Strategic HR roles to create competitive advantage for organisations
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How can HR practitioners demonstrate their value through business success? This question is constantly in CEOs' minds when they consider the significant financial investment in human capital and HR initiatives.
One of the key responsibilities of CEOs is to bring the organisation to a brighter future, and there are several strategies that can make this happen. CEOs need to overcome daunting challenges, such as facing financial woes, while maintaining and improving the bottom line.
CEOs also have to deal with the inevitable paradox of cost cutting while growing the business through innovation and expansion. Another hurdle is controlling expenses by capping or reducing staff benefits, freezing the payroll or tightening budgets, while increasing the level of employee engagement and innovation.
To get past these difficult times, employees are considered key elements driving the organisation’s success. Talented or high-potential employees become a primary competitive differentiator.
Retaining these employees requires the ability of the HR professional to make a case to ensure these employees are retained and plan initiatives to address this issue. Long-term development plans, promotion opportunities, career paths and competitive remuneration packages are some examples of important factors when employees consider leaving.
During times of economic pressure, a leader can make investors and customers confident and give employees a sense of hope, confidence and job security, which creates employee engagement.
Employee engagement will ultimately result in a more committed, motivated and productive workforce, which will have an overall positive impact on the organisation. Based on this point, CEOs expect HR to understand business solutions, and all HR practices must demonstrate value through the organisation, as employees are viewed as an asset that brings the organisation success.
The impacts of technological advancement and economic growth are considered as external factors challenging HR practitioners to rethink existing HR practices and transform their strategy to create competitive advantage.
To have a strategic partnership with his CEO, the chief human resources officer (CHRO) has to work closely with him and be able to understand the terminology of the business world.
In the past decade, the role of a HR practitioner changed from the work of administrating employee needs and setting policies and procedures, usually identified as “reactive” or “traditional” HR, to a more strategic role of supporting CEOs to build capabilities that increase the confidence of stakeholders.
The essential features of strategic HRM systems are linked to the firm’s business and strategic initiatives, which require HR practitioners to make a significant departure from reactive or traditional HR.
CEOs have increasingly higher expectations and demands when it comes to CHROs and HR practitioners. In the broadest terms, these changes require a dramatically different role for the HR function and CHROs. The transformational role of HR from reactive or traditional to strategic HR needs to be addressed in the organisation.
There are six major HR competencies that require HR practitioners to develop to respond to CEOs’ visions and initiatives – credible activist, culture and change steward, talent manager/organisational designer, strategy architect, operational executor and business ally.
Business awareness allows HR professionals to respond to external conditions and contributes to the success of the business by understanding the social context. CHROs should also have a fair understanding of other business functions such as finance, marketing and business development so that they can help the organisation to improve the bottom line.
Due to a highly competitive business world, human capital management is a key driver of an organisation’s success, so, without fully competent and engaged CHROs, the ability of CEOs is limited, as these are the ones who oversee the business.
The role of CHROs is more critical now compared to the last decade of people management. Many organisations are searching for specific strategic HR expertise to create a strategic business partner and create organisation success. CHROs must be ready to respond and be equipped with their competencies to demonstrate value through the business in these challenging times.
_ Wallapa Suengkamolpisut is Corporate HR director, Chiva-Som International Health Resorts.
