Essential learning to progress your HR career
Is the HR function really aligned with business goals and objectives?
I remember a gazillion years ago, being one of the few specialist recruiters requesting “commercial savvy” and basic financial knowledge as key criteria in my European job ads. It wasn't a radical request in the USA market, but was certainly an unusual ask for the European countries at that time. Today, these requests are increasingly common in HR job advertising right around the world.
It seems like every HR practitioner claims to have these competencies, but here’s the rub. When we ask some basic questions to evidence these claims, most HR practitioners cannot give a successful or convincing answer.
Try these couple of easy tests of commerciality for yourself:
1. Give me an example of one of your initiatives which has directly increased revenue streams for the business (most Human Resource practitioners launch into a cost cutting example which does not answer this question; or mutter about how their initiatives never had a measurable outcome)
2. What was the quantifiable outcome of your training/engagement/OD/recruitment/etc initiative? (most HR practitioners at this point mumble how it is not their job to measure results and/or that the company culture doesn't measure success in this way and/or that the initiative was never designed to be measured – ouch!)
Why should HR be given a seat at the executive table?
One of the most common gripes across the HR community in every country is not having HR representation at executive level. But if you want to sit with the C-suite or even the Board, or even within a business management team, you must have at least basic accounting principles. Every other corporate function leader can talk through dollars and cents, so why does HR remain the exception? After all, how can you be trusted with budget responsibility for your own function, if you don't know how to track and understand the numbers? And how can your advice be taken seriously by business leaders, if you don’t truly understand the financial factors that affect their decision making?
We recently advertised concurrently across our network, for a particularly interesting and challenging international HR VP role, based within Asia. Each ad was viewed by over 5000 people within a week. One ad received over 400 applications. The second ad, received just 7 applications. Same location, same six figure hefty salary package, similar hiring criteria advertised in precise detail so job seekers would be crystal clear on the requirements and challenges to know if they really had the expertise needed. So what was the difference?
The second role very clearly stated that applicants would need to be able to understand and interpret P&L reports and balance sheets. And that this would be tested as part of the hiring process. Interesting and disappointing for the profession, that there were so few people prepared to have their financial knowledge checked.
Is this affecting your HR career?
In fairness many HR functions around the world still hire for HR technical skills only. But there is a growing number of companies which have a very different approach to the commerciality expected of HR. Companies where the function is expected to deliver P&L value beyond being just another support function cost centre.
Without exception, every executive search project across the entire HR function, within our firm in the last 12 months, has had a requirement for Directors, VP’s and CHRO’s, to be able to read and interpret a P&L and a Balance Sheet. Sadly, this requirement cuts down the available talent pool in too many areas of HR. There is a noticeable shift in the types of people getting appointed to Vice President HR roles and to the top CHRO post - professionals who have advanced financial knowledge and who are very comfortable with ROI measures and data - many of whom have actually undertaken some level of formal financial qualifications.
Yet despite years of HR clamouring to "get a seat at the table", and the vigorous claims of being true HR Business Partners, we continue to see 2 very different camps of HR job seekers. Those who think and talk purely like HR practitioners, and those who think and talk like business leaders who just happen to have the HR specialism in their "toolkit".
Which one are you?
About the Author
Leanne Morris is well known as a both an outspoken advocate and critic of the HR profession. With long standing networks across 94 countries in all specialist areas of the function, and a multi- continent work history, she is a sought after subject matter expert on international HR hiring trends and HR hiring best practice.