Inasmuch as developing a strong, successful business strategy is crucially important in order for organizations to attain competitive edge, its effective, consistent implementation does represent a crucial factor for its actual, successful pursuance. Even appropriate strategy development not followed by consistent execution would soon show to be empty and unwieldy. In order to achieve competitive advantage, nevertheless, employers should duly take into consideration several factors and deploy a different combination of resources, but human capital unquestionably represents the ultimate driving force behind organizations achievement of competitive edge.
HR in its double capacity as people function and strategic partner is definitively well placed to support employers in the Sustained Competitive Edge Paradigm appropriate development and successful implementation (the Paradigm is outlined in a specific article – Sustained Competitive Edge Paradigm). To stress the role played by HR in its effective execution, each component of the Paradigm is now analysed separately, but in connection with the others, identifying the synergic effects which the different components may produce the one in combination with the others.
Business Strategy Development and Execution
Business strategy, intended as corporate-level strategy, basically aims at defining a business direction and scope. Strategy should therefore define and identify an organization geographical scope, range of products and services, approach adopted to expand and gain new business, and the criteria to allocate resources between the different organizational components (Johnson et al, 2017).
As contended by Montgomery (2000), strategy is essentially concerned with managing people, resources and relationships, and making decisions. The way an organization makes a difference and the identification of the beneficiaries of that difference essentially explain the purpose of an organization.
Human capital does definitely represent a crucial factor not only in strategy development but indeed also in strategy execution. Business should therefore focus their efforts on making a difference for their consumer target group as well as for their employees.
The Role Played by HR
Being in charge of looking after employees, managing the entire employee lifecycle and ensuring employees the best possible experience, HR can and should play a particularly significant role in business strategy development and execution.
Table A – HR and
Business Strategy
The benefits of the activities performed by HR are so pervasive and overarching which it can be hardly argued that every single action is actually aimed at pursuing a single objective. Programmes developed and implemented by HR typically covers different areas and bundling with others initiatives more often than not yield even more overarching results, thanks to the synergy each of them produces in combination with the others.
In its role as an effective business partner HR is not in charge of coming up with new business strategy ideas; notwithstanding, its contribution to it may be manifold.
In the business strategy development phase, HR can certainly support the business in the identification, for instance, of new business geographical areas conducting wide labour market intelligence investigations in order to assess the local availability of the specific skills and expertise required by the company and identify the opportunities and threats offered in terms of employment law, reward practices, fiscal law, cost of living, lifestyle, culture and other similar aspects. Some of these pieces of information will prove to be particularly significant when a company, as usually happens, may plan to second employees from a country to another.
HR clearly plays a significant role in the management of the employee lifecycle. The ultimate aim is not only to ensure employees a great experience, but also to secure organizations onboarding and developing individuals having the skills and competencies necessary for them to successfully compete in the relevant markets.
Whilst recruiting and employee development are of paramount importance for enabling business to have the internal skills and expertise they need to develop and constantly review their strategies, leadership, talent management and, once again, employee development can be definitely regarded as crucial factors for strategy implementation. Once developed on paper, even strong, potentially effective strategies may lead business nowhere if not properly executed; management effectiveness, therefore, definitely represents a key factor to this particular end.
Corporate Culture and Organizational Climate
Whereas developing a company culture is mainly an employer task, its consistent implementation concerns all the employees. Executives, managers and line managers in particular should ensure that corporate culture is not a nice to have statement written on paper, but the expression of values, approach to work and way of interacting genuinely accepted and embraced by employees. Organizational culture may actually make or break business strategy and that is the reason why employers are increasingly devoting to it constant, close attention.
Corporate culture is one of the most significant factors jobseekers take into consideration when making their decisions on the company they want to join. Paying lip service to corporate culture and neglecting to consistently showcase it, may seriously jeopardise employers’ ability to attract and retain the talented individuals they may need.
The Role Played by HR
Also in this case, HR may play an important role namely in corporate culture development and implementation phases.
Table B – HR and Corporate Culture
By conducting surveys, focus groups and town hall meetings, HR can assess employee actual perception of culture and identify any potential gap. Listening to employee voice may provide employers food for thought and help them identify potential room for manoeuvre and grounds to review their company culture.
Albeit defining and developing corporate culture is a typical founder responsibility, understanding and taking into consideration employees’ point of view may help employers understand their actual attitudes and values. If considered appropriate and consistent with company values, employers may decide to review and fine-tune their company culture accordingly, alto taking into consideration the changes occurring at an increasingly faster pace in the external environment.
Once HR gathers employee feedback on how they actually live on a daily basis organizational culture, it is extremely important to develop a plan of action in order to follow up on employee voice. Ensuring employee perception of corporate culture, that is, organizational climate properly reflects organizational culture should be regarded by employers and HR as a non-negotiable obligation and firm part of the actions taken to offer employees a valuable experience.
Employees regard any gap they perceive between company culture and organizational climate (that is, their perception about corporate culture) as a marked evidence of inconsistency. Managers talking the talk but not walking the walk cause employees to become disillusioned about corporate culture and feel ill at ease in the workplace. The concomitant existence of these circumstances, lack of ethics and disregards for organizational values drastically impact organizational climate and may be the reasons for employee absenteeism, distraction and inaccuracy, worse still, the causes for employee and team productivity to dramatically plummet.
Employer Branding and Candidate Experience
The unrelenting, pervasive presence and influence of social media nowadays remarkably impact organization reputation and public image. The implications are noticeable both in terms of employer branding and corporate branding, but the two aspects can indeed be considered as the two sides of the same coin in that it can be hardly contended that the one aspect does not actually affect the other.
Albeit employer branding aims at promoting organizations as the best place to work and at creating in potential applicants an organization’s corporate image of an employer of choice, employer branding reach is not limited to jobseekers and may actually significantly contribute to make or break general public, that is to say potential investors and customers, impression of an organization.
Offering applicants an excellent candidate experience is not only important to show them respect and appreciation for their desire to join the organization, but also because candidates may already be or become at a later stage company customers, investors or both. Yet applicants who have had a negative recruiting experience might spread the word using, in addition to the once powerful word of mouth, the today even more powerful social media and social networks communication channels.
The Role Played by HR
Recruiting is definitely the main pillar of employer branding, HR should ensure that every applicant genuinely has an excellent candidate experience and that recruiting is managed consistently with the organization employer brand image. It may be argued that in some ways recruitment represents the evidence of the consistent execution of an organization employer branding strategy.
Table C – HR and Employer Branding
Organizations are increasingly availing themselves of social media and social networks in order to execute their employer branding strategy. HR puts in place a series of initiatives and actions to showcase their organization corporate culture, positive climate, active participation in environmental and social initiatives, but also employee benefits, flexible work and diversity and inclusion practices as well as any activity and initiative which may enable the organization to attract talented individuals from the relevant labour market (in addition to retain employees).
Albeit as often as not organizations involve their employees as testimonials in their employer branding initiatives, in order to provide candidates a real taste of what daily life is within the organization, candidate reviews and testimonials may make a bigger impact not only on potential candidates, but on general public at large.
Unpleasant candidate experience and inconsistent, worse still, altered representation of a company culture and climate may have counterproductive effects negatively impacting the organization not only by deterring talented individuals from joining the organization, but also customers and potential customers from continuing to buy or starting to buy the company products and services.
Employer branding does therefore represents a powerful way of promoting a business, but it should be managed consistently with organization real reality, offering all candidates an excellent recruiting experience and follow up at every stage of the recruitment process, safe in the knowledge that today’s candidates might be tomorrow’s (or later today) customers or investors.
Corporate Branding and Corporate Image
It may be argued that corporate branding is to consumers and investors as employer branding is to jobseekers, interrelations between the two aspects are nevertheless rather evident and when appropriately manged, may indeed produce significant synergic effects.
Also in this case, employers should be aware of the circumstance that a more or less wide gap between the corporate branding they are striving to build and develop and the general public image of their company brand may exist.
Among the most powerful levers organizations can nowadays use to enhance their corporate branding, Corporate Social Responsibility (CSR) and Environment, Social and Governance (ESG) strategies can be definitely regarded as particularly significant and effective. Both strategies actually aim at showcasing and fostering, albeit in a different and complementary fashion, their commitment to sustainability.
Corporate Social Responsibility
CSR does represent a qualitative, self-regulating approach employers adopt in order to show their unconditioned commitment to sustainable practices. Its ultimate purpose is to positively impact and enhance the environment and society at large (Lutkevich, 2022).
Effective CSR strategies
development and implementation enable organizations to maintain a positive corporate
image and improve stakeholder morale (Lutkevich, 2022).
As maintained by Polley (2022), CSR strategies also make a positive impact on company reputation. By reason of the growing social media and social networks reach, consumers can easily voice their disappointment against organizations, if social and environmental issues are not of concern to businesses, potential loss of turnover and profit highly likely are.
Environment, Social and Governance
ESG strategies use environmental, social, and governance data, measurable objectives and audit findings to evaluate organizations’ sustainability commitment and actual results.
Rating agencies can develop measurable indexes and assign companies scores in the environment, social and governance areas enabling in particular potential investors to evaluate a company long-term sustainability capability (O'Neill, 2022). ESG therefore enhances investor capability to evaluate businesses sustainability.
Being based on metrics and data, ESG may enable organization to maintain corporate reputation and financial success in the future
CSR and ESG
Both CSR and ESG strategies and reports may be used by employers to inform the general public about the company values and objectives. CSR mostly providing qualitative data, whereas ESG providing metrics and therefore quantitative data.
Employers should simultaneously embrace CSR and ESG strategies, in particular:
Ø CSR should be used by employers to showcase and increase internal
awareness of the business sustainability efforts;
Ø ESG should be mainly (but not exclusively) used to provide metrics and measurable objectives externally to potential investors (O’Neill, 2022).
A recent study conducted by McKinsey and NielsenIQ (Bar Am et al, 2023) suggests that consumers do actually pay special attention to sustainability and “back it up with their wallet.” The study essentially confirms that consumers are not only increasingly paying attention to environmentally and socially responsible products, but are also actually purchasing them.
The Role Played by HR
HR can definitely support employers in developing and implementing CSR practices consistent with their ESG strategies and strongly support employers in developing and communicating externally their ESG strategy, laying great emphasis on the environmental and social aspects.
Table D – HR and Corporate Branding
First and foremost, HR should ensure that both CSR and ESG strategies, and therefore internal and external communications, are aligned with corporate culture, organizational climate and company values and beliefs. In particular, organizational culture should foster respect for the environment, the community at large and give employees a central role in being part of the solution.
Business policies should reflect employer sensitivity to environmental, social and governance areas and consequently show, for instance, serious consideration for an appropriate use of energy, waste treatment, carbon footprint and plastic elimination, as to what concern the environment. To show employers genuine commitment to social environment, HR should develop programmes aiming at offering employees opportunities for volunteering (using paid leave), participating in donations in favour of the community, backing associations and schools in providing support to children who have no access to digital tools, participating in charity projects, supporting fair trade business and associations by purchasing their products, and developing and implementing other similar significant programmes.
Genuine, consistent commitment to social matters should be also reflected in HR policies including, for instance, strong inclusion and diversity statements (also in order to foster innovation) and equal opportunity policies at all levels, career advancements and gender equal pay as well.
As part of the CSR initiatives, HR should establish and keep wide open a two-way communication channel with employees and ensure that they are well-aware of the actions taken by their employer. Fostering, for example, diversity and inclusion practices may make feel employees proud to work for the company and then prove to be a good retention measure, but also an effective way of attracting talented individuals from the external labour market.
HR should communicate the organization CSR initiatives not only internally but also externally, for instance, embedding them into employer brand strategy and supporting CSR communications with relevant ESG metrics and data.
By supporting employers in communicating their ESG commitment, HR will contribute to prove that the business does actually have a specific, well defined vision. Investors are surely keen to know as much as they can about the company they invest their money in and eager to know how sustainable their strategy may actually prove to be. General public as well is becoming increasingly keen to buy products and services marketed by environmentally and socially responsible companies.
There are indeed both overlaps and differences between CSR and ESG strategies but they are both significant for employers and should be used in synergy the one with the other. One size does not fit all, HR and employers should hence focus on their real reality, specific circumstances and distinctiveness to develop their CSR and ESG strategies and avert just doing what competitors do, the same way they do it.
HR may play a particularly significant role in supporting business in gaining competitive edge:
Internally
ü Developing and
implementing strategies and policies consistent with the business CSR and ECG
strategies;
ü Supporting employers
in developing strong corporate cultures reflecting CSR, ESG and sustainability
strategies;
ü Properly and effectively communicating employers CSR and ESG strategies, providing them a clear line of sight between these and HR strategy and programmes.
Externally
ü Embedding corporate
culture, CSR strategy and ESG strategies in employer branding strategy and
programmes;
ü Offering applicants an excellent candidate experience and enabling them to perceive organization genuine consideration for governance, the environment and social and sustainability matters.
