Abstract
The drive for conducting this research is to establish the importance of HRM as a strategic partner in an organization. A strategic partner is a party who legally agrees to work with the other party in order to achieve set goals. The first part of this research involves identifying the importance of having HRM as a strategic partner. They include, but not limited, to recruiting and maintaining the right talent, reduction in undesirable turnover and overall success for the organization. The second part identifies how HR can transform to a strategic business partner. The research shows that it is important for organizations to transform from primarily administrative functions to become strategic partners. Coca Cola has been used as the case study company in an attempt of understanding how it uses human resource management as a strategic partner. While expanding to new markets, the aspects of strategic human resource management are used to select employees.
An organization's overall success regarding increased profits and customer retention is the main reason HR management should transform to a strategic partner. As a strategic partner, the HR can recruit talented employees and maintain such talents. Employees are key assets in an organization. If companies focus on recruiting the best talent and retaining them, there is high possibility that they will be very competitive in the market. Maintaining talent is very critical since it enables companies to save on employee turnover costs. Also, the HR department enhances skills through training and development to the demands of the business. By enhancing employees’ skills and perpetual training, employees’ ability to handle challenges and demands of business are enhanced. For instance, at Coca-Cola, HRM has played a big role in the success of the organization by focusing on the staff needs, which has increased satisfaction of its employees by 15 percent (Sparrow et al., 2014).
A strategic HRM partner recruits and retains talent. Staff turnover is sometimes a healthy thing for a company, especially if the aim is to hire the right skilled people. However, undesirable turn over, especially for critical managers may be a loss to the company. From this turnover, I company will be forced to recruit new managers, who may be unskilled. Developing the new managers to skilled employees may take time and money. Undesirable turnover also includes turnover of high generating income staff, especially in sales, top performer’s individuals, and innovative individuals. Therefore, HR as a strategic partner focuses on developing skills and retaining such talents to maintain success for the company. For instance, Coca-Cola HR management has engaged in formulating strategies for reducing the turnover costs and engaging with the employees to boost staff morale. Turnover costs have reduced by 31 percent because of this (Sparrow et al., 2014). Since Coca-Cola is increasingly expanding, it is easy to lose critical staff, especially where they perceive the threat of losing their scope of work because of the expansion. Again, if a company is downsizing, it is also easy to lose staff due to the threat of some departments or jobs becoming redundant (Reilly & Williams, 2006). Therefore, HR has a great responsibility in ensuring developing of skills, retention of critical staff and improving staff morale.
A strategic HR management prepares an organization for changing business cycles. According to Ananthram & Nankervis (2013), HRM as a strategic partner can provide specific knowledge on current business trends, such as outsourcing of support services so that a company can concentrate on core business. Outsourcing saves an organization costs that it would have spent while hiring employees who perform tasks that are not the core business of an organization. The HR is also able to give guidance and direction for the company to fit the needs of industry. For instance, as Coca-Cola Company expanded in the European countries, it engaged with locals to get a better understanding of how they view its products. However, the human resource management saw the need to recruit qualified employees and the company decided to hire a financial manager from Chicago. A strategic HR function is able to advise an organization on business decisions, such as mergers, acquisition, downsizing, and expansions.
A strategic HRM is important to an organization because it helps to improve an organization structure. The HR may advice where to assign individuals and how to assign tasks to different employees based on their skills. Apart from training and developing tasks, a strategic HRM tracks and monitors staff skills and talents and their work experience. For instance, if a company needs to create a new department with specialized IT experts, the HRM can offer suggestions from existing employees who can fit the required needs (Vogelsang, 2013). Traditional HR management in such cases usually advertise for a new position externally or poach employees from already existing companies. Through transfer to other positions, individuals experience growth and are motivated to give better results. Hence, the HR improves the organization structure.
Another important factor for having a strategic HRM partner is analyzing staffing levels. Staffing levels refer to employees in a department that are required for it to work effectively. Usually, this is a function that is ignored by most organizations, especially small scale businesses. However, it is important for an organization to re-align its staffing with the market trends, industrial changes, and strategic changes. As a strategic partner, the HRM can advice on current staffing levels and how the organization can plan for staffing needs in the future. (Vogelsang, 2013). For instance, the HRM suggests how the company can raise money to meet every new position and the required skills employees should possess. For instance, at Coca Cola, the HRM is able to advice on staffing levels as it introduce Coca Cola in new locations.
HR management as a strategic partner plays a key role in giving the company a competitive edge over competitors through human capital. Primary HR functions focus on physical assets to improve the company’s productivity (Vogelsang, 2013). For instance, at Coca Cola, the HRM focuses on hiring and maintaining the best employees to retain its position as the best in the beverage industry. Therefore, the HRM focuses on employees as human capital by developing their skills. Also, the HRM focuses on rewards, which motivate staff to better their performance.
A strategic HRM partner helps an organization to set up the right employee reward schemes. There are various rewards scheme for organizations, such as individual’s performance, base pay, profit related pay, and commissions. A good reward scheme aligns employees with the goals of the organization, which in turn leads to the success of an organization (Ananthram & Nankervis, 2013). HRM advices on proper reward schemes depending with the strategies of an organization. For instance, at Coca Cola, the HRM implemented pay-for-performance, which has successfully motivated employees to improve their performance to benefit from the rewards. Also, the system has created efficient measures, which are used to evaluate employees.
A strategic HRM partner assists the organization to develop leaders, which is a strategic aspect of the future of the organization (Sparrow et al, 2014). For instance, the HRM can have a system to develop individuals. The system helps management understand employees’ needs and help to track the needs to defined careers. The HRM is also able to develop values and proficiencies that are fundamental to leadership. Coca Cola HRM has played a big role in developing leaders, which is key to their strategic expansion plans.
Traditional HR management can transform to a strategic partner through redesigning its functions. First and foremost, HRM should understand the business and offer specific knowledge and guidance. HRM should understand the various department in an organization and be in a position to give strategic initiatives. Secondly, HRM should offer support to each strategic objective. In other words, HRM should be actively involved in developing or implementing business strategies (Ananthram & Nankervis, 2013).
An effective strategic HRM partner can be attained when the HR personnel know the changes in the industry. It is important for HR personnel to have knowledge of the business, customers, leadership traits, the right HR systems, and appropriate delivery systems. Understanding the business is a key element for HR to become effective. Every business is unique and, therefore, the HR has to understand the unique elements of the business, which determines how the human capital behave. Understanding the business enables the HR function to analyze the strategic objectives for each activity. In other words, the HRM is in a better position to add value if it understands the business (Vogelsang, 2013). HR management in Coca Cola Company is involved in creating policies, practices, and regulations that ensure quality hiring and maintaining the right employees to maintain its position in the beverage industry.
It is very important to understand the clients of the business and how HRM can enable the organization to deliver better to its customers. The HRM can support management and employees to contribute to the success of the organization. HRM plays a great role in providing the direction. It should also increase efficiency and effectiveness to overall business processes. HRM should have the right technology and systems to increase efficiency. Finally, HRM must offer quality services to the organization (Vogelsang, 2013)
In conclusion, HR management as strategic partner plays a very important role in ensuring that the organization recruits and maintains talented employees, improves the organization structure, and the success of the organization as well. It shows the importance of organizations formulating plans that will lead to the transformation of HR to a strategic partner. Therefore, there is a need for organizations to transform HRM from traditional role of administrative and operations to be a strategic partner. Traditionally, the HR department was not considered as critical to drive the strategic plans of an organization. The transformation will enable the HRM to contribute to the strategies of the organization. If it is implemented successfully, the competitive position of companies will improve because they will have the best talents in the industry.
References
Ananthram, S., & Nankervis, A. (2013). Strategic agility and the role of HR as a strategic business partner: an Indian perspective. Asia Pacific Journal of Human Resources, n/a-n/a. http://dx.doi.org/10.1111/1744-7941.12004
Reilly, P. A., & Williams, T. (2006). Strategic HR: Building the capability to deliver. Berlin: Aldershot: Gower.
Sparrow, P., Hird, M., & Cooper, C. (2014). Do We Need HR?: Repositioning People Management for Success. Berlin: Springer
Vogelsang, J. (2013). Handbook for strategic HR: Best practices in organizational development from the OD network. New York: American Management Association.
