Finance and Role of HR Manager: Financial Information and Tools

This report delves into the crucial relationship between finance and the role of a Human Resource (HR) Manager. It highlights how finance is integral to HR activities, particularly in recruitment, cost-benefit analysis, employee management, and strategic planning. The paper emphasizes the use of financial information and tools in HR decision-making, such as acquiring new talent, training employees, and ensuring the accuracy of HR strategies. Furthermore, it discusses how a strong understanding of finance enables HR managers to make informed decisions, save costs, and effectively manage human capital. The report concludes by underscoring the significance of financial knowledge and skills for HR managers to make effective investments in HR activities and achieve organizational goals.

RUNNING HEAD: FINANCE AND ROLE OF HR MANAGER 0
Finance and role of HR manager
Student’s Details-
JANUARY 10, 2020

FINANCE AND ROLE OF HR MANAGER 1
Introduction
Human Resource Manager is involved in the undertaking the activities of recruitment
and undertaking the decisions for the financial longevity of the organization (Oh, Blau, Han,
& Kim, 2017). There is great role of finance in the decision making of HR in the light of the
facilitation of financial information. Here, the paper has discussed the role of finance and use
of financial information for the managerial decision making by the HR manager and the value
of knowledge of financial information.
Role of Finance in the Life of HR Manager
There is role of finance in the life of HR manager as finance is required for the
process of recruitment and determining the cost benefits of recruitment (Schiff & Schiff,
2016). It also specifies that finance is required for the hiring new talent into the organization
and management of the existing employees through spending a significant sum of money in
the for increasing the efficiency of the human resources. HR mangers use finance not only for
deciding the salary of the employees but also making investments into the motivational
programs for the employees. HR manager need to make analysis of the requirement of money
for carrying out various activities under the human resource function.
Apart from this, finance is required for the human resource planning made by HR
manager of an organization that can lead to the attainment of the organizational goals.
Finance is required for the HR functions such as the recruitment, selection and training and
development of the employees (Higgins, 2014). In some way, HR managers need finance for
the making promotions, giving bonus and providing allowances as per the policies of the
organization. It is important for the HR manager to make the forward planning of the HR
activities which requires the facilitation of the finance that can later be used for the adequate
planning and training budget program. The department of finance and Human Resources go
hand in hand wherein the various actions are undertaken for the continuous management of
the human resources in an efficient way.
Use of Financial Information and Financial Tools
HR decisions highly rely on the financial information and financial tools that provide
assistance to HR managers to undertake several decisions for the proper management of
workforce through ensuring all the strategic aspects of the organization (Storey, 2014). The

FINANCE AND ROLE OF HR MANAGER 2
decisions of HR manager depend upon the financial information that provides the basis of the
ways to be used for the acquiring of the new talent. Besides, financial tools are used by the
HR manger in order to ensure the accuracy of the HR strategies being made for the success of
the organization. Access to financial information can ensure the tendency of quality of
decisions for the hiring and making the employees trained in order to make step towards the
path of success.
Further, for successful human resource planning, there is need of financial
information which. are effectively used for the making the effective decision and handling of
the pertinent data of the employees. Financial and accounting tools are crucial for the making
the appropriate decisions that can ensure the effective training and human resource planning
of the organization. HR managers rely on the financial information and tools to get the real
time details of HR activities and the proper accounting of budgets and the incurred cost
which is important to make the effective decisions by HR manager (Sao, 2017). HR manager
take into account the incomes and expenses that are being evaluated from the accounting
tools that are used for the accessing of the financial information that allows the HR manager
to improve the quality of decisions undertaken.
Knowledge of Finance and Decision Making
Further, better knowledge of finance can lead to the better decisions of the manager as
it helps in getting insights of the financial facts and figures that can ensure the quality of
decision taken by the HR manager (Venkat, 2018). This can help the manage in saving time,
money and thereby making cost comparison for making the best decision. Thus, the decision
maker can make the effective decision through the evaluation of the accounting variables that
can ensure that managerial decision is undertaken through the prior knowledge and
experience of the manager in finance field. Additionally, knowledge of finance is required for
the access of the financial data of the employment and recording of the data to make
appropriate decision that can be helpful in the making of the more accurate decision in a
timely manner.
However, HR manager can use the pertinent knowledge and skills for the handling of
the financial information that can be used for the management of the data that can be used by
the HR manager for the adequate and proper financial analysis of the data of the employees in
the financial decision making and making the HR approaches through the financial
competence (Devine, Molina‐Sieiro, Holmes Jr, & Terjesen, 2019). Skills and knowledge of

FINANCE AND ROLE OF HR MANAGER 3
the manager can help in the efficient decision making that can be through the financial
knowledge that can ensure in the proper utilization of the money through the capital
budgeting to ensure that the better decision is undertaken for the investments into the various
strategies and plans for the human resources that can be helpful in the making of the effective
decision that can be ensured through the gathering of the required financial information.
Conclusion
To conclude, it can be said that finance plays a major role in the decision making of
the HR manager in the making of investments into the HR activities through the recruitment
and the training and development of the employees. HR managers make use of the financial
information and financial tools that can ensure the better decisions by the manager. Here, the
paper is successful in the determination of the understanding that skills and knowledge of HR
manager with respect to the finance and the financial information and tools used for making
appropriate decisions.

FINANCE AND ROLE OF HR MANAGER 4
References
Devine, R., Molina‐Sieiro, G., Holmes Jr, R., & Terjesen, S. (2019). Female‐Led High‐
Growth: Examining the Role of Human and Financial Resource Management.
Journal of Small Business Management, 57(1), 81-109.
Higgins, J. (2014, November 1). Bringing HR and Finance Together with Analytics.
Retrieved January 10, 2020, from SHRM: https://www.shrm.org/hr-today/news/hr-
magazine/pages/1114-hr-finance-analytics.aspx
Oh, I., Blau, G., Han, J., & Kim, S. (2017). Human capital factors affecting human resource
(HR) managers' commitment to HR and the mediating role of perceived
organizational value on HR. Human Resource Management, 56(2), 353-368.
Sao, S. (2017, March 2). HR and Finance: A strong relationship for your business success.
Retrieved January 10, 2020, from Financial Force:
https://www.financialforce.com/blog/hr-and-finance-a-strong-relationship-for-your-
business-success/
Schiff, J., & Schiff, A. (2016). Get in gear! Team up with HR and IT to transform the future
of finance. Strategic Finance, 97(10), 24-32.
Storey, J. (2014). New Perspectives on Human Resource Management (Routledge Revivals).
Routledge.
Venkat. (2018, March 4). The Complete Guide to Choosing the Right Financial Management
Tools. Retrieved January 10, 2020, from Kissflow: https://kissflow.com/finance/best-
finance-management-tools/