For years HR executives have implored their colleagues to become more business savvy. The mantra has been, “if you want a seat at the strategic table, you have to speak the language of business.”
Some HR departments have embraced that call to action. One large company we know identified business acumen as the second of four critical traits for its HR professionals. Other HR teams, however, have been less attuned to the problem — like our Fortune 500 client whose HR managers didn’t know what the company’s financial goals were and didn’t even know who to ask to find out.
Where does the blame rest? Let’s look at some of the factors.
Avoidance. We found that some HR folks would rather not learn about the numbers. They want to focus on the people issues in their company. But almost everything in HR intersects with numbers in some way: budgets, compensation, insurance benefits. If an HR manager doesn’t understand the numbers around those issues, they probably aren’t doing their job very well. Here, the blame is on the HR folks.
Perception. Is it really true that most human resource professionals can’t speak the language of business? Or is that simply an outdated perception? We’ve found that the problem is not universal; we’ve worked with many HR folks who understand the financial statements and key metrics of their companies and are champions of furthering financial literacy in the organization. Here, the blame is on the business side, not them.
Assumptions. When clients tell us that they don’t ask everyone in the organization to listen to their earnings call, because they won’t understand it, then we know there are assumptions being made about how smart people are. Here, we put the blame on the C-Suite. It is part of their job to help change expectations and assumptions within the company.
Trust. Sharing financial data with employees means that you trust them to use the information appropriately. In recent years we’ve had several companies call us to train their employees, but say that they are reluctant to use their own financial statements as the teaching tool. How can you teach your employees about financial statements, and then tell them, sorry, you can’t see ours? That sends the wrong message.
We know that HR professionals can become financially intelligent and, in the process, set a great example for the rest of their organization.
Do you work in HR or on the business side? How do you see this issue?
Originally published on Harvard Business Review Blog.