HR Skills for Budgeting & Forecasting

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Human resource employees need a few very specific skills when it comes to things like budgeting and forecasting. Learn about HR skills for budgeting and forecasting with help from an accomplished attorney, author and speaker in this free video clip.

Part of the Video Series: Human Resource Tools
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Video Transcript

Welcome, this is HR That Works, President, Don Phin, and today I'm going to answer the questions what skills do I need to do proper HR budgeting and forecasting. First of all, you've got to understand math and unfortunately there's not a lot of people who've gotten into the HR function because they couldn't wait to be mathematicians. Now I know some people got into HR because they have a financial back and they might be a CFO or a bookkeeper or somebody with administrative capacity at a small company that also got asked to do HR and what they will do is administrative HR and they'll know the numbers at payroll, they'll know the numbers and benefits but you're also going to want to know the numbers around things like hiring and retention and performance management and training and safety and compliance and celebration, you know how do we brand and get people more motivated. So if you're going to be good at budgeting in HR, you have to be comfortable with numbers. How many of you can read a public financial statement? Do you understand the difference between profit and loss? Are you able to communicate the financial opportunity when you're budgeting in HR. Look, if we put the money into this, I expected to get this return on it. When business owners that you're going to be dealing with, when they put the money into things, always think about the return on it. So think about marketing. When you put together a marketing budget, hey we're going to put these dollars in but we're looking for this return on an investment. So when you're doing budgeting, don't just talk about what the numbers are, also talk about what the numbers are going to help generate and then you'll really get ownership's attention. The other thing want you to understand about being skilled around budgeting, is be able to talk about the revenue equivalencies of these things. So if we reduce turnover, we spend $25,000 on this program and reduce turnover by $50,000, that's 100% return on investment plus it's the equivalent of us bringing in $200,000 in new revenue at a company like ours which means that it saves us from having to find 50 more clients or sell 50 more cars or build five more houses and you can understand company revenue activities and how that ties into your budget. When you can talk into those terms you'll be considered a strategic HR executive. You'll get paid more and love your job. Hope that helped. Take care.


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