Business acumen critical for HR: Survey

Priorities raise questions about what’s covered in CHRP certification, says Queen’s director
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 05/06/2011

Canada’s HR certification could use some revamping, especially at the entry level, judging by the results of a national survey of Canadian HR professionals conducted by Queen’s University in partnership with the Human Resources Institute of Alberta (HRIA) and the International Personnel Management Association (IPMA).

When asked about the top five critical pieces of knowledge required by HR professionals today, business acumen came out on top at 16.4 per cent, followed by employment law and legislation and talent management, both at 11.8 per cent, broad HR knowledge at 8.3 per cent and employee or labour relations at 8.2 per cent.

“What’s interesting here is business acumen was number one and it was way out in front,” said Paul Juniper, director of the Industrial Relations Centre at Queen’s University in Kingston, Ont.

“What they’re saying is there’s a need for a balance between the more traditional HR education in broad areas of HR — in labour relations, employment law — and areas where the CHRP (certified human resources professional designation) doesn’t necessarily give you much of a background, such as business acumen.”

When asked to provide a list of the top five critical skills required by HR professionals, communication (19.8 per cent) was the first, according to the 451 respondents, followed by analytical/critical/strategic thinking (18.8 per cent), interpersonal skills (10.4 per cent), technical skills (10 per cent) and conflict resolution (7.1 per cent).

“That supports what I’m saying, that technical skills are necessary but not sufficient and also the technical skills are now being overwhelmed by things in other areas,” said Juniper. “I’m not surprised by it but it has implications for what kind of training we give people. My thinking goes to the CHRP and do we teach these skills in the CHRP?”

In the United States, the Society for Human Resource Management (SHRM) teaches business with an HR context in entry-level courses, such as accounting, business management and marketing, he said.

“It’s very different than what we’re doing here,” said Juniper. “One of the problems we’ve got in a way is we’ve created a silo of very well-trained HR specialists. The problem is if you want to turn those HR specialists into business professionals and business leaders, there’s a gap in their knowledge.”

By attacking this straight-on at the lower end of the demographic, SHRM is “going to enable HR people to move into other roles as well as HR in the leadership function, and that gives people immense background and opportunity then to move to the senior level,” said Juniper.

“People get restricted because they become known as specialists in HR and don’t know enough about the other areas because they haven’t experienced it.”

Business acumen is not necessarily a specific discipline but a broader area of general knowledge, particularly around financials, said Nora Molina, executive director at the HRIA. That means understanding the bottom line and what drives the economic engine of a business. Strategic thinking then puts all of these things together at a broader, higher level.

“Not that (HR professionals) are going to need to know how to calculate financial data but understanding it is really what’s critical for future success and particularly for individuals that want to succeed into more senior leadership,” she said.

The issue in Canada is how and when to teach business knowledge and acumen to HR specialists, said Juniper.

“It would be great to ask CEOs, ‘How limited are your HR people by a lack of knowledge outside of HR?’” he said. “I would challenge HR professionals to think about what they want in their career and if they aren’t aiming at senior-level management, why aren’t they?”

Degree requirement helps

There’s a good possibility business acumen is an area that should be taught earlier in school but the recently introduced degree requirement helps fill that need, said Molina. (As of January 2011, CHRP candidates who have passed the National Knowledge Exam must have a bachelor’s degree to register for the National Professional Practice Assessment.)

“That’s one of the aspects that that degree requirement is intended to backfill,” she said. “Because when you look at somebody coming in with a degree, within that HR degree, in a business program, it includes all of that general business knowledge.”

When it comes to immediate priorities, succession planning (8.8 per cent) came out on top, found the survey, followed closely by employee engagement and talent management (7.7 per cent each) and training, learning and development (7.3 per cent). Long-range, the priorities are similar: succession planning (13.6 per cent), talent management (11.6 per cent) and recruitment (7.4 per cent).

“If (HR professionals) are not currently factoring in age-related retirements into their staffing needs for the next five years, it’s critical they do so and do it now,” said Juniper.

The top five challenges for HR, according to the study, are talent management (73.8 per cent), employee engagement (58.5 per cent), succession planning (54.3 per cent), change management (46.6 per cent) and organizational culture — creation and maintenance (42.1 per cent).

The focus on talent management is not surprising given Canada’s economic situation and slow recovery from the recession, said Molina. And there are emerging news and indicators suggesting the labour shortage issues faced in 2008 will come again, and potentially be even bigger, in 2012.

“Everybody’s being a little bit cautious and you don’t want to be too optimistic in suggesting our economic recovery is immediately ahead of us. Everybody is still feeling the echoes of what we went through in the last couple of years and approaching things cautiously.”

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