How To Use Finance and Accounting in HR (Collection)

9. Financial Analysis of a Corporation’s Strategic Initiatives

Successful HR strategies are those that align with and support the firm’s business strategy. Successful business strategies are those that create shareholder value. To align a firm’s HR strategy with its business strategy, HR professionals must have at least a basic understanding of the financial models firms use to develop, describe, and evaluate strategic initiatives. That understanding is as important as, or maybe more important than, the ability to use financial models to evaluate operational decisions within the HR function. Recent survey data indicate that approximately 80% of all firms and more than 90% of large firms use discounted cash flow techniques to evaluate strategic ...