Business Acumen: A Must-Have Skill for All HR Professionals
Today, HR Professionals are perceived by most business leaders as just relational and administrative personnel incapable of strategically aligning human resources initiatives with the business priorities.
A recent survey shows that global organisations worry about the gap between HR priorities and business priorities. When asked, 8% of HR leaders think their teams lack necessary skills, and 42% of business leaders acknowledged that their Human Resources teams aren’t performing at their top level.
Most business executives worry about the non-alignment of their organisation’s business strategy and their human resources initiatives. To tackle this problem, one must look at the root causes.
There are two leading causes of the ‘gap’ which business executives are worried about. The first reason is that many HR practitioners lack the requisite qualifications and skills for applied business management. Secondly, companies do not invest in the development of business acumen for their HR team.
An HR professional with business acumen skill would have a proper understanding of various areas of the business such as finance, clients, products or services, competitions, markets, etc.
Without this vital business skill, there would be a void between HR’s preparedness and the company’s goals, and this slows down both growth and productivity. The process of filling this void starts with acquiring business acumen.
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What is Business Acumen?
Business acumen is the understanding of business situations and the ability to make interpretations and effective business decisions based on this understanding.
Simply put, business acumen means having an in-depth knowledge of how an organisation makes money. HR professionals need to understand how their organisation makes money, and by extension, how their customers make money.
Is Business Acumen a Skill?
Some people have more flair for business than others. They tend to understand business situations readily because they have developed their business instincts to a stage where managing such situations are seemingly natural.
However, the belief is that business acumen is learned rather than innate. While its application may seem intuitive, HR professionals can learn and acquire all the skills needed to become business savvy.
Why is Business Acumen a Key Skill for HR Professionals
Business acumen is a necessary skill which should be honed. Here are the reasons why business acumen skill is a must-have for every HR practitioner:
It Fosters The Relationship Between The HR and Other Members of The Organisation
To develop business acumen competencies, the HR team needs to meet and discuss with other members of the organisation. This will improve the bond within the organisation by understanding the relationship between job roles and interplay of functions. Also, it will help the HR team to understand better the tasks each team performs.
It Helps The HR Team to Make Essential Contributions in Business Decisions
The HR team has valuable data and official information about employees. The employee data can be converted to useful and powerful tools for making informed business decisions.
Other information on skills and experience acquired by employees can be accessed and used when the need arises. This can also create an opportunity for the growth of both employees and the organisation.
It Improves The HR Team’s Productivity
When the HR team improves their business acumen, they improve their management of time and money. These two are essential for the survival of any business.
It Helps The HR Professionals to Understand Their Organisation Better
Business Acumen will help foster a deeper understanding of the organisation’s market and trends. Also, knowing the clients can bring a deeper level of understanding the purpose of each task an employee performs.
With a good grasp of business situations and implications, HR can contribute effectively to the overall business strategy of an organisation.
Ways you can Improve your Business Acumen Skill
As aforestated, Business Acumen is a learned skill, and there are effective ways you can hone it. They include;
Improve your Knowledge of How your Organisation Makes Profit
For a start, learn how your organisation spends and makes money. Although financial literacy is a broad topic, learning about your organisation’s profit or loss statement is a good place to start. A discussion or meeting with the company’s finance department will help in this regard.
Take it further by learning about taxes, revenues, sales, etc. Think about activities that might help you understand your company’s competitors or the economic activities going on in the country.
Do you need to meet your marketing team to understand the activities of competitors? Talk to them. Do you need to attend a business summit to understand the economic situation around you? Please do it. When it comes to knowing your competitors, be ready to do your research.
Participate in Business or Professional Activities
Join a professional association of your choice. Choose a professional organisation that aligns with your organisation’s business strategy.
Develop your Team’s Business Books Library
This will not only help in improving business acumen among the team, but it also shows that the team is dedicated to helping its members improve their business sense. The book club should be devoted to assisting the HR team to learn about business and hone their business acumen competencies.
Understand your Clients
This goes beyond knowing your clients by name; you need to learn more about the top clients of your organisation, most especially their type of business (product or services). It might be challenging to do this without contacting other departments. Be ready to make inquiries from the sales department or departments involved.
Listen to Discussions and Read Contents About Businesses
Consume content that improves business acumen. These content (books, podcasts, news, newsletters or webinar) will help hone your skill. They also give knowledge about business insights. Try reading up on topics related to the stock market, accounting, business and entrepreneurship.
In conclusion, you can enhance your HR practice and relevance in your organisation through the acquisition of Business Acumen. You will be valued as a business team member based on your contributions to the company’s productivity and growth.
To hone your business acumen competency and gain practical insights that will help you develop the ability to discern what it takes to make your organisation’s business successful click here to register for a free webinar on Business Acumen for HR Professionals.