Why is it important for a company to make its human resources into a competitive advantage

A workforce united toward being better than the competition keeps a company moving forward as a successful business in the market. The hiring process and general operation methods of the human resources department often play a large role in creating a team of employees that help the company stay competitive. Evaluating the practices of the HR department in a company helps determine ways to improve or change how competitive the business is in its industry.

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Flexibility
How HR Can Be Used as a Competitive Advantage

Hiring

The HR department handles recruiting, interviewing and hiring new employees in most companies, with the department supervisor or manager also having input in the hiring decisions. The department influences the competitiveness of the company within the industry based on the type of new employees it hires. Employees with job-specific skills and proven experience offer the background needed to keep the company competitive in the market. People with drive and a naturally competitive nature also help drive the company toward success.

Flexibility

The human resources department develops and manages the procedures within a company, particularly those related to staffing, benefits and hours. A company that offers competitive benefits and flexibility to its employees is more likely to attract and retain the most qualified people, keeping the company competitive. Flexibility through adjustable hours, flexible use of time off, and the option of telecommuting allows employees to make their positions better suited for them. They are better able to balance work and life, giving them more job satisfaction so the company is able to retain the best employees.

Training

Training is another major responsibility of the human resources department. A solid training program ensures all employees are knowledgeable on the company's operational practices and projects. Employees are able to work more efficiently and effectively to keep the company at the front of the market when they have quality training. Refresher courses and regular training time with all employees enables the HR department to keep employees current on new industry standards so the company as a whole stays competitive.

Culture

A company's culture affects how employees feel about the workplace and how hard they work. A positive company culture that encourages hard work and innovation keeps the business as a competitive contender in the industry. The human resources department is a factor in the company culture through the policies it sets and its treatment of the employees. A human resources department that consistently implements fair procedures while encouraging employees to take risks is more likely to create a loyal staff that works to push the company forward.

Relying on your human resource department to recruit the best employees, design appropriate and effective training programs and institute successful retention programs can give your company a competitive advantage. While competitors struggle with maintaining an experienced and motivated workforce, your company can focus more on productivity and increased sales when your HR department plays an integral role in your workforce development.

Human resources can ultimately help locate, hire, train and maintain a finely tuned and productive workforce, thus providing a competitive advantage for your business.

Human resource professionals vary in the kinds of skills and experience they bring to a job. Many are administrators proficient at processing payroll and executing benefits programs, but have little more leadership status than your clerical workers. You can upgrade your HR department to include recruitment specialists who also understand your company’s strategic roles and can play an integral part in shaping your business success.

Executive-level human resource professionals can help design job descriptions and training programs, advise you on where to find the best candidates, and participate in defining salary levels that will result in the best new hires.

The human resource department often is given job descriptions and told to fill the positions. Salaries are predetermined and the HR staff has little or no input into the hiring process. To tap into the HR professional’s insights, you should bring your human resource manager into the hiring process more completely. Allow HR to play a role in determining appropriate recruitment pay and tactics, let you know how much it takes to recruit top talent, and how company policies can be amended to recruit the best, both now and in the long term.

With an HR department that participates in defining and implementing company goals, you can rely on your human resources team to consider the company’s profitability with each decision they make. In addition to defining employee jobs and required qualifications, an actively participatory HR department can monitor employee activity levels, morale and customer service success to design and implement appropriate training programs with line supervisors and executive management teams.

The human resource department can build programs to track those employees who stand out. When your human resource professionals are involved in designing and providing employee reviews, they can help you spot talent and advise you on how you can best groom employees for promotions. They can provide designated employees with specific training and help you devise opportunities for growth, serving as your eyes and ears for seeking out the best candidates that will push your company into a competitive advantage.

HR jobs are often thankless roles in which the HR manager must balance the needs of the organization with the needs of the employees. This hard work often goes unappreciated by both sides!

That said, some employers are beginning to recognize that the HR team is not only an invaluable resource but it can also actually help to create a competitive advantage, allowing the company to outperform the competition.

HR teams have a lot of responsibilities that can directly impact how well a company can compete against others. Let’s take a look at some examples.

How HR Can Be Used as a Competitive Advantage

Here are some of the many ways the HR team can help create and maintain a competitive advantage for the organization:

HR can use data to analyze turnover rates and determine where problems may lie, thus allowing the company to more quickly find issues and get them resolved. For example, if the data show that most turnover is from new hires, the team can focus on what problems may be the cause of that. Or if the data show that one group has a higher turnover rate than the rest of the business, focus can be turned there.
HR can help managers source the right talent to get the skills the company needs to grow and be competitive. HR expertise can allow the organization to know where to look for specialized talent when needed. (If your organization doesn’t already assess which talent streams are best utilized for different types of candidates, you can start now!)
HR can provide insight into the going market rates for talent and what it might take to get high-quality hires on board. HR can review the competitive talent landscape and determine what compensation strategy will be best aligned with company goals.
HR can give insights into how other organizations within your industry are structured—there may be information that can be useful in determining which positions the company still needs to create or fill to become or remain competitive.
HR can use data to show how the skill sets of the employees are evolving over time, and to show business leaders where skills gaps may exist so those gaps can be addressed proactively.
HR can also design employee development pathways that take into account the strategic and long-term needs of the organization, ensuring that key employees get the right training before it must be utilized. This impacts retention and improves the skill sets for the organization as a whole, all while ensuring the organization is addressing big-picture competitive issues proactively.
HR can use data to find potential employee issues before they become problematic. By tracking employee engagement scores over time, for example, HR can discover when engagement levels are waning—hopefully before they have a significant impact on morale and turnover—so the organization can take action sooner rather than later.
HR can put together succession plans that take into account the organization’s strategic goals. This can allow the organization to remain competitive even when there is turnover in key roles. (This is a critical time when a less organized company may falter.)
HR can analyze which employees are high performers and alert the management about who should be fast-tracked for promotions and new projects.
HR guidance on legal issues can keep the organization out of costly legal problems. This not only saves the company money but it can also save the company from major setbacks.