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How much knowledge of finance is required to work in Human Resources?

What extent of knowledge of finance is required in order to handle compensation duties in HR? What skills should I look to acquire in finance in order to get a job in HR? #business #human-resources #hr #hr-consulting

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Aijaz’s Answer

HR Management Key Skill #1: Organization HR management requires an orderly approach. Organized files, strong time management skills, and personal efficiency are key to HR effectiveness. You’re dealing with people’s lives and careers here, and when a manager requests help with a termination or a compensation recommendation or recognition program, it won’t do to say, “I’ll try to get to that if I have time.” HR Management Key Skill #2—Multitasking On a typical HR day, an HR professional will deal with an employee’s personal issue one minute, an intermittent leave question the next, and a recruiting strategy for a hard-to-fill job the minute after. And that’s to say nothing of social media, wage/hour, engagement, retention, and a whole host of other things, every one critical to someone. In HR, if it’s not one thing, it’s another. Priorities and business needs move fast and change fast, and manager A who needs someone hired doesn’t much care if you’re already helping manager B who needs someone fired. You need to be able to handle it all, all at once. -
HR Management Key Skill #3—Dealing with Grey A surprisingly large percentage of the issues HR managers face are in “the grey area.” Is it discrimination? Is it harassment? What’s a “reasonable” accommodation? How far over backward do you have to lean to approve intermittent leave? HR managers have to be able to act with incomplete and “best available” information, and they have to know when to seek the professional help of colleagues, attorneys, and other experts. HR Management Key Skill #4—Negotiation Along with grey comes the need to negotiate—there are often two or more opposing views, and the successful HR pro can find an acceptable middle ground. Remember, the goal of negotiation is to end up with two parties that are satisfied with the outcome, and that’s not often easy to achieve. HR Management Key Skill #5—Communication HR professionals have to communicate up to management, over to managers, out to potential employees, and down to all levels of current employees. And they have to do it in writing, while speaking to large and small groups and, increasingly, through social media. They have to be convincing, caring, and believable. HR Management Key Skill #6—Discrete and Ethical HR professionals are the conscience of the company, as well as the keepers of confidential information. As you serve the needs of top management, you also monitor their actions toward employees to be sure that policies and regulations are followed. You need to be able to push back when they aren’t in order to keep the firm on the straight and narrow. Not an easy responsibility! Of course, you always handle confidential information appropriately, and never divulge it to any unauthorized person. HR Management Key Skill #7—Dual Focus Employees expect human resources professionals to advocate for their concerns, yet you must also enforce top management’s policies. The HR professional who can pull off this delicate balancing act wins trust from all concerned. There are times you must make decisions to protect the individual and other times when you protect the organization, its culture, and values. These decisions may be misunderstood by some, and you may catch flak because of it, but you know that explaining your choices might compromise confidential information. That’s something you would never do. HR Management Key Skill #8—Conflict Management and Problem Solving News flash! Everyone doesn’t always get along with everyone else. High productivity demands that people work together at least civilly. HR has to find ways to allow that to happen. And that’s to say nothing of the myriad other problems that hit HR’s in-box—you can’t be effective without problem-solving ability. HR Management Key Skill #9—Change Management Most companies today are in a constant state of flux. Task forces, matrices, and teams spring into being, do their jobs, and disband as others form. Hierarchies have been squashed, and companies have four or five generations working side by side. A lot of people are freaked out by what’s going on. HR has to help everyone cope with the constant changes - See more at: http://hrdailyadvisor.blr.com/2006/07/18/the-9-essential-skills-of-human-resources-management-how-many-do-you-have-2/sthash.S43RDIz4.dpuf

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Nicole’s Answer

I hate to admit it, but I did very poorly in my Finance classes in college. I got a C- in those classes, barely passing. It was certainly not my forte. With that said, I have had a very successful career in Human Resources for the past 8 years with having very little knowledge of Finance. The only time I have touched on finance related matters in HR is when developing budgets for the HR department and adhering to them. Therefore, a basic understanding of budgeting is helpful, but I don't think that requires you to be good a Finance in general.
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Angela’s Answer

Generally speaking, I do not feel that in depth understanding of finance is necessary to be in HR. It can definitely help you in understanding business workings, and if you specialize in compensation (particularly executive) it becomes more critical, but a lot of that knowledge you can gain on the job.
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Natalie’s Answer

Hello! I don't not think knowledge of finance is required to work in HR. For my organization, none of the human resources job descriptions require any finance experience.
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Robert’s Answer

Talent reward requires the basic finance knowledge, but I don't think Finance knowledge is a must-have qualification for HR. If you have it, you can understand your company in a much deeper way in terms of P&L, and you can give the strategic advice to the management about the cost impact relating to the people decisions.
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Sen’s Answer

For an HR professional, some kind of administration job is part of it. In case, you are doing only Recruitment, Talent management, Training/ L&D etc, then you should understand the cost in broad sense.For example, if you are doing a particular campus placement interview, you should be knowing how it is budgeted, what are heads on which you should spend and carry out a Cost Benefit Analysis. But I don't think you need too much of financial knowledge. But if you are involved in Pay Roll making, Compensation Management then you should be knowing fundamentals of mathematics(absolute basics) along with Excel. Not a major problem even if you don't know/understand much of finances. Good, if you have/acquire it.
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Meg’s Answer

Hi - While it is a great skill to have Finance knowledge & expertise, it is not required for HR. It will be helpful at the basic level. If you are interested in the Compensation field in HR, moderate level of Finance knowledge is very helpful. In that area, there is a lot of partnership and interaction with Finance department.
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UH’s Answer

Having a strong understanding of Finance is important for the most part if you go into compensation/benefits or payroll. However, if you were to work in a department such as Talent Acquisition, it wouldn't be as important or applicable, same for recruiter roles and professional development-related within Human Resources. Understand the basic Excel and you can get through anything in corporate, as a lot of things are done in Excel. Be sure to understand essential Excel functions so that Excel can make your life easier! There are a lot of free resources on Excel that you can look through and learn from when preparing for job searches. Understanding the business processes, compensation, and benefits, is also really important!
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Deborah’s Answer

Hi Nicole! This is a great question if you're looking to branch out into a Compensation Analyst role. As a general rule, a strong background in Finance isn't necessarily required for you to be successful in HR. There are a variety of functions (both generalist & specialized) within Human/People Resources and it's important to think about building your skillset in the following areas that are in-demand for an HR professional:

  1. Resourcefulness - hone your abilities to be a creative problem-solver and know the available resources and research trends for your targeted industry(ies). Familiarize yourself with the employee lifecycle management and each area's pain points - research trends that mitigate issues.
  2. Communication, Client/Employee Engagement, & Relationship Management - all three go hand-in-hand and are crucial to success for an HR professional.
  3. Negotiation & Delegation - along with being resourceful, it's important to know how to successfully negotiate compensation or benefits packages so financial goals are met on the business-side for an organization (but only if this is an area you intend to specialize in). Also, you might want learn how to best utilize the talent around you in a workplace - leveraging everyone's abilities leads to a more productive environment (a vast number of employers seek HR professionals who understand how to limit attrition).
  4. Lastly, how to be a stellar Business Partner - HR's role is one-part employee relations & one-part business strategy. Build your skills in marrying the two concepts well and you'll do just fine.

Deborah recommends the following next steps:

First step is to research the HR discipline that piques your interest. The general disciplines typically fall into these categories: Recruitment, Risk/Safety, Compensation & Benefits, Employee Relations, Labor Law, and Training/Learning & Development.
visit www.shrm.org - an industry leader for HR trends and strategies.
For personal career strategy tips, visit www.nocareerlimits.com
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