You may have heard people talk about business acumen being an important skill for employees to possess. But before you can hire people who have this skill, you have to understand what this trait is and why it is in your company’s best interest to hire more people who have it. Though it isn’t necessarily taught in business school, professionals agree that the ability to grasp how a business functions financially and how one’s job duties and actions affect the larger success of the business is very important. The Society for Human Resource Management (SHRM) even listed this skill as a key competency for HR professionals. If you want to have engaged, active and purposeful employees, read more about why you need to find and hire people with this specific skill.
They Understand the Financial Side of the Business
People with advanced business sensibilities understand the finances of a business. They know about cash flow and understand PandL and net profit margin. Money enables business to thrive and can be the difference between success and ruin. It is vitally important that your employees and prospective employees understand how money works in your organization.
They Have the Ability to be More Strategic
When employees understand what drives revenue and what activities are most important from a financial standpoint, they can then be much more strategic with their actions. Without knowing which job duties and tasks are more important from larger company standpoint, it becomes nearly impossible to correctly prioritize to-dos and spend enough time on the activities that ultimately lead to greater gains for a company. Employees that know how their jobs and actions affect the bottom line are more likely to act in a way that brings back greater returns to the company. Do you want employees who set and work toward strategic goals? Of course you do. Remember to prioritize business acumen when you evaluate any future employees.
They Share the Company’s Goals
When a company is successful, its employees are also successful. Not every person realizes this, which is why some staff members may have goals that are, at worst, contrary to company goals and, at best, irrelevant to those goals. If more employees possessed business acumen, they might be more likely to act in a way that benefits the company as a whole. Imagine a workforce that is all working toward the same goal because of their business savvy knowledge that what is best for the business is best for the people that work there.
They are More Skilled at Leading Others
Business acumen is important in all job levels and titles, but it may be especially important for managers who have multiple direct reports. Managers who do not understand the business they work for may fall into a habit of making uninformed decisions that do not positively affect the company. Managers with a strong business sense are able to understand company goals and align them with the goals of their team. Managers who display this competency are also more effective at leading others for a few reasons. First, they can express clear goals that others are motivated to follow and, second, they inspire others to be more engaged in the business as well.
They are More Engaged in Their Jobs
One way to help any of your employees develop better business acumen is to regularly share details about how the company is doing financially. Tell your employees the state of the company and explain any figures fully so you are sure they understand. This can also make people more engaged in their job because it firms up the connection between company profit and employee wellbeing. Some companies even choose to adopt a profit sharing method where a portion of company earnings are divvied up between their employees. This ensures that employees have a vested interested in the welfare of the company and may motivate some people to work harder. Business acumen is not just a meaningless buzzword that will fade with time. Being business savvy and fully aware of the connection between daily job duties and company finances is important for any employee, no matter what level they are in the company or what the details of their job are. Improve your current employees’ acumen by involving them in company financial state as much as possible and make sure to look closely for this skill in any people you intend to hire. For more information on hiring an all-star team and improving your business, check out the other resources available to you on Mighty Recruiter.