Beyond ‘being commercial’
In the coming years, Cheese also said he wants to see HR professionals be inspired about the impact they can have on their organisations in building innovative cultures, diverse workforces and driving the business agenda. As part of this, he emphasised the critical need for HR to be recognised as a business profession – something Newton feels it is still yet to achieve.
Newton says a recurrent problem among his candidate base is a lack of ‘business knowledge’. He says a surprisingly high number of the HR professionals he meets are ‘either unprepared or unable’ to talk business, which is particularly evident when discussing new roles. “It’s beyond ‘being commercial’, which we’ve been talking about for years,” he says. HR professionals need to think about and talk about both the financial priorities and realities of the business they work for in order to correctly align the people agenda to actual business need. If a business needs to reduce cost and improve operating income percentage, presenting an HR business case to the board that requires significant investment is always going to be viewed with skepticism unless you can talk about the return on the bottom line.”
Newton asks if you, as a senior HR professional, can give a fluid commentary on your company performance over the last 12 months in terms of EBITDA percentage, revenue and where you sit within your industry. “If you can’t tell me how well your business is doing, or at least discuss company turnover over the last 1-2 years, you’re not in tune with the reality of putting a relevant people agenda together,” he adds.
“Most businesses want HR to add value,” continues Newton. “At interview for an HR director role, the CEO will tell you the state of their business, present you with the numbers and ask: ‘what are your suggestions?’ If you can’t explain or have working examples, you’ll struggle to create the right impression and demonstrate your worth.
“You need to question how you’re going to upskill yourself for the future,” adds Newton. “This is where CIPD can play a part in helping HR professionals understand the numbers and how that should shape and affect the people strategy,” he suggests.