How Can HR Speak the Language of Finance
3
min read
15 September 2025
The attached paper provides HR with a practical, finance-grade approach to linking people decisions to business outcomes. It demonstrates how to benchmark the key P&L lines (as a percentage of revenue for COGS, R&D, Sales & Marketing, and G&A), translate the gaps into talent moves, and present the findings clearly to boards and operators. The case example normalizes peers and surfaces patterns and then ties those directly to headcount mix and capability intensity—exactly the bridge HR needs for credible workforce planning.
Why this is important now (and not just a Finance exercise):
- HR owns the capacity, skills, and location calls behind each cost line; to be credible, we must speak in % of revenue, gross-margin levers, and unit economics, also, and not just headcount.
- Benchmarking reveals where strategy—not just “efficiency”—drives talent shape (e.g., higher R&D → deeper technical talent; higher S&M → larger commercial teams).
- The paper shows how to choose the right peer basket, normalize data, and use visuals to make non-financial audiences “get it” quickly, ideal for HR-led readouts.
What HR can do with this (by function):
- Strategic Workforce Planning: Set capacity targets by function against peer ranges; align org shape to growth stage and region; refresh quarterly.
- Talent Intelligence: Pinpoint where to lean into skills (e.g., innovation vs. maintenance in R&D), compare regional cost/talent trade-offs, and spot true outliers vs. intentional bets.
- Recruiting: Calibrate hiring mix and velocity to the cost model; prioritize roles and locations that improve payback while protecting growth engines.
Suggested next steps for your consideration:
- Align on the peer set and business model comparable; 2) Normalize to %-of-revenue and gross-margin components; 3) Run a first pass to identify 3–5 talent moves; 4) Co-own an HR-Finance cadence to track progress and re-benchmark. This is how HR leads—with numbers and narratives that tie skills, roles, and locations to profitability and growth.
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