Introduction:
The Comprehensive Financial Intelligence for HR Professionals course aims to enhance the financial literacy of human resource (HR) professionals by reinforcing the essential financial concepts and skills necessary in their roles within the organization.
Participants will learn to apply financial accounting and management skills within the HR context. The course covers various financial areas relevant to HR, focusing not only on core financial skills but also on enhancing the financial acumen of HR practitioners.
In most organizations, the HR department initiates the planning and budgeting processes. While sales and marketing teams evaluate product mixes and forecast sales, the HR unit assesses current resource levels and anticipates future needs, both short and long-term.
A key budgeting function in any organization involves the HR department, which estimates costs and prepares and manages the organization's divisional budgets. Financial awareness is therefore crucial for every role within modern HR departments.
As businesses increasingly adopt integrated systems like ERP (Enterprise Resource Planning), all business functions must prepare and report both financial and non-financial information clearly and accurately.
This Financial Intelligence for HR Professionals course equips HR personnel with theoretical financial knowledge and its practical applications, enabling them to understand accounting and finance in the broader organizational context. The course also emphasizes the HR department's role in planning, budgeting, and budget control, as well as its importance in strategic decision-making.
Moreover, the course provides insights on how to develop a comprehensive HR department budget and strategically manage departmental expenditures.
Objectives:
At the end of this Financial Intelligence for HR Professionals course, participants will be able to:
- Understand the importance of cash flow and discounted cash flow (DCF) as opposed to profit in value creation, especially in shareholder maximization and decision-making.
- Evaluate financial documents such as income statements, balance sheets, and cash flow statements, and analyze them using ratios while understanding their limitations.
- Recognize the HR department's crucial role in the organization's budgetary cycle, including the preparation of the master budget and the application of activity-based budgeting (ABB).
- Apply techniques like break-even analysis, budget preparation, budgetary control, investment appraisal, and variance analysis for budget management.
- Identify the resources needed to operate a modern HR department, create its annual budget, and manage its actual performance.
- Utilize financial knowledge for intelligent planning and advanced management decision-making.
- Interact effectively with finance professionals within and outside the organization to enhance business management portfolios.
- Collaborate more effectively with other departments on financial matters.
- Provide financial education to managers within and beyond their department.
- Assess the budget and identify areas where the HR function has indirect responsibility.
- Evaluate and estimate the components of a comprehensive HR department budget.
- Efficiently appraise HR performance.
Training Methodology:
- Participative Training Sessions
- Business Situations Analysis
- Role-Playing and Drama Techniques
- Game-Based Learning
- Presentations and Lectures
- Collaborative Learning
- Online Learning Modules
- External Learning Activities via the Internet
- Peer Coaching
- Q&A Sessions with Finance Experts
- Exploration of Topics Using Tests
- Consulting During Graduate Practicum
Course Outline:
Unit 1: Company Objectives and Financial Statements
- Defining the efficiency of the company
- Wealth creation as the main goal
- Statement of revenue and expenditure (profit and loss)
- Statement of assets, liabilities, and owner’s equity
- Statement of cash flows
Unit 2: Reading Fundamentals of Financial Statements
- Operating performance appraisal
- Financial performance and position measures
- Measurement of risk
- Critique of ratio analysis
Unit 3: Discounted Cash Flow (DCF)
- Timing risk of cash flows
- Concepts of future value
- Concepts of present value
- Discounted cash flow (DCF)
Unit 4: Costing
- Fixed costs, variable costs, and overheads
- Overhead absorption, allocation, and Activity-Based Costing (ABC)
- Expenses and inventory valuation
- Profitability analysis
Unit 5: Advanced Decision Making
- Cost treatment for decision making
- Deciding to shut down or continue operations
- Make or buy decisions
- Product portfolio management and constrained resources
- Decision trees for decision making
Unit 6: Controlling Budgets
- Objectives of budgetary control
- Budget control procedures
- Activity-Based Budgeting (ABB)
- Risk and uncertainty management
- Behavioral aspects of budgeting
- Managing budget preparation disturbances
- Measuring non-financial performance
Unit 7: Cost/Volume/Profit Analysis
- Relationship among cost, volume, and profit
- Break-even analysis
- Impact of cost structure changes on break-even points
- Limitations of break-even analysis
Unit 8: HR and the Budgetary Process
- Organizational charts
- Workforce planning
- Direct and indirect labor budgets
- Employee benefits
- Employment records management
- Payroll management
- Redundancy costs
- Occupational health and safety
- Employee performance appraisal
- Succession planning
Unit 9: Transitioning to HR Budgeting
- HR staffing costs
- Costs not related to specific products
- Overhead costs
- Hiring and contracting expenses
- Employee training and development
- HR budget formulation
- Organizational HR budget preparation
Unit 10: Quantifying HR Performance
- Importance of HR performance measurement
- Metrics for the hiring and staffing process
- Metrics for training and development
- Indicators for employee relations and retention
Unit 11: Budgeting for Control
- Management structures and financial systems
- Standard rate budgeting vs. average rate budgeting
- Anticipatory budgeting for income and earnings
- Analyzing plan vs. actual outcomes
- Relationship between planning variances and operational variances
- Controllable and uncontrollable costs
- Responsibility for variances in the HR budget
Unit 12: Capital Evaluation Purposes
- Capital expenditure assessment techniques
- Break-even analysis
- Present worth
- Discount rate
- Discounted payback period
Unit 13: Working Capital and Management
- Limited availability of funds
- Prioritizing capital expenditure allocation
- Asset valuation during inflation
- Expected value and standard deviation in decision-making
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