Business acumen needed for senior roles (Analysis)

Definition of 'business acumen' evolves as HR professionals ascend ranks
By Claude Balthazard
|Canadian HR Reporter|Last Updated: 04/05/2009

On the topic of business acumen among HR professionals, respondents to the most recent Pulse Survey are in general agreement on several fronts.

On the whole, business acumen is seen as necessary for everyone who aspires to more senior HR positions, it is developable and the key to developing it is a breadth of business experience, especially of the cross-functional kind. Most respondents also agree HR associations should do what they can to support this kind of cross-functional experience.

Nearly nine in 10 respondents (89.3 per cent) agree business acumen is developable, at least to some degree — although several refer to the importance of individual desire and motivation.

About 40 per cent of respondents say the business acumen of HR professionals they know is either “strong” or “quite strong.” A further 40 per cent say the business acumen of HR professionals they know is “OK.”

Business acumen may well be in the eye of the beholder. Of those who have not yet joined the workforce, 60 per cent say the HR professionals they know have strong or quite strong business acumen. This proportion falls to 50.3 per cent for those with zero to four years in HR; 45.7 per cent for those with five to nine years; 36.2 per cent for those with 10 to 14 years; and 30 per cent for those with 15 to 19 years. Then it rebounds slightly to 34.2 per cent for those with 20 to 25 years in HR and 35.8 per cent for those with more than 25 years.

The conclusion? Generally speaking, the longer you have been in HR, the less likely you are to say the HR professionals you know have strong business acumen. It is probably safe to say business acumen increases with experience (though not for everyone, it would seem) and this would lead us to expect ratings of business acumen to increase with tenure.

For instance, 53.1 per cent of entry level HR professionals say the HR professionals they know have strong or quite strong business acumen. This proportion drops to 40.4 per cent for middle-management HR professionals and 29.1 per cent for HR professionals at the executive level.

What may be happening here is we have a shifting standard with experience or seniority. The more experience you have, or the more senior you are, the higher the standard for business acumen becomes and the lower your assessment of the business acumen of HR professionals. So when an HR student and an HR executive think “business acumen,” they are probably not thinking about the same thing.

There is also general agreement about the most effective ways to increase the business acumen of HR professionals. Based on the comments, it is generally agreed there really isn’t a single way to develop business acumen and a combination of approaches is probably best.

It is also generally agreed there isn’t a good substitute for experience, especially cross-functional experience. Indeed, comment after comment refers to the need for experience outside of HR.

Many respondents talk about coming from other fields or having spent significant time in other functions. Some even plan for their next position to be outside of HR. The idea that HR professionals could or would move in and out of the HR profession is certainly challenging from an association perspective.

In this context, many respondents think HR associations should make it easier for HR professionals to gain meaningful experience in other functional areas. Indeed, two-thirds (67 per cent) think associations should make it easier for HR professionals to take assignments in other departments.

There is a whole variety of ways survey respondents indicate cross-functional experience can be achieved. An interesting point, made by a number of respondents, is mentoring acts as an accelerator of learning.

More than two-thirds (68.7 per cent) of respondents agree the Certified Human Resources Professional (CHRP) certification process should assess business acumen. A number of respondents point out there is only so much business acumen that should reasonably be expected of CHRP candidates. Many respondents suggest any coursework requirement should include more business courses.

Claude Balthazard is director of HR excellence and acting registrar for the Human Resources Professionals Association in Toronto. He can be reached at cbalthazard@hrpa.ca or visit www.hrpa.ca for more information.

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