HR as a Strategic Partner: Competencies and Business Alignment

Introduction to Strategic HR Management

In many organizations, Human Resources (HR) has come to be regarded as a source of competitive advantage. There is a growing appreciation that unique competencies are developed through highly skilled employees, distinctive organizational cultures, and effective management processes and systems. It is increasingly acknowledged that competitive advantage can be achieved through high-quality personnel who enable organizations to compete on the basis of market responsiveness, product and service quality, product differentiation, and technological innovation.

Strategic HR management can be defined as "connecting HR with the strategic targets and objectives so as to improve business performance and develop an organizational culture that promotes innovation and flexibility." Strategic HR means accepting the HR function as a strategic partner in both the formulation and execution of company strategies — carried out through HR functions such as recruiting, selecting, training, and rewarding employees. While strategic HR recognizes the partnership role of HR in the strategizing process, HR strategies refer to the specific courses of action an organization intends to pursue in order to achieve its objectives.

A comprehensive HR strategy plays an important part in the achievement of an organization's overall objectives, and clearly demonstrates that the HR function fully understands and supports the direction in which the organization is moving. A complete HR strategy will also support other specific strategic objectives pursued by the marketing, financial, operational, and technology divisions.

In its true meaning, an HR strategy should aim to capture "the people component" of what an organization expects to achieve in the medium to long term, ensuring that: (i) it has the right people in place; (ii) it has the correct mix of competencies; (iii) personnel exhibit the right attitudes and behaviors; and (iv) the workforce is developed appropriately. An HR strategy adds value to the organization when it (a) expresses more clearly the common themes underlying other plans and strategies that had not previously been identified, and (b) identifies fundamental concerns that any organization must address if its people are to remain motivated, committed, and effective. The HR strategy must demonstrate that careful planning of people issues will make it significantly easier for the organization to achieve its broader strategic and functional objectives.

Furthermore, HR practitioners must ensure that the HR strategy is unified with wider organizational objectives, and must guarantee that the rest of the organization accepts the strategy. To achieve this, practitioners should: (i) consult with all stakeholders regarding the nature of the strategy; (ii) cultivate partners and supporters through the consultation process; (iii) emphasize the benefits being realized from the strategy with concrete examples of how it has helped; (iv) confirm that genuine commitment to the strategy exists at every level of the organization; (v) where possible, establish measurable results that can be observed and evaluated, making it possible to demonstrate impact; and (vi) embed the strategy in the recruitment process, particularly for senior managers.