This transformation, as well as HR's strategic objective, is more vital than ever in the twenty-first century. Employees can now supply a firm with a non-replicable competitive advantage if the company knows how to exploit their talents and aptitude. Through strategic hiring, staff development, appropriate reward use, and aid in managing the continual changes and cycles that organizations go through, the HR function helps managers know how to use these resources. HR can assist the company in a variety of ways, including increasing staff productivity and preparing for change.
Strategic Nature of HR
Human resource management functions are increasingly being linked to the organization's strategy. The term "strategic" relates to how a company intends to compete. In other words, strategy refers to the process through which a company selects which products or services to advertise and sell, which industries to enter, and how it will achieve its objectives in the marketplace.
Employees will be informed about a variety of organizational challenges, such as:
- Short-term vs. long-term focus
- Quality vs. quantity
- High risk vs. low risk
- Flexibility vs. rigidity
- Independent vs. dependent conduct
- Conformity vs. autonomy
Through a strategy, employees understand these challenges. Although largely bound by the organization's technology and structure, these features have an impact on the specific skills, knowledge, and abilities that people require to do their tasks.
HR’s Role in Competitive Advantage
If a company competes by offering products and services that are very different from those offered by competitors, it may be important for HR to:
- Place a premium on hiring and selecting employees who are creative and innovative
- Build a larger research and development department than companies that compete by keeping costs low
- Implement a longer selection process to carefully choose creative individuals, which may affect the time to fill a position
- Establish a larger pipeline of leads to maintain a reasonable time to hire
Changing Perception of HR
Although HRM is critical to the organization's strategic objective, management has not always viewed HR in this light. This was partly owing to HR's traditionally limited position.
“"To many individuals, including chief executives, the people who worked in 'personnel' appeared to be a bunch of drones whose apparent missions in life were to create paperwork, recruit secretaries who couldn't type, and send around memos whose impertinence was exceeded only by their irrelevance," one director wrote in the 1970s, during this perception shift of HRM (H.E. Meyer, "Personnel Directors are Becoming the New Corporate Heroes," Fortune 113: 2).”
Today, HR departments are critical to organizations for the reasons stated above. According to research, an increasing number of companies are understanding the impact that HRM may have on the organization's bottom-line strategic goals. As a result, most companies' HR departments have become important corporate divisions, and the executives in charge of these departments are just as concerned with earnings as any other CEO.
Trends Influencing the World of Work
Six significant themes have been highlighted as major events that have influenced the expansion and importance of HRM in society and the workplace:
- Boosted competition
- The costs and benefits of utilising human resources
- Changes in productivity - Resulting from changes in technology, capital investment, the 2008-2014 recession, capital utilization, outsourcing, and government policies
- The speed and complexity of social, cultural, legal, demographic, and educational changes are all growing
- The signs and symptoms of workplace dysfunction
- The twenty-first century's societal tendencies
