Efficient human resource management can provide a competitive advantage for a company through hiring the right employees, developing human capital, and offering attractive benefits. A well-developed HR department is crucial for attracting and retaining skilled workers.
The relationship between human resources and competitive advantage is the fact that an efficiently implemented human resource management regime can be leveraged to the competitive advantage of a company. Competitive advantage refers to the various strategies that a business can implement that will give it a competitive edge over competitors within that industry or other related industries. Human resources can be used in various ways to achieve this desirable competitive advantage. Hiring the right employees to achieve company goals, governing employees within a company, and providing employees with attractive benefits are all examples of how human resources and competitive advantage are connected.
The HR department is responsible for identifying manpower requirements in businesses and engaging relevant employees to fill those vacancies. While creating the companies the goals and objectives are visualized and in order to achieve these goals, the company needs to hire the right mix of employees who can help the company in its quest. Successfully hiring employees with desirable human capital is one of the links between HR and competitive advantage. A well-staffed business will be able to draw on the wealth of knowledge and experience stored in the human elements of the business to improve performance and gain a competitive advantage over businesses with less skilled workers.
Another way in which human resources and competitive advantage are connected is the fact that the human resources department can channel the company’s resources towards the care and development of the company’s human capital base in line with the specific requirements of the company. This practice includes features such as trainings, courses, seminars, personal development programs and conferences, which will be sponsored by the company. The goal of this type of human capital development is to instill the company’s vision in employees with the hope that they can channel the company’s outlined strategies for competitive advantage.
Most highly successful companies have a well-developed HR department with an established strategy for attracting and, more importantly, retaining employees. Companies that do not have a good employment practice will find themselves losing their most valued and skilled workers to competitors who offer better job packages. This connection between human resources and competitive advantage includes factors such as attractive wages and other financial compensation, the reasonable guarantee of job security, and the promise of further employee development through company-sponsored training and personal development programs. Good welfare packages, health insurance, and an inclusive organizational corporate culture also help a firm consolidate its human capital base, which can be applied for competitive advantage.
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