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There is a growing recognition today that the importance of human resource is crucial to corporate success. Human, not financial or capital must be the starting point and ongoing foundation of a successful strategy. Companies today have marked human resource as one of their important changing assets that has been proven to be the vital for the company to grow. Top organisations today are talking about "people before strategy", underscoring Peter Ducker's long-held contention that "people are a resource, not a cost" .
It has moved beyond merely an administrative to a strategic role in comparison to yesteryears, it was merely an administrative and supporting function of the organisation. Hierarchy has been replaced by networks, bureaucratic system has transformed into flexible processes and control based management roles have evolved into relationships featuring empowerment and coaching. Due to these transitions, it becomes the solid ground for the human resource function to finally evolve as a necessary lead to companies.
History has shown companies such as Seylan Bank of the Ceylinco Corporations had failed in the recent past due to poor leadership, poor quality and poor competitiveness. 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. As human factor are the most important success factor for companies going forward, therefore, companies which have the right talent will gain competitive advantage.
The main reason on why companies today must emphasize human resource as their competitive advantage is due to the recognition that scarce resources are the skills and expertise. This fresh perspective on the value of employees to an organization has widened the focus of HRM. Unlike capital, knowledgeable people cannot be accumulated at the top of the company. Knowledge and expertise resides in the heads of the employees at all levels and is embedded in the relationship of work groups, the kind of groups that is the closest to the customers, competitors as well as technology. Human resource therefore, must become the key players in the design, development and the delivery of the company's strategy.
Human Resource plays a significant, strategic role in supporting organizations. It serves as the keystone of any severe change management planning. To be competitive, they must also be the triggering factor to transform the culture of organisations, in order for the organizations to be less hierarchal, practice oriented, intact formal groups, and inwardly focused and more flat, outcome oriented, integrated and externally focused. It is the task of human resource to make sure that the culture, approach and structure of the organisation and the excellence, dedication and motivation of its employees add entirely to the attainment of business objectives. The importance of human resource in organization
clearly defined when the corporate strategies and HR strategies must be developed simultaneously. As human resources are valuable and nearly impossible to imitate, companies will gain advantage by emphasising on developing HR skills and capitalising on the competencies.
As strategies has increasingly depend on strengthening organizational competitiveness committed employees, automatically has put human resource in a central role. Human Resource can contribute by providing the most important competitive key by creating what we call "people advantage" - the ability to create competitive advantage through people strategies. That means now the role of HR is not just to implement the things out but also to plan out in such a manner that the employees can be strategically used to get edge over the competitors. This includes formulating and executing human resource policies and practices that produce the employee competencies and behaviours the company needs to achieve its strategic aims. In other words, it is an alignment of HR planning, selection, performance evaluation, compensation, development and staffing practices with the business strategies of the organization.
Care in selecting the right people to the organization also contributes. To get the right person in the right place requires extensive analyses from job description to needs of the organization as well as the key individuals. In a world driven by innovation and rapid change, learning organization provides a clear competitive advantage. Companies can also invest in training and attracting talent. Talent may soon become scarcer and to tackle this problem companies should communicate this problem to the HR managers to identify new talent pools, so that HR managers can implement programs that will enable talent affiliation and development. HR managers should make sure that the right people are being trained in the right place. The challenge that will be facing will also includes to recruit employees with various backgrounds and to navigate the diverse cultures and geographical.
Besides talent scouting, human resource contributes to be a competitive advantage in organizations by promoting cross divisional and cross functional collaboration. This action will maximizes utilisation of human resource and thus, encourages teamwork and foster relationships in between employees. Skills may be sharpen by redefining and expanding spheres of authority and responsibility to encourage the leadership skills among the employees. This shall be done to measure the changes and see how well the employees are performing and are they in the right direction. With the workforce in developed economies ageing, companies faces the loss of capacity and knowledge as employees retire, and the loss of productivity. Therefore to overcome this problem, HR can contribute by shifting work schedules, adjust health-management programs so that an ageing workforce can maintain the highest levels of productivity.
Meeting the challenges of developing and retaining the best employees, anticipating change and enabling the organization to become a learning organization, will be challenges for human resource to contribute to be the competitive advantage. Top level human resource must now view the new task of HR not from old lenses, but starting to treat employees not like raw materials, but instead a unique asset whom are worthwhile investment. Human resource managers therefore, must see employees more like "talent investors" and to be treated like partners, and also to be rewarded the way other investors are.