The Grammar of Finance
This financial statement shows profitability over a period of time.
What is the Income Statement?
This metric measures the return generated for every dollar spent on people.
What is HCROI?
According to the presentation, executives do not fund features; they fund this.
What are financial outcomes or ROI?
This statement shows what a company owns, owes, and what is left over at a specific moment in time.
What is the Balance Sheet?
This metric is calculated as replacement cost plus lost productivity.
What is attrition cost?
This is the first step in building a persuasive business case.
What is framing the business problem?
This financial statement is the “ultimate truth” because it shows how much cash the business actually generates.
What is the Cash Flow Statement?
The presentation showed that even modest increases in employee engagement can create outsized value because they improve this.
What is workforce productivity?
This tool links an HR initiative to human capital metrics and then to financial performance.
What is the causal chain or the causal model?
Company A had less revenue than Company B, but this higher percentage made it more profitable per dollar earned.
What is net profit margin? (6.3% vs. 3.5%)
The financial benefit of reducing attrition is often much larger than leaders expect because turnover costs include this hidden factor in addition to replacement expense.
What is lost productivity?
he presentation argues that the correct comparison is not the cost of the program versus $0, but versus this.
What is the cost of doing nothing?
This financial principle explains why a company may prefer to spread a payment over several years rather than pay the full amount today.
What is the Time Value of Money? (Chrysler case)
Reducing turnover creates financial value because it avoids these two categories of cost.
What are replacement costs and lost productivity?
This is the final step in the business case process: translating HR outcomes into this language.
What is the language of finance (or boardroom-ready financial impact)?
Great HR programs get funded when HR leaders stop describing activities and instead translate them into this.
What are boardroom-ready financial outcomes (or business impact / ROI)?