Wal-Mart Can Attain Competitive Edge

¶ … Wal-Mart can attain competitive edge through human capital in the long run. The paper has highlighted many recent practices by companies which have enabled them to gain an edge in the industry and have given them a sustainable advantage over their competitors. HR practices of Wal-Mart are also analyzed and discussed in detail in comparison to the industry trends.

The role of HR has expanded to great heights over the past two or three decades. There was a time when HR was not considered as an integral function of an organization but now times have changed. HR is considered as an extremely important function of the department because of the changes in the business environment. Many companies have started investing heavily in their HR departments even more investment than they do in their marketing functions. One of the key reasons for such a rapid rise in the role of HR has been globalization and the increase in competition. Wal-Mart is considered as one of the success stories of the recent times. Wal-Mart's HR has not been acknowledged widely for its contribution to the success of Wal-Mart however the HR structure is responsible for creating a unique business culture "The Wal-Mart Way," which has given Wal-Mart competitive edge over the years. (Schultz, 2010)

In the current era of competitiveness many companies have realized that human capital can give them a sustainable advantage over their competitors in the long run. Top performing companies such as Google and Pepsi have invested heavily in their human capital.

Many companies who have spend heavily on their human capital have been getting positive end results in the form of increase in sales/profits however the problem with HR investment is that it cannot be measured in terms of return on investment directly. Usually an HR performance review will be based on parameters that are linked to the retention and acquisition of the talent or the morale and satisfaction of the employees. In truth, HR investment can be reflected in the bottom-line of the company which cannot be measured objectively.

The HR Strategy needs to be aligned with the corporate strategy because they both have a similar goal in mind which is to achieve a competitive advantage. The HR strategy deals only with the human capital such as the right role, right people right time, right people and right compensation, while the corporate strategy acts in a broader sense, such as what product, which industry, what segments, and what value to deliver to the customers.

The top performing companies in the retail industry such as Wal-Mart or Target are renowned for their HR strategies. These companies employ the best practices for retention and acquisition of the talent. Target for instance, has secured a unique positioning in the market through their HR practices which are employed for hiring and recruitment in the first place and then by developing the acquired talent through training and development of the employees which also helps the company in retaining the talented workforce. (Anderson est. al., 2008)

It is extremely important for the companies to find the talent that suits their company. The talent alone cannot prove to be fruitful in the long run therefore they have to nurture the talent through training programs. Many companies fail in the retention stage of the employees because they lose the nurtured talent to their competitors which make them lose their competitive edge.

Costco is the best example of how they retain the acquired talent; they hire new recruits from a very early stage and then retain them for a long period. The hiring is based on campus recruitment drives which are carried out in the top universities of the world. An individual is hired at a very stage of his career usually as an intern then the same individual is trained and developed for future challenges. So from an intern an individual moves up the organization ladder to a management trainee, assistant manager, manager, senior manager and then retires in the top hierarchy.

Wal-Mart has been employing a unique HR strategy for acquiring and retaining talent. The hiring process is based on a mix of different practices including on campus recruitment, online recruitment and newspaper advertisements. Once they have hired the talent that fits the organizational culture and job demands then they go through a seven day training program which is called "The Wall mart Way." This program helps the employees in adjusting to the organizational culture. This program helps the development of the employees which leads to the culture that Sam Walton wants at Wal-Mart attaining them the competitive advantage. (Charles, 2006)

The HR practices of Wal-Mart are aligned with the trends of the HR practices of the top companies of the world who have responded to the dynamic changes in the field of Human Resource Management. One of the upcoming trends in HR is to respect employees and appreciate their worth through incentives other than wage bonuses. Wal-Mart treats its employees as partners. Employees are allowed a lot of autonomy and decision making power which enables them to flourish and reach their full potential. The compensation system is also performance-based which is the best compensation practice in the current economic situation of America.

The future of the industry will be heavily influenced by the global economic environment. Wal-Mart is planning a number of foreign expansions which will need a complete change in the current HR Structure. Companies such as Google have responded to the integration of Information Technology in its HR infrastructure. Wal-Mart also require a lot of changes in the HR structure because they need more staff that have the relevant knowledge of the Internet and possess great amount of computer skills.

An integral part of the future HR Strategy of Wal-Mart needs to improve on the current training programs of the organization. The seven day orientation program at Wal-Mart only caters to the cultural intelligence of the employees. The technical and non-technical skills are developed by the help of the managers who serve as servants as well as leaders to coach the employees. The managers of the organization are held responsible for developing a work culture which is backed by the professional competencies that are required for the development of the organization.

The managers will need to be a given broader role in the future to train the employees because on-the-job training is the only HR technique that has been used by the company to develop the talent. Many of their competitors have been using extensive training programs which have proved to be highly successful for them but the most dangerous sign for Wal-Mart is that this strategy of their competitors is going to result in even more problems for them because the competitors will be available to attain a competitive advantage over Wal-Mart. Therefore Wal-Mart needs to adjust their training programs by catering to a broader skill set development.