What is commercial awareness?
Graduates with good commercial awareness are conscious of how economic and political trends can impact on their chosen industry and the employers they have applied to.
Commercial awareness is prized by graduate recruiters across all industries and in the private and public sectors alike. But what is commercial awareness? It is not so much a skill as a way of thinking and may be described on a graduate job advert in various ways, including:
- commercial acumen, commercial sense or commercial understanding
- having a commercial attitude
- having big picture focus
- being business-minded.
If the job advertisement refers to the importance of being ‘customer-oriented’ or having an ‘entrepreneurial spirit’ , it is another clue that graduate recruiters value commercial awareness in candidates.
What are some examples of commercial awareness and why is it important?
Generally speaking, employers will expect graduate candidates to demonstrate at least the following:
- An understanding of their business. That is, a knowledge of its activities or products, how it makes money, how it is managed, and how the role applied for contributes to the organisation.
- An understanding of the marketplace. In the private sector, this will include a knowledge of major competitors (and how the employer differentiates itself from them) and about any issues that might affect clients’ willingness to spend money with them. In the public sector, this will include an awareness of the pressures on public spending and how the sector is adapting to that. For both the public and the private sector, there should be a degree of awareness of how political and economic trends and events could affect the employer.
Recruiters are going to have much more confidence in a graduate who understands the basics of a business and how it fares in its marketplace than in a candidate without this basic commercial awareness.
A really impressive candidate might also:
- Have an understanding of how the major players in this particular market are performing at present . In some sectors, such as engineering, strong applicants will be aware of which companies have won important contracts.
- Be able to speculate intelligently about the future. You’ll need to keep up with general news and use this information to figure out how political events and economic trends anywhere in the world could affect developments and strategies within the organisation. For example, a change in consumer habits – not least shopping online – have affected the business strategies of retailers, consumer goods companies and the property companies that buy, sell and manage shopping centres.
- Have an understanding of the past which helps them to predict future trends. It’s particularly useful to be aware of any typical cyclical patterns, such as how wider economic conditions tend to affect a particular industry. On a smaller scale, it could be helpful to be aware of the cycle of the financial year and the effect it can have. For example, clients such as local councils might attempt to spend any remaining budget for road-building or maintenance before the end of the financial year, making this a busy time for civil engineers and construction contractors who specialise in this kind of work.
- Be aware of how their role may affect business performance. A smart candidate understands how their actions as a graduate employee may affect the business’ bottom line (even in a small way). For example, you might need to balance the importance of giving great service to all clients and customers with the need to allocate your time to the most profitable or highest priority projects. Similarly, if you are a trainee manager in the private sector you will need to consider how best to deploy your team to minimise costs and maximise profits.
However, because each sector defines commercial awareness in different ways, check out our sector-specific careers advice for more tailored advice on how to develop it for your chosen sector.
How to improve your commercial awareness
In a nutshell, if you want to build your commercial awareness, you need to do your research.
You need to conduct thorough research on the employer immediately before you apply – but you can start to develop your general knowledge of the industries you wish to enter and your awareness of political and economic events well in advance of applying. Candidates who make a concerted effort to gain commercial awareness for the year or so before applying for jobs should be in a strong position.
Follow industry news – try setting up email alerts on specific search terms, follow relevant Twitter feeds and read industry news online. If industry news sites are behind paywalls, check if your university department has a subscription to them or if they offer deals for student subscribers. Along similar lines, your university library or careers service should have a print or online subscription to a range of business magazines, including The Economist and the Financial Times . These are excellent for giving you an overview of the world’s political and economic state.
Bear in mind, too, that any practical workplace experience gained via an internship or a part-time job will help you acquire commercial understanding – particularly if you observe commercial or resource decisions being made.
How do graduates demonstrate the commercial awareness during the recruitment process?
You should demonstrate your commercial awareness through showing that you have completed a good amount of research on the employer on the sector (particularly at interview, when answering questions or when asking your own questions) and by whether you factor in commercial considerations when approaching scenario-based interview questions or exercises.
Demonstrating commercial awareness during your application
You could be asked a question on an online application form specifically about commercial awareness. For example, one property employer traditionally asks applicants ‘What do you think are the main challenges facing our business over the next 12 months?’.
However, it is more likely that you will be able to demonstrate your commercial awareness when answering an application form question on your reasons for applying or when writing about them on your covering letter. Connect your research about the organisation – for example, its flagship projects, business strategy, corporate values or recent company news – to your personal ambitions: show that your employer research has intensified your desire to work for the company and/or in the role.
Demonstrating your commercial awareness in online ability tests
If you are asked to undertake a situational judgement test (SJT) or an online video ‘immersive experience’ as part of the initial stages of your application, you will be presented with a workplace scenario, such as how you would deal with an unhappy customer. When answering these questions, let commercial considerations (for example, the business’ priorities) at least partly guide your response. For example, an unhappy client is unlikely to repeat their business so you would need to do your best to resolve the situation as effectively as possible.
Demonstrating your commercial awareness when answering interview questions
You will be able to show off your commercial awareness when answering interview questions about why you are applying and what you think the role involves. You can do this in exactly the same way as in your application.
Your commercial awareness might be tested by being asked questions about the company. For example:
- Who is our CEO?
- What is today’s share price?
- What do you know about our company?
- What are some of the biggest challenges facing us over the next few years?
- If you were our CEO, what would your main priority be over the next 12 months?
- How do our products compare to our competitors’?
Depending on the job, you may be asked a series of hypothetical or role-specific questions that call on your commercial awareness, such as:
- If I gave you £10,000 to invest in a project/new product in the next three months, what would it be and why?
- What would you do if a client complained about the service received?
- What would you do if you were managing a project and there was a delay?
Or a recruiter might gauge your commercial awareness by finding out about your interest in current affairs. For example, your interviewer could first ask you ‘What industry-specific or business news publications or websites do you read?’, go on to ask you ‘Tell me about a business story you’ve read recently that interests you and why’ and then, if appropriate, follow up with: ‘How do you think that news could potentially affect our business or that of our clients?’.