2023-09-26-What does it mean to be a "business-savvy HR"?

What does it mean to be a "business-savvy HR"? -


This article discusses the understanding of the topic of "business-savvy HR" based on the author's experience. The author shares their experiences in learning and working, and proposes requirements in two aspects: understanding the external and internal aspects.

• Through studying business courses and closely collaborating with business teams, the author successfully integrated into a business team in their first job and played an important role in the team's expansion.

• In order to better understand the business, the author personally experienced the work of the business department in their second job, which helped them better manage the business population.

• The author proposes requirements in two aspects: understanding the company's market, competitors, customers, and other external environments, as well as understanding the company's core business, strategy, and organizational structure.


Being business-savvy is a topic that has been written about in countless articles. Today, I would like to discuss the understanding of "business-savvy HR" from a different perspective based on my own experience.

Let me share three experiences from my past.

Experience 1

I studied human resources for my master's degree abroad, and on the first day of school, I took a course called "Human Resources and Corporate Strategy."

To my surprise, the professor of this course basically introduced the topic and then stepped aside. The guest speaker for that day was a vice president of HR from a large investment bank. The vice president's speech that day mainly revolved around the company's market and business strategy, with only a few mentions of HR content.

After the class, I felt a bit confused. I went to the class with the mindset of learning HR knowledge, but all I heard throughout the class was about the business. I was surprised at how well the HR vice president understood the business.

I remember joking with my classmates after class that the class was too abstract and didn't provide any practical HR knowledge. Looking back, I realized that the intention of the school was to instill a business-centered mindset in HR students from the very beginning.

Experience 2

After graduating with my master's degree, my first job was as an HR specialist in a multinational high-tech company, where my role was similar to an HR business partner (HRBP). I and my boss, a senior HR manager, supported a business department of about 300 people. My daily work involved recruitment, training, compensation, and other HR administrative tasks for this team.

The biggest requirement my boss had for me at the time was to understand the business. To achieve this, she made the following arrangements:

First, I was seated with the business department, away from other HR teams in the company. Second, she required me to attend the business team's weekly meetings and have regular one-on-one meetings with several business leaders. Lastly, I was required to attend the business team's regular training sessions.

Because of these arrangements, I quickly integrated into the business team and played an important role in the team's expansion from 300 to around 500 people within a year. They were also very satisfied, and at the end of the year, several business leaders specifically expressed their gratitude to my boss for my work.

Experience 3

My second HR job was as a factory HR manager in a large manufacturing company. One of the business operations of the factory was to transport special gas products to customers using large tanker trucks. The drivers of these trucks were one of my key business clients, as their work involved not only driving but also providing simple technical support services at customer sites.

I couldn't understand how the drivers could be knowledgeable in both driving and technical services. To fully understand their work, I spent three days accompanying them on their routes during my first week on the job.

I would leave the factory early in the morning and travel long distances with the drivers to deliver products to different locations, returning to the factory very late at night. After these three days, I had a clear understanding of the drivers' daily work, which helped me in recruiting, performance management, training, and other HR tasks related to this group of drivers.

These early career experiences helped me establish the basic belief that to do HR work well, one must understand the business.


Today, more and more companies are emphasizing the need for HR to understand the business and truly center their work around business clients. They want HR to speak the same language as the business and become true participants in the organization's and business's development.

Some people have fallen into the misconception that HR's business knowledge and capabilities should be on par with those of their business colleagues. Some companies even select candidates for HRBP positions solely from the business departments.

So, what does it mean to be a business-savvy HR? I believe it mainly manifests in two aspects:

First, understanding the external.

This includes understanding the company's market, major competitors, customers, and upstream and downstream enterprises; industry market trends; the development prospects of technology and products; and the major potential threats that technology may face, among others.

The following list of questions can help HR professionals understand the company's external environment:

1. Market: What are the major market trends in the industry our company operates in? How do these trends affect our business and HR strategies?

2. Regulations: Are there any key changes in national and local laws and regulations in our industry? How do they impact our business and HR strategies?

3. Competition: Who are our major competitors? What are the differences between us and them? What are their HR strategies, and what can we learn from them?

4. Customers: Who are our target customers? How are their needs and expectations changing?

5. Technology: What are the technological and product development trends in our industry? What are the technologies that are constantly being upgraded? What technologies could potentially be replaced by new ones? How do these trends impact our recruitment and talent development?

6. Supply Chain: Who are our upstream and downstream enterprises? What challenges and opportunities are they currently facing?

Second, understanding the internal.

This includes understanding the company's own business situation, including the organizational structure and design of various departments, key business processes, and major products; the company's mission, vision, and 5-year business strategy; and the major business plans and key performance indicators for the year, among others.

Similarly, the following list of questions can help understand the company's internal situation:

1. Core: What is the core business of the company? How does it create value for the company? What is the company's main business model? How does the company make money?

2. Strategy: What are the company's 5-year long-term business strategy and 1-year short-term business goals? What are the expected key outcomes? What are the specific key performance indicators (KPIs) for monitoring results and process progress?

3. Organization: How is the company's organizational structure designed? Can you explain the entire company's organization and department setup to a new employee?

4. Finance: What has been the company's profit and loss situation in the past 5 years? What are the revenue, operating costs, gross profit, and net profit? What financial challenges does the company face in the future?

5. Products: What are the main products and services we offer? What are their competitive advantages in the market? What are the self-operated and distribution sales channels for the products? What challenges do they each face?

6. Research and Development: What are the main focuses of the company's product development and innovation? Are there any recent important product or service innovations?

7. Processes: What are the key business processes of the company? Which departments, teams, and positions are involved?


So, how can we become business-savvy? Based on my personal experience, the following approaches have proven effective.

First, make friends with business colleagues.

Take the time to chat and have tea with business colleagues; attend regular meetings of the business department to understand the challenges they face; participate in training organized by the business department; and humbly seek advice from business colleagues when encountering any business-related questions you don't understand.

Of course, if conditions allow, you can also learn from business colleagues up close, just like I did back then, to gain firsthand information about their work details.

Second, understand finance.

The core goal of a company is to make money, and understanding finance is essentially understanding the company's operational logic. Where the financial numbers are, that's where the money is. As an HR professional, you should understand the company's specific revenue, costs, and profitability. How is the money earned and spent?

One method that can help HR professionals quickly understand finance is to participate in the company's budgeting process. This process can help you understand how the company sets its annual business goals, allocates expenses, and calculates costs and profits.

After deeply participating in the company's budgeting process for the past three years, I found that my understanding of both the company's finance and the essence of business operations has improved significantly.

Enhancing understanding of finance can also improve HR's data analysis capabilities, achieve data-driven decision-making, and facilitate effective communication with business partners.

Third, make good use of external resources.

Consciously learning relevant business knowledge is essential to understanding the business. In this age of information explosion, there are many effective external learning resources available.

Regularly read influential public accounts, journals, and reports in the industry; learn about the views, speeches, and influential industry forums and seminars of key opinion leaders; and supplement your understanding of the business with these resources.

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