Careers and Employability Service

Commercial Awareness

 

 

Employers keep asking about “commercial awareness”: what do they mean and how can I show them that I have it?

  • Commercial awareness could be summed up as an interest in business and an understanding of the wider environment in which an organisation operates: its customers, competitors and suppliers.
  • It might also encompass understanding of the economics of the business and understanding the business benefits and commercial realities from both the organisation's and the customer's perspectives.
  • Generally it includes awareness of the need for efficiency, cost-effectiveness, customer care and a knowledge of the market place in which the company operates (current economic climate and major competitors, for example)

Why is it important?

  • It is a major criteria for selecting candidates (see the table below). A survey by the CBI and UUK in 2009 found that 35% of employers were dissatisfied with the business and customer awareness of graduates. 
    "The public sector is increasingly required to meet targets and therefore values commercial awareness in addition to a commitment to public services"

    Vitae


    One major consultancy felt that a detailed understanding of the company, the issues facing the industry in which they operate, professional qualifications offered and job roles within the company was even more important at interview than answers to competency-based questions
  • It shows your commitment to the job you are applying for.
  • It gives you more to discuss in an interview
  • It improves your knowledge of a particular industry or company and may allow you to spot career opportunities you hadn't previously considered.
  • It helps you with career choice.
  • There were 52 applications for each graduate job according to the High Fliers survey of leading graduate employers.

Is it only relevant to business careers?

 “Never say, ‘I want to be in publishing because I love books.

Of course that is important but you need to make it very clear that you understand publishing is a profit-orientated business like any other

.... Being clued up on the issues facing the industry—from the changing role of the author to digital rights and intellectual property—is impressive to an employer and work experience is often the best way to develop this commercial awareness". 

The Bookseller

It is relevant to every career!
  • Teachers must be aware of the current trends in education.
  • Journalists must know of the move to multiformat and web journalism.
  • Social workers must be aware of the latest government initiatives.
  • Students applying to publishing must be aware of the profit orientation of the industry.
  • Hospital Administrators need to know about the NHS Commercial Operating Model

See the quotes in the yellow boxes to the right.

Employers may look for evidence of CA in your answers to general questions:

  • Tell me about your vacation job last summer.
  • Tell me about a time when you worked in a team to solve a problem
  • What is your greatest achievement?
  • Why are you applying for this position?
  • Which living person do you most admire? 

Or you may be asked more specific questions to demonstrate your commercial awareness:

  • What do you know about our organisation?
  • Why do you wish to enter the .... industry?
  • What are our main products/services?
  • What are the problems facing our industry at this time?
  • What changes have there been in our industry recently?

    The “Top Ten” Skills shortages among graduates

    % of employers surveyed
    1 Commercial Awareness 67%
    2 Communication Skills 64%
    3 Leadership              33%
    4 Ability to work in a team 33%
    5 Problem solving 32%
    6 Conceptual ability 21%
    7 Subject Knowledge & competence 19%
    8 Foreign languages     19%
    9 Numeracy 19%
    10 Good general education 15%

    Source: Association of Graduate Recruiters “Skills for Graduates in the 21st Century”

  • Who are our competitors? What are the differences between them and us?
  • Who are our clients?
  • What do you think the job you would be doing entails?
  • Where do you see yourself in 5 years time?
  • What salary do you expect?
  • How do you keep up to date with what is going on in business?
  • What story in the business press has interested you most recently?
  • What is the current Bank of England base rate?
  • How many euros would you get today in exchange for £10?
  • What is the FTSE 100? Did the FTSE go up or down yesterday?
  • What was our share price this morning?

Questions about your work experience

  • What skills did you develop from your work experience? Any transferable skills?
  • What would you do differently if you worked there again?
  • What was your experience of working in a team?
  • What is the management structure of the company? How effective is this structure?
  • Can you describe any good leadership skills you witnessed?
  • What is their recruitment and retention like?
  • What would you do differently if you were in charge?
  • Have there been recent changes in the industry the company operates in?
  • What market share does the company they have?
  • Is it a Global Industry? If yes, what are the implications?
  • Have they been in the press?
  • What is the company's unique selling point?

For help answering these see our Answers to 150 common interview questions

Motivation-based interviews

Some organisations such as the Financial Services Authority (FSA) have changed their whole selection process to focus on motivation. The FSA reviewed their graduate selection process as applications had increased 300% due to the recession, costing more staff time and money.

Analysing candidate performance revealed that competency-based questions were no longer a reliable indicator of a candidate’s ability. Assessors were also surprised by the number of candidates who were unable to say 
  • why they had applied to the organisation
  • what the organisation did
  • what appealed to them about the job
  • how they could contribute.

 

Many candidates had failed to research the organisation sufficiently, only looking at the company website and making no attempt to talk to current employees and alumni at the organisation or to understand the core values and culture.

Commercial awareness is increasingly seen as crucial for the functioning of the NHS ...  the new NHS Commercial Operating Model is changing the rules of procurement – and opening doors for the medtech industry.

The Institute of Chartered Accountants say that the big thing their employers feedback to them is that students need to improve their commercial awareness. ICAEW recommends following relevant stories on the news that interest you e.g. in the recent cases of well-known retail companies going into administration, find out who the administrators were etc. They also stressed the value of part time jobs for gaining commercial awareness.

As motivation and business acumen were the root cause of these issues, they looked at methods to test this at earlier stages in selection.

The following changes were introduced:

 

  • Introduction of an online financial analysis test to assess applicants' ability to understand and interpret financially related information (business acumen)
  • Removal of competency based questions from the application form and replacement with motivation and business acumen questions: 
    • Why you have applied for a career at the FSA, why are these reasons important to youhow have you prepared for making this application?
      Why you have applied for this particular graduate programme. Why are the reasons you have stated important to you?
      The FSA has frequently been in the news over the past two years. Please outline the main issues the FSA are currently facing or will face in the future.
  • Candidates were then asked to pick two issues and to talk about these in depth:
    • What action should the FSA take to deal with this issue? Why? What might the implications be?’
  • Addition of motivation questions as part of the telephone interview and face to face interview.

    "To successfully secure corporate donations fundraisers need to know their audience and communicate with them in a way that appeals to their wants and needs.

    With this in mind, it’s vital that fundraisers have a commercial awareness of the pressures faced by and aims of any companies being targeted for support."

The recruitment team could screen out candidates who had not carefully considered the FSA as an employer or who did not have the capability to be successful.

Making the form harder also meant that candidates making lots of ill-considered applications (the scattergun approach) did not even complete the form: they had over six thousand unsubmitted applications.

This also resulted in:
  • 25% more applications rejected at application and online test stage saving £30K in telephone interview costs alone
  • 70% of those reaching final stage assessments received an offer, resulting in happier assessors and candidates.

 

Some other companies have reviewed their recruitment methods to take this into account. In these companies interviewers drill down to the core motivations of the candidate, leading to a higher percentage of offers of employment being accepted rather than applicants waiting for a better offer

Companies want to see that the applicant has gone the extra mile of meeting people on campus and has made a well informed decision on the companies they will apply to.

For more about motivational questions see our page on this

 

How to get commercial awareness:

  • It may seem obvious but check the employer's web site for background information - don't just look at the "careers" section but also at the sections for clients, potential clients.
  • Find out who the organisation's competitors are: you may well be asked this and which ones you have applied to! Also try to find out the size of the workforce, the turnover and profits of the company, its share price and key activities which interest you.
  • Read the business press - the business pages of the major broadsheet newspapers should cover most of the background that you need, but the FT and the Economist will be essential if you are applying for a research/analysis sort of post.
  • During your reading, look out for stories that will affect the organisation to which you are applying, or its clients, directly or indirectly. Current issues (2012) could include the crisis in the eurozone; the forthcoming US presidential election; banking reforms/bonuses and the business case for a new London airport or a third runway at Heathrow.
  • The professional press: Accountancy Age, The Lawyer, etc will keep you up-to-date with developments in the relevant sector. See our I want to work in ... pages to find out information sources for a range of career areas. Graduate publications such as Real World magazine, TARGET magazine and sector-specific titles such as Lawyer 2B can also help - many of these are available free from the Careers and Employability Service
  • Make a point of viewing/listening to business-related programmes on TV and radio such as Working Lunch, the Money Programme and World Business Review. Some, such as Dragons' Den and The Apprentice may be designed as entertainment but raise a number of business issues and can offer good material for discussion.
  • Do a SWOT analysis on a company or sector of interest to you. Analyse the market sector in which a specific company works – who are its competitors?
  • Relate your own experience to business. You may be doing casual bar or retail work purely to earn money but this can also be used to gain an insight into business. What are the good and bad points about your employer? Who is its target market? Who are its main competitors? How would you improve the company's image or profitability?
  • If all this sounds like a lot of work - these are competitive areas which need thorough preparation to have any chance of success - and your workload once you join any of these organisations will be even heavier!

Further information


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Last Updated: 11/09/2017