By Paul McNamara. Published on 30 March 2015
Paul McNamara, Partner in HR Interim Management, says a lack of commercial experience is creating a drought of strong HR business partners with the right skillsets to help drive a business forward.
He warns that there is an increasing “black hole” of commercial skills and financial expertise, as today’s HR professionals instead choose career routes such as talent management and organisational development.
Paul wants to see more organisations and HR Directors encouraging in-house talent to become more commercially focused, gaining real financial acumen and understanding how a business makes its money. Only then, he says, will the title of HR Business Partner earn the respect it deserves.
Turn the clock back a decade or so and you could take your pick of senior HR professionals who had cut their teeth on battles with the unions and disputes that make today’s pay and pension rows look like small fry.
They had been exposed to the hard knocks and commercial realities of tough employee relations, negotiating with a workforce that was determined to stick up for its rights in the face of new technology and systems that were deemed essential to future survival.
Today however, the working environment has changed. People tend to specialise earlier in their career and the emphasis from both clients and HR practitioners alike leans more towards skills such as talent management, organisational development and cultural development.
While in many respects that is to be applauded, the net effect has been to create a shortage of those individuals who have the commercial experience to really make a success of the role of HR business partner.
Nick Holley from Henley Business School, writing in the new CIPD document, Changing HR Operating Models, says: “The HR business partner role is very different. It’s about delivering innovative ways of developing organisational and people capability, building on deep data-driven insights into the strategic and commercial direction of the business.”
His view is that the role requires a “different level of thinking”, adding: “The simple fact is that the ‘ask’ has risen faster than the capability of many people in HR to deliver it.” The result, he says, is that many HR business partners have been unable to deliver what is required by the business.
I have to agree with him, and for two reasons:
“Black hole” of commercial skills
The first, as already mentioned, is this “black hole” of commercial skills – there is a very definite skillset required to be a high quality HR business partner. To be involved in driving the business forward you need to have commercial experience, financial acumen, the ability to understand profit and loss accounts and see how the business really makes its money.
Only then can you use that data and information to successfully create the right people-based solutions to address the essential business challenges.
By virtue of the role, these will be very bright individuals, strong influencers who can stand up for the processes they have confidence in, and who are willing to adopt a flexible approach to succeeding in their goals.
They will often have come from a blue collar manufacturing or production environment where respect for the HR function has been in short supply and a robust and resilient attitude, combined with a clever and intelligent approach, has been the only way to get things done.
Lack of career development
The second reason is that today very few organisations appear willing to develop junior HR talent or promote in-house HR graduate schemes – preferring instead to dip into the recruitment pool and attract “ready-made” expertise.
This is all very well, but if a shortage of those individuals exists, then supply and demand will never meet in the middle.
It’s further complicated by the fact that the term HR business partner means different things to different people and many will lay claim to the title without really understanding its true meaning.
We’re all familiar with Ulrich’s three-box HR model (shared services, centres of excellence and HR business partners). Although it is widely agreed that there is not one model that fits all organisations, it is still considered to be a good starting point.
My view is that if we can’t tick that third “business partner” box to everyone’s satisfaction, then we are in danger of losing the fulcrum of the entire HR function.
What’s the solution?
Those organisations fortunate enough to have strong HR business partners value their experience and expertise and do everything they can to hold on to them.
For others, there’s a need to create new teams with those skills – and that’s down to the HR directors and the criteria they are looking for when recruiting.
Experience shows that it’s incredibly difficult to move from a transactional HR shared service centre role into an HR business partner role. Likewise, if an individual’s experience is focused on areas such as talent management and employee engagement, neither provide the hard commercial edge which is required higher up the ladder.
Those more commercial skills can be developed and one way is to move into a non-HR role – perhaps through secondment – into a commercial business, providing valuable experience and exposure. HRDs can also help by encouraging more junior colleagues to spend time in the commercial teams, to understand what makes the business tick and understand the vital cogs of employee relations.
Another solution is to promote more relevant academic courses. It is telling that when HR professionals were asked about the worth of various academic courses toward a “successful career in HR”, 83% said classes in interpersonal communications skills had “extremely high value”. Just 2% chose finance.
Only by addressing these issues do we stand a chance of filling that “black hole” of future HR business partners and ensuring that the word “partner” is valued in its truest sense and not simply another label at the top table.
Paul delivers search and selection assignments across all HR disciplines and industry sectors, operating at salaries from £80,000 to £180,000.
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