compare the HR practices of other companies with that of your own company. Many of the practical examples, for example discounted cash flow (DCF), break-even analysis, financial analysis, and budgetary control are also illustrated using Excel© spreadsheet models. This seminar provides the theoretical background to the key areas of accounting and financial management, which are put into a real world context by providing many worked examples and case studies relating to each of the topics covered, which will help you learn how to:

         Appreciate the significant importance of cash flow (rather than profit) and discounted cash flow (DCF) in creating value for optimal decision-making to maximise shareholder wealth.

         Analyse the income statement (or profit and loss account), balance sheet, and cash flow statement, and use ratios to interpret the financial statements and be aware of their limitations.

         Appreciate the key role played by the HR department in the organisationís budget process and preparation of the master budget, and the use of techniques like activity based budgeting (ABB).

         Use the techniques of break-even analysis, budgetary control, capital investment appraisal, capital budgeting, and variance analysis for budgetary control.

         Identify each of the costs required to manage a modern HR department to be able to prepare its annual budget and manage its actual performance.

The Benefits

Following completion of this programme, you will know how to:

         Use your financial knowledge for improved planning and management decision-making

         Communicate with finance professionals, within and external to your organisation, to be able to become a more effective manager of the business

         Liaise more effectively with other departments on financial matters

         Share your financial knowledge within your own department and with other departments within your organisation

         Identify and quantify each of the areas in your organisationís budget for which the HR function has indirect responsibility

         Identify and quantify each of the areas for which your HR function has direct responsibility to be able to prepare a comprehensive HR department budget

         Measure HR performance

The Results

This seminar will provide you with the skills to enable you to:

         Read and interpret the financial statements of a business: cash flow statement; income statement (profit and loss account); balance sheet

         Evaluate business performance using appropriate techniques of financial analysis

         Identify the differences between fixed and variable costs and recognise the impact of changes in cost structure on the performance of the business

         Use both the traditional techniques of budgeting and activity based budgeting (ABB)

         Determine the break-even point of a business using cost/volume/profit (CVP) analysis

         Recognise the importance of cash flow (as distinct from profit) as a measure of business performance

         Use the technique of discounted cash flow (DCF)

         Evaluate new capital investment using DCF and other methods

         Provide the relevant information and budgeted costs for each of the human resource-related areas within your organisationís budget, for which the HR function has indirect responsibility

         Prepare a comprehensive HR department budget, which includes each of the areas for which the HR function has direct responsibility

         Compare actual versus planned performance using budgetary control and the use of flexed budgets

The Core Competencies

You will be able to put your learning into practice through:

         Being able to interpret the financial reporting of a business: cash flow statement; income statement (profit and loss account); balance sheet

         Using appropriate financial analysis techniques to evaluate business performance

         Appreciating the important differences between fixed and variable costs

         Recognising the ways in which changes in cost structure impact on the performance of the business

         Applying both the traditional techniques of budgeting and activity based budgeting (ABB)

         Being able to calculate the break-even point of a business

         Appreciating the importance of cash flow and discounted cash flow (DCF)

         Considering new capital investment in terms of creation of shareholder value

         Taking a proactive role in the development of your organisationís budget for the areas in which the HR function has indirect responsibility

         Being able to construct a detailed HR departmental budget, and being accountable for its achievement

         Using the budgetary control techniques of flexed budgets and variance analysis to compare actual versus planned performance

The Programme Content


Day One

Company objectives and financial statements

         Measuring company performance

         Value creation and the primary objective of maximisation of wealth

         Income statement (profit and loss account)

         Balance sheet

         Cash flow statement

Reading and interpreting financial statements

         Measurement of operating performance

         Measures of financial performance and financial position

         Risk measurement

         Limitations of ratio analysis

Day Two

Discounted cash flow (DCF)

         The importance of the timing of cash flows

         Future values

         Present values

         Discounted cash flow (DCF)


         Fixed costs, variable costs, and overheads

         Overhead allocation, absorption, and the use of activity based costing (ABC)

         Expenses versus inventory (stock valuation)

         Contribution compared with profit

Day Three


         Relevant costs

         Shut-down versus continuation

         Make versus buy

         Product mix and limited resources

         Decision trees


         Purposes of budgeting

         The budget process

         Activity based budgeting (ABB)

         Uncertainty and risk

         Motivation and the behavioural aspects of budgeting

         Problems in budgeting

         Non-financial performance measures

Cost/volume/profit (CVP) analysis

         Cost, volume, profit relationships

         Break-even analysis

         The impact of cost structure changes

         Limitations of break-even analysis

Day Four

HR and the budget process

         Organisation charts

         Manpower planning

         The direct labour and indirect labour budget

         Employee benefits

         Employee records

         Payroll administration

         Redundancy costs

         Health and safety

         Employee appraisal

         Succession planning

The HR budget

         HR staff costs

         HR overhead costs

         HR overhead cost allocations

         Employment or outsourcing

         Training and employee development

         Preparation of the HR budget

         Your organisationís HR budget

Measuring HR performance

         Why we measure HR

         How to measure hiring and staffing

         How to measure training and development

         How to measure employee relations and staff retention

Budgetary control

         Organisational and accounting control systems

         Standard costing

         Flexed budgets

         Variance analysis

         Types of variances and the reasons they occur

         Planning and operational variances

         Controllable and uncontrollable costs

         Responsibility for HR budget variances

Day Five

Capital investment appraisal

         Methods for evaluating capital projects


         Net present value

         Internal rate of return

         Discounted payback

Capital budgeting

         Capital rationing

         Ranking of investment projects

         Inflation and investment

         Using expected values and standard deviations to make decisions

Mailing List
Send To Friend
Training Plan