Want to win approval of a pet HR technology project? Use "finance speak," not "HR speak," to pitch it to senior management.
HR specialists tend to couch the benefits of tech initiatives in terms of intangibles, such as "enhancing employees' views of the organization" or "improving efficiency."
The problem? Your CEO and CFO want solid financial data before they'll green-light your project. So you need to prove how the technology will help solve a specific, tangible business problem, plus how it will contribute to the bottom line.
If you're not comfortable with discussing finances, chances are, you won't win funding for your project. Mastering Business Finance explains everything in easy-to-understand language.
And when necessary, it even provides you with charts and examples to increase your comprehension, as well as a glossary of terms. Get your copy...
Example: Say you want to contract with a tech vendor to let employees manage their 401(k) plans online. Don't just tell your CEO that the system will save money; show him.
Start by looking at your current costs. How many inquiries and transactions do you currently handle in a month? What's the average time you spend handling each manually? Multiply the total transactions by the average time spent on each. Next, multiply the result by your hourly pay.
Now, compare your current costs with what the new system would cost to operate. How long will it take for the system to pay for itself? What type of annual dollar savings should it anticipate?
Finally, make your case to senior brass. Highlight cost savings and ROI before discussing less-tangible benefits.
Example: "This system's self-service capabilities will reduce the amount of time HR spends responding to employee inquiries by 15 hours a month, which equals approximately $480 a month in labor costs. Our initial investment in the system will be $5,500, which means we'll see a total return on our investment in a little over a year. Our savings will continue to grow as we add employees. We'll also enjoy the benefits of greater efficiency and improved employee convenience."
Mastering Business Finance explains expense and capital budgets, how to raise money, cash management and financial analysis, all in a way you can understand. This guide isn’t just a how-to, it’s also a why-to. Get your copy now...
Play it smart by aligning yourself with the CFO
The first step? Partner with the finance chief by learning the measures and indicators he or she thrives on, such as:
- Payback period
- Risk assessment (or failure rate)
- Cost per unit of service
- Competitive advantage
Then, pick an HR program (ideally one that your CFO is skeptical about) and focus on proving that program's business impact and high return. Conversations like that will draw attention to your strategy smarts, and it'll build respect between you.
Final tip: Show how your HR programs improve productivity. Lowering the "people dollars" required to produce a unit of output/production is the key to instant recognition, but most HR departments never measure it.
With Mastering Business Finance, you'll learn how to:
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- Analyze financial statements
- Manage fixed assets, inventory and receivables
- Choose between a variable and fixed budget
- Troubleshoot with ratio analysis
- Reap extra profit from your budget
- Identify and distribute hidden costs
- Coordinate your business plan and budget
- Use zero-based budgeting effectively
- And much more...