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A commercial understanding is one of the top skills asked for by employers looking to hire HR Business Partners (HRBPs), however, it is also one of the biggest gaps we’ve noticed in candidates recently. I would estimate that only around 1 in 5 candidates are able to demonstrate this attribute clearly. So, why is a commercially-focussed approach so valuable, and how can HRBPs build their capabilities in this area?

The Untapped Potential of a Commercial Approach

In the past, HR professionals have been focussed primarily on managing processes and the end-to-end employee lifecycle. These types of roles are targeted on more of the day-to-day activities in the business, which is still an important role but neglects an opportunity for Human Resources. HR typically already works across most areas of a business, and because of where it sits structurally, this easily positions people for further collaboration around strategic activities.

Whilst the foundation of HR remains the same, a commercial edge has become essential for today’s HRBPs because it enables them to understand the business strategy in people terms. Top performers will be able to analyse the commercial, strategic and financial aspects of the business, look at how each function operates both singularly and as part of the bigger picture, and then translate that into targeted initiatives that will impact the bottom line. This could involve working closely with leaders across all areas of the business to offer strategic insight, implement new procedures, create employee tools, draw up new policies and provide services that will strengthen the organisation as a whole. However, with roughly 80% of candidates lacking a strong commercial understanding, this represents significant untapped potential for businesses, as well as a great opportunity for candidates to stand out in the market.

Tips for Building a Commercial Focus

One of the biggest challenges around a commercial approach to business partnering is that HRBPs often get caught up in the daily tasks of HR management, which prevents them from realising their full potential on a strategic level and playing a measurable role in a business’ profitability. Sometimes, this comes down to the way some HR functions are set up – not allowing the teams the time to really take on that strategic role and making it more difficult for them to develop this understanding as a result. In response to this, candidates can drastically increase their attractiveness by taking matters into their own hands and actively seeking opportunities to expand the commercial skillset they can offer future employers.

There are a number of ways HRBPs can develop their commercial knowledge to achieve better marketability and business results. The following aspects will help give you that edge:

• Finding a good mentor to help build commercial knowledge is an excellent starting point, as having someone you can confide in and ask questions is invaluable.
• Understanding the broader market and the organisation’s competitors, including what they are doing and where the business sits in terms of the competition.
• Thinking critically about customers’ needs and identifying activities that will address the target market and drive the business forward.
• Getting involved in leadership meetings to build understanding around key objectives, the target market and any challenges. (I see a lot of people doing this and doing it well, but it's about taking it to the next level. They need to think about how they can help drive it from a people perspective.)
• Having access to the business strategy in order to design people initiatives and programmes to support it, and thinking through questions such as ‘How are we going to achieve this strategy through our people? Do we have the right sales capability? Do we have the right people in the right roles? Do we need to build capability in that area? Do we need to build branding and marketing in this area?’. (If you don’t have the ability to do this in your current position it’s worth speaking with your manager about how your role could be expanded to include this.)

Additionally, the most important thing any HRBP can do is to spend time in every area of the business so they can develop a practical understanding of how each unit works and the way it contributes to the wider organisational objectives. Where possible, a great way to achieve this is by shadowing different functions and spending “a day in the life” to become familiar with what their role is, how they make a profit and the challenges they face on a day to day basis. For example, working with the finance team helps to build financial acumen and gain a more thorough knowledge of profit and loss. HRBPs can then use this to think about how people initiatives can affect revenue. Likewise, spending time with the sales team to observe their daily activities will foster an understanding of the market, the competitors and existing sales approaches. This knowledge can then be applied to sales objectives and used to find ways for the business can improve people initiatives to achieve company goals.

Final Thoughts

The value of developing a commercial awareness is an opportunity that should not be underestimated, and gives HR Business Partners the tools and freedom they need to make a significant impact on the success of a business. If you’d like more insights or support with your HR career development, don’t hesitate to get in touch today.