How Hr Contributes Towards Making Their Human Resources Into a Competitive Advantage

Topics: Human resource management, Management, Strategic management Pages: 7 (2503 words) Published: March 29, 2010
The scope of this essay is to critically evaluate why it is important for companies to make their human resources into a competitive advantage and how HR contributes towards this process. It was always feared that machines will replace the need for people at work. But in reality, it’s just the opposite. People are more important in today’s organizations than ever before. As Edward L. Gubman author of The Talent Solution, (cited in Bohlander et al, 2007, p.4) points out, “in many fast-growing economies, it maybe easier to access money and technology, than good people.” Successful organizations are particularly good at bringing together different kinds of people to achieve a common purpose. People can make a difference when they dare to believe in creating advantage for themselves, their communities and their future (Creating People Advantage, 2008, p.1).

The Importance of Talented People for an Organization
People are the most important success factor for companies going forward and people should be seen as an investment for the short and long term. As Dr. Hans-Paul Buerkner, CEO of Boston Consulting Group (BCG) (The Talent Advantage, 2008) says that, how well a country or a company performs, depends on its people. Even when some countries have good natural resources, they need people to translate it into wealth. And for countries like Singapore, which has no natural resources, they are still doing well because of a good educational system. Every company is in the people business, whether it be consulting, banking or manufacturing. If the company has good people, who are engaged, motivated, highly skilled and innovative then they can be successful, and if the company neglects or doesn’t have them, they’ll automatically fail. Companies such as Seylan Bank of the Ceylinco Corporations had failed in the recent past due to poor leadership, poor quality and poor competitiveness. Now they are using HRM to restructure their bank and they have come up with a 3 year strategic plan to gain competitive advantage and it intends to consolidate its position in the market (“Seylan Bank,” 2009) Therefore, in difficult times, where people are generally focused on short-term gains, innovation and training in HR may suffer. So this is the time when HR managers can stand up to say, “look we can be more resourceful. We do have talent that’s been untapped. We can apply skills and capabilities in different ways than we’ve considered before.” (HR Management, 2009). Therefore, companies which have the right talent will gain competitive advantage.

The Importance of Human Resources to be a Competitive Advantage for Companies. Companies in today’s world are facing global competition. And every organization has its own competitive advantage which out does the other. While people have always been an integral part of the organization, they have taken an even more central role in building a firm’s competitive advantage. McDonalds for example, has developed core competencies in management efficiency and training. Federal Express has core competencies in package routing, delivery, and employee relations (Gaining competitive advantage, p. 244). Companies should find talented people because companies are always faced with the pressure to compete and they have to think about the future of their company. A company’s future will only exist if they use their HRM functions to make their human resources more competitive (Creating People Advantage, 2008, p.7): •Restructuring the organization-

When organizations restructure, HR managers should smoothly and effectively manage this process, such as having good relationships with employees and seeing to their needs so that it’ll create agility and long-term affiliation.

Delivering on recruiting and staffing-
When older methods of recruiting and staffing such as advertisements in newspapers and web pages looses effectiveness, HR managers should start marketing and branding their companies...

References: Bohlander, Snell, Sherman. (Eds.). (2007). Managing Human Resources. USA: South-Western College Publishing.
Boston Consulting Group, (May 2008). Creating People Advantage. Retrieved from
Chan Chao Peh, (2008, July 1)
Gayle Lantz (2009, August 5). Heart of the Matter. HR Management, Issue 9. Retrieved from
Human Resource Management
Hyland, M.M. and Verreault, D.A. (2003), “Developing a strategic internal audit-human resource management relationship: A model and survey”, Managerial Auditing Journal, Vol.18 No. 6/7, p. 465-77.
Singh, K. (2003), “Strategic HR orientation and firm performance in India”, The International Journal of Human Resource Management, Jun, Vol.14 No.4, p.530-43.
Stone, R. (Ed.). (2005). Human Resource Management. Milton, Qld: John Wiley & Sons Australia, Ltd.
Zhang, M. (2003), “Transferring human resources management across national boundaries: The case of Chinese multinational companies in the UK”, Employee Relations, Vol.25 No. 6, p. 614-26.
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