Are those with a commercial background suitable for an HR role?

The HR’s role is way different today than it was 30 years back. Now, HR leaders are required to have business acumen. But does it create any problems when someone joins HR with a business development background?

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Many say that HR, as a function, is pretty soft in nature. After all, it involves the people of the organisation. For professionals working at the commercial side of the business, growth of the business only lies in numbers and balance sheets, but for the HR it also lies in the growth of its people. That is because, businesses are run by their people, and the pandemic has only driven home this fact, highlighting it more than ever before for every big conglomerate or organisation across the world.

Many a time, we find that those from a commercial background move into HR leadership roles. In fact, global studies suggest that business acumen can be one of the major skills that top HR leaders lack, as 41 per cent of them expressed the desire to get skilled in that area.

What happens when some hard core business-development leader decides to shift to HR?

“The correct balance of the people aspect and the commercial aspect is the key to success for any HR leader today”

Rajesh Balaji, CHRO, Matrimony.com

No doubt the person understands business, but what about the people? After all, the main objective of any human-resource management function is to understand the needs of its people and align them with the needs of the organisation.

A Mckinsey report of 2021, which interviewed over 70 CHROs, suggests that post pandemic, the focus is to move to a people-centric approach in HR. But can someone with a core commercial or business acumen successfully lead the HR function to achieve a people-centric approach?

It would not be wrong to think that someone from the commercial side of the business would tend to focus on achieving business targets. In other words, such people would be very business minded, and not as sensitive to the ‘people’ aspect of the HR strategy.

Having the correct balance is the key to achieving success as an HR leader. Just having the understanding to create a welfare programme for employees or a robust compensation structure will not suffice.

Human-resource leaders in the industry believe that an ideal balance of ‘business acumen’ and ‘understanding of the people aspect’ in an HR strategy approach will be the key.

“The problem starts to begin when we retract into a shell. The need is to bring more unconventional ideas to the table”

Sharad Sharma, CHRO, Pramerica Life Insurance

“The correct balance of the people aspect and the commercial aspect is the key to success for any HR leader today,” says Rajesh Balaji, CHRO, Matrimony.com.

When an organisation decides to hire or appoint someone from a commercial or business development background as an HR leader, it has to be very sure that the person is capable of understanding its employees, in addition to managing teams. First and foremost, the person has to be a good people manager. “In the absence of such a balance of approach, we can expect dysfunctionalities in the organisation’s employer-employee relationship,” warns Mahipal Nair, CHRO, South Asia, Africa & Middle East, Nielsen IQ.

However, the fact remains that the HR function has transformed from what it used to be in the past. Today, it is no more just an administrative role, but more of a strategic one. The need to understand business and become a business partner is stronger than ever before. “As a function, the HR, has transformed from what it used to be 30 years back, with technology automating all transactional activities,” points out Balaji.

Moreover, since HR personnel have been very rigid and process driven for many years, the function itself needs to evolve. Innovative ideas need to come forth, which can only happen when someone sees the HR function through a different lens.

“We can expect dysfunctionalities in the organisation’s employer-employee relationship if the HR leader fails to create a balance between business needs and employees needs”

Mahipal Nair, CHRO, South Asia, Africa & Middle East, Nielsen IQ

“The problem starts to begin when we retract into a shell. The need is to bring more unconventional ideas to the table,” asserts Sharad Sharma, CHRO, Pramerica Life Insurance. This way when someone with experience in business development or finance joins HR, the person is able to see HR in a different light and is very well equipped to draw and align the HR function with the business strategies. This is because, such people are able to use a good mix of the business and people aspects in their approach.

There are many situations where having an understanding of the business as well as the people becomes important. In case of downsizing, for instance, it becomes a business need to reduce the workforce strength. However, the manner in which the people are shown the exit door gracefully, is where the ‘people’ aspect comes in.

Another instance when both the business and people aspect need to be considered together is when the organisation is being redesigned and employees are required to adapt to new roles. Yet another situation where such a balance is required is during the digitalisation process, when employees have to upskill themselves to stay relevant or face the risk of losing their jobs.

The most recent and perfect example of a people cum business leader can be that of Leena Nair who has been appointed as the global CEO of Chanel, a French fashion and apparel brand.

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