Magazine article Workforce Management

Think Competitively

Magazine article Workforce Management

Think Competitively

Article excerpt

Building and proving a competitive advantage is now a requirement for every function, including HR.

HAVING THE COMPETITIVE ADVANTAGE IS HOW essential to the survival of any business function, especially human resources. In the past, it was possible for HR to focus 100 percent on internal issues, never demonstrating superior performance when compared with talent competitors.

This internal perspective is no longer acceptable. The business world has changed dramatically, and global competition for talent has been ratcheted up several levels. Now more than ever before, the HR function and its activities affect the success or failure of the business.

This increase in competitiveness has eliminated the tolerance senior leaders once had for any product, service or function that didn't directly increase the firm's competitive position in the marketplace. Building and proving a competitive advantage is now a requirement for every function, including HR. Human resource leaders must comply or face elimination through outsourcing or loss of their scope and authority to other functional leaders, such as those in operations and information technology.

Unfortunately, HR has a long history of operating as if it were not in a competitive environment. All too often, HR people favor cooperation and consensus to direct competition. Contributing to this lack of competitiveness have been the facts that most people in HR have no P&L experience and that there are no universally accepted HR benchmark metrics to facilitate external comparison. HR professionals are about as keen to compete with other businesses as are the characters on Sesame Street.

As proof, I offer the minuscule percentage of HR departments that conduct periodic competitive analyses that assess and report to senior management the performance and standing of HR on a deliverable-by-deliverable basis compared with major product and talent competitors.

If you agree that HR must demonstrate a competitive advantage, here's what you can do:

First, conduct a function-by-function competitive analysis between your firm's HR program offerings and those of your closest competitors, using benchmark research and interviews with individuals who have worked at those firms.

Next, require that any presentation of HR performance metrics be accompanied by approximated data from select product and talent competitors. …

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