The Strategic Role of Human Resource Management

Date:   Tuesday , August 01, 2006

Many firms approach Human Resource from a cost prospective instead of focusing on how to execute the firm’s strategy through effective utilization of their resources. The trend is typically reflected in cost per hire, number of resource requisition raised and creating a metrics for number of resumes sent to fill the requirement. In effect HR in IT is all about resource fulfillment and cost.

Human resources in our business must focus on aligning itself with the business, think about key business challenges and design an HR plan to respond to the challenges. HR metrics is about measuring and managing the linkages between the initiatives and key challenges that are strategic to the business.

Hence alignment with the business is very crucial to define the key attributes in order to enable the implementation of a competitive HR strategy. In experience those are:
1 Building and developing a competency model.
2 Very competitive and committed people.
3 Robust training model that helps get ahead of competition.

People: Strategic Assets
People become strategic asset when we create proprietary knowledge, tools and training capabilities which are difficult to replicate or trade and help in creating the desired competitive advantage. Organizations also talk about 360 degree appraisals’ defining vision/mission, best practices that are good but it is always easy for competition to copy first. Only strategic asset creation discussed above keep the corporation’s competitive edge for some time to come.
Therefore HR Managers must understand their company’s strategy and its plan to build and sustain competitive advantage in the market place, apply the balanced score card model of Kaplan & Norton to grasp the implications of their company’s HR strategy.

In reality the HR Managers in the IT industry must stop thinking of transactional issues like vacations, handling routine queries on relocation, compliance, time sheets, spending quality time on one’s compensation, discussions based on billing, and bench issues. Instead they need to start thinking of efficient assessment systems to create employee value resulting in profitability and enhancing shareholder value.

HR as a Strategic Partner
In the book “The HR Score Card” the authors Brian Becker, Mark Huselid and David Ulrich talk about how HR can play a strategic partner’s role by:
1 Hiring the best and developing excellent employees
2 Using compensation as a differentiator
3 Senior Executives in a company viewing HR as a system, embedded within a larger system of the firm’s strategy implementation.
Bottom line HR professionals in the IT Industry need to adapt to the above and take an approach that will have a major impact on their firms’ strategy implementation. To quote Dave Ulrich “Understand exactly how people create value and how to measure the value creation process.”

At L&T Infotech we are engaged with Fortune Hundred clients wherein our HR gets involved in an evaluation process at regular intervals with the client to meet mutual expectations. To discuss a few of those:
1 Staffing
a How has L&T Infotech
b aligned with the client’s IT and business practices?
c Process adopted for quick on boarding of its associates on the project, were the SLA’s met?
2 Lessons Learnt
a At the start of the engagement
b Current situation analysis
Skills deployed
c Demonstration of thought leadership
3 Learning and development efforts to acclimate and keep in tune with technology and domain knowledge.
4 How has the competition fared at the client location?
5 Any new HR initiative undertaken by L&T Infotech.
6 How does L&T Infotech integrate onsite hires with their offshore associates?
7 Areas of improvement.
8 Time Lines for implementing the feedback given at the time of review.

In effect the above is a clear-cut example of how we manage our intangible assets, along with managing client expectations. Therefore HR functions require a totally different set of skills than managing people in a traditional factory environment.

To conclude HR in our industry has the potential to create value and add to the bottom line rather than controlling costs. To quote C. K. Prahlad and Gary Hamel “HR Professionals are now in a position to become numerator managers rather than denominator managers leading towards enabling competitive advantage, financial success and share holder value.”