This Month Only! >> $20 off and a FREE SHRM tote with your membership and code TOTE2018!
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
There is no question that financial acumen and understanding are critical for HR consultants, said Rose Gailey, a senior consultant with Gagen MacDonald, a consulting firm in Chicago.
The importance of high-performance cultures has “really hit a crescendo in the last three to five years with the economic crisis in the United States and abroad,” she said. “This is really driving home the significant critical asset that the human element is to corporate success and bottom-line results.” While 10 years ago it might have been necessary to build a case for such a claim, she said the case is well built today.
HR consultants, said Gailey, need to articulate the business results that they can impact. They need to be able to demonstrate “how they can move the needle in strategic and tactical ways.” There are, she said, three key roles that HR consultants (and, in truth, HR practitioners in general) must play in today’s business climate:
Added Gailey: “Delivering our value is really going to require us to up our game; there’s no question about it.”
The good news for HR consultants is that they don’t have to have a background, or degree, in finance to deliver on these three roles, said Pamela Wasley, CEO of Cerius Interim Executive Solutions in Irvine, Calif.
A Matter of Perspective
HR consultants without a background or experience in finance are not necessarily left out to sea when it comes to being able to deliver value to their clients.
“HR consultants do not need to have a financial background to work closely with the CFO, but they must have an understanding of how the finances of a company work,” said Wasley. “They need to know how to speak the language of the CFO as it all comes down to metrics, numbers, goals and ROI.”
It’s more about perspective than degrees. It requires, at the most basic level, the ability to translate traditional HR-related objectives (such as reducing turnover) into quantitative, bottom-line results (such as reducing the costs of recruitment and decreased productivity related to turnover).
Brenda VanderMeulen, SPHR, is an HR consultant with River Hills Consulting in Holland, Mich., who worked in finance for five years before moving into HR. “I believe that HR folks enhance their credibility immensely by having a good understanding of the financial aspects of an organization,” she said. “Having these skills and knowing how to use them in conversations with managers adds credibility because it demonstrates that you understand the business and are proposing solutions to organizations’ problems—not ‘fluff’ that ‘just makes people feel good,’ ” she said.
Taking a “soft skill” perspective will not serve HR consultants well, agreed Wasley. Organizations do not have the luxury or interest in doing things because they’re nice to do. They want to know, in quantifiable ways, how these things will have an impact on key business drivers.
Unfortunately, supply has not kept up with demand in this area. Wasley estimated that only about 25 percent of the applications she sees from HR professionals demonstrate financial acumen.
VanderMeulen agreed that the numbers are low. “I teach HR at the University of Phoenix and it’s a consistent issue I see in my classes, even among people who are working in HR and trying to get a master’s,” she said. “They want to avoid the numbers. The reality is that we need to get to that place where we understand the language of finance.”
Getting Up to Speed
Wasley suggested that every HR consultant, at a minimum, take a course such as finance for nonfinancial people to provide a foundation of understanding.
In addition to taking courses in finance, which VanderMeulen agrees is a good step, seeking opportunities to broaden exposure through experience can be extremely valuable. Looking back at her career, VanderMeulen noted that “working in finance was an amazing gift for me.”
Seeking connections with those who do have experience in this area can also be helpful, she suggested, and is possible through involvement in small-business organizations and the chamber of commerce.
VanderMeulen pointed out that the need for financial acumen has always been there for HR professionals. It is only the awareness of the need that has been lacking. “I think the need for this is becoming more recognized,” she said. “People in HR are becoming more aware that this is something they need to know about.”
After all, every business person must speak in the language of their customers. HR is no different. For HR consultants hoping to stand out, be competitive and make an impact, speaking the language of bottom-line results is a must.
Lin Grensing-Pophal, SPHR, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
HR Education in a City Near You
SHRM’s HR Vendor Directory contains over 10,000 companies