Chartered Accountants in HR

Chartered Accountants in the Human Resources Function

So what you do Mr Menda? I respond that I work in the Human Resources (HR) Function for a Bank

So which MBA school did you graduate from and which batch would be the next question? I respond that I am a Chartered Accountant (CA)

So what is a CA doing in a HR Function? The experience and reaction is similar when I speak to CA’s too

There perhaps exists a perception that you need to be from a Tier 1 MBA Institute with a qualification in HR to be in the HR function to start with. The knowledge, skills & experience you acquire and apply are important for you to be successful in a role which is why domains such as finance, audit, risk, taxation seem to be a safe bet for CA’s and the expectation is that they are best suited for roles in these domains. I see a need to demystify the HR Function and how CA’s can contribute and perform leadership roles in an HR Function. Of the various verticals in HR I believe there are quite a few that would benefit from the knowledge and skills of a CA. I have tried to elaborate what these verticals are typically responsible for and how CA’s can add value being in these roles.

In a large organisation HR Function will have the Head of HR supported by the below:-

• Business Partner
• Talent Acquisition
• HR Operations
• Learning & Talent Development
• Rewards & Benefits
• Employee Relations
• HR Risk Management

Of the above, there are verticals which I believe will benefit from hiring CAs in the function and have listed few based on my personal experience.

HR Operations

HR Operations is primarily responsible for end to end operations in the employee life cycle. Key responsibilities for this vertical would be to: -

a) Process payroll b) benefits administration c) ensuring statutory compliances, reporting d) ensure payments of full & final settlement for employees exiting the organization.

Additionally they would be responsible for People Database management, HR systems and applications. The team carries out reconciliations and interfacing with the finance function for costs that get charged to the business cost centres and P & L of the organization. Various continuous improvement initiatives, change programs and projects are spear headed by this vertical. They would be the point of contact for statutory auditors, internal auditors and regulators.

Reward & Benefits

Reward as a vertical own the various policies on pay & benefits and devise the pay strategy for the organization. They drive the pay cycle and performance management process covering the entire organization. In a pay cycle the Reward team will help business to agree on how the pay budgets can be best utilized to differentiate performance and reward high performers. Reward is responsible for governance of Trusts set up for retirement or end of service benefits such as Gratuity, Pensions, PF. The Reward team works with third party survey providers to agree on market benchmarks for compensation & benefits for employees in an organization depending on the role they perform. They play a key role in arriving at how pay should be structured and what elements of Pay can be towards reimbursements that can make it more tax efficient for the organization and employees. As part of pay they design ESOPs and how they can operate as a retention and wealth creation tool.

HR Risk Management

Typically we would have the HR risk management function sit independent of other verticals and provide first/ second life of defense. We would have maker /checker and various preventive and detective controls across all processes. The HR Risk management function enables proactively identify risks and how we manage these risks in a consistent manner. The Function works to drive the right risk culture and also build in assurance checks and reporting on periodic intervals to ensure the function is being managed well. This vertical plays a key role in ensuring ongoing statutory compliance and driving the culture of zero tolerance to any regulatory breaches.

HR Business Partner(HRBP)

The role of a HR BP is to partner with Business to drive the People strategy and agenda for the organization. In the current competitive environment every organization is working towards increasing revenue and reducing costs. As HRBP the role is to ensure we work to identify opportunities to be more efficient and deliver on our business objectives. The BP’s help understand the impact of change and provide expertise on people matters to Business leaders. They work closely with leaders to drive engagement and retention of people and deliver on the people agenda for the business.

As CA’s we can play a key role in the above 4 verticals in HR

• Our knowledge of tax, laws, regulations help in ensuring statutory compliance to regulations and laws. We can play a key role and ensure protecting the organization from any fines, penalties and sanctions.
• CA’s have in depth income tax knowledge and understanding of how various benefits and perquisites need to be taxed and also a pay structure that is compliant and efficient.
• Our knowledge on financial accounting helps in managing HR owned accounts, reconciling of accounts and also ensuring accurate cost reporting to other Functions such as finance
• Our strong analytical ability will help in providing great insights on People data.
• Our structured and methodological approach coupled with problem solving skills will help in managing complex projects and change programs.
• Our financial acumen helps contribute to the organization’s goals and to identify opportunities to be more efficient. Our ability to be objective and back our decisions with data always is beneficial to arrive at the right outcomes for the organization. People costs are one of the largest costs for most of the organisations.
• The ability to do number crunching always comes handy when it comes to annual pay cycle to agree on budgets, how the budgets would get utilized and also doing modelling and scenario testing.
• Knowledge of accounts, finance and audit is extremely valuable when it comes to governance of Trusts and administration of Trusts that are set up. ESOP’s and how they are managed end to end can get quite technical but for CA’s who understand the P & L and Balance Sheet it becomes relatively easier

After having personally worked across different verticals of the HR function across multiple geographies and organizations over 15 years I do believe there is a need to have more CA’s work in the HR Function in all organizations. I know of leaders in the HR Function who immensely value the diversity in skill and thinking a CA brings to the team and in fact have ear marked roles they believe they would have CA’s only do. As much as we would want more CA’s aspiring to work in a HR Function we would want HR Directors and Heads of HR to be more welcoming of CA’s to the function and benefit from the skills, knowledge and experience they have to offer.

CA. Maneesh Menda, DISA, DIRM is a Chartered Accountant with experience of working across different domains such as Finance, Audit, Operations Tax and Human Resources and currently is Senior HR business Partner with Royal Bank of Scotland.

The views expressed above are personal