At a time when Sri Lanka is gearing to leap forward in its socioeconomic fronts, being strategic is of utmost importance. It essentially shows how “smart” you are in “playing the game”.
A game plan cannot be conceived or commissioned without people. In any organisation, we have physical, financial and information resources. All those three resources aren’t of any use if you do not have the most precious resource, its people.
That is exactly, why people, to be precise the “right” people are the most precious asset to any forward-looking organisation. Today’s column is all about strategising human resources in the Sri Lankan context.
Managing Human Resources strategically
As we are aware, HRM is all about the policies and practices involved in carrying out the “people” or human resource aspect of a management position. Strategic HRM (SHRM) goes further. It is an approach that defines how an organisation’s goals will be achieved through people by means of HR strategies and integrated HR policies and practices.
As Schuler and Jackson (1987) define, it is “explicitly linking HRM with strategic management processes of the organisation and to emphasise coordination and congruence among the various human resource management practices”. According to Wright and others (1994), SHRM is “the pattern of planned human resource deployments and activities intended to enable a firm to achieve its goals”.
Truss and Gratton (1994) further elaborate SHRM as, “the linking of HRM with strategic goals and objectives in order to improve business performance and develop organisation culture to foster innovations and flexibility”.
Global HR challenges with local relevance
Dave Ulrich, in his path-breaking article to Harvard Business Review (January-February, 1998) highlights several such challenges. According to Ulrich, “HR should be defined not by what it does but what it delivers”. He identifies five critical business challenges faced by organisations around the world. It is worthwhile to discuss the above in relation to Sri Lankan context as well.
With the rapid expansion of markets, managers are struggling to balance the paradoxical demand to think globally and act locally. Globalisation requires that organisations increase their ability to learn and collaborate and to manage diversity, complexity, and ambiguity.
Sri Lankan organisations should be geared to explore the gold mines the globalisation offers, while avoiding land mines. SHRM has to cater for competency development of employees. Their enhanced knowledge, attitude and skills will lead to competitive advantage of the organisation. That is the only way to survive and succeed in a “flat world”.
ii. Profitability through growth
The drive for revenue growth puts unique demands on an organisation. Being creative and innovative, encouraging free flow of information, keeping in touch with the rapidly changing need of customers are some of the key strategies involved. This focus got further reinforced in the wake of the current global recession.
Sri Lankan organisations need to take note as to how best they can assess the real customer needs on a regular basis, whilst being dynamic providers of goods and services as progress partners, is the order of the day. SHRM should work hand in hand with business leaders in providing people with right competencies in ensuring the required performance. Appropriate measuring tools such as the Balanced Scorecard should be employed.
Managers need to stay ahead in the effective use of information, and should learn to leverage such information for business results. Else as Ulrich (1998), says, it will be a case of “being swallowed by a tidal wave of data without new ideas”.
In Sri Lanka, too, an increasing awareness on the use of Information and Communication Technology (ICT) for economic and business development can be seen. Despite multiple initiatives from both the private and public fronts, the real utilisation of hardware and software assets, with tapping the full potential of our bright, young “liveware” is yet to be done. SHRM should cater for technology leadership, in using ICT for employee development.
iv. Intellectual capital
Knowledge has increasingly becoming direct competitive advantage, posing a challenge to organisations to ensure that they have the capability to find, assimilate, develop, compensate and retain competent individuals.
Sri Lanka, in the face of brain drain, particularly in industries such as ICT, needs to find ways and means such as gain-sharing, in order to retain such intellectual capital within the country. A reverse brain-drain is a strong possibility with the growing optimism in the business circles. There are opportunities for SHRM to play a vital role in this respect.
v. Change, change, and more change
Perhaps the greatest competitive challenge organisations face, according to Ulrich (1998) is adjusting to the need of embracing non-stop change. The ability to learn rapidly and continuously, innovate ceaselessly and take on new strategic imperatives faster and more comfortably has become the order of the day. In other words, organisations need to be in a never-ending state of transformation, perpetually creating fundamental, enduring change.
Perhaps, a key challenge lies in the sustaining the dynamism in the face of global changes, not being a victim but becoming a victor. Now the time has come, to enter into a rapid phase of growth and development. SHRM role is immense in this aspect, where organisations have to plan and implement how people factor can be utilised for the goal attainment.
Tourism can be a case in point. Experts have forecasted an acute shortage of professionals in time to come, with the wake of business expansion. SHRM strategies, action plans and implementation should cater for bridging such gaps.
Being brilliant on six Bs
It is interesting to look at several interrelated components of SHRM. I would go with Ulrich and Brockank (2005) in calling them six Bs. These six Bs essentially refer to choices an organisation has with regard to selecting and developing employees. In fact they are strategic, as the consequences are long term, with high impact to the bottom-line. Let’s look in to each B in detail with regard to Sri Lankan context.
This covers the aspect of staffing. With the increased competition among the organisations to become the “preferred employer” or “employer of choice”, attracting the right talent to one’s organisation is the key aspect in focus. Building of relationships with key sources of talent, use of referral hiring, building a web-based hiring strategy and targeting of potential employees can be considered as some of the key initiatives.
In the Sri Lankan private sector, especially in the services, a considerable shift is seen from the traditional methods of recruitment to more innovative approaches. With stringent policy framework and centralised approach to recruitment, public sector is lagging behind in most of these initiatives.
Choices in training and development are captured here. Identification of training and development needs is of utmost importance in this regard. Having clarity on programme participants, presenters, designers, coverage, delivery methods and expected behavioural changes are some of the vital components associated.
A growing emphasis on training effectiveness with proper mechanisms to measure is seen in the Sri Lankan private sector. Use of Kirkpatrick model to assess training effectiveness at different levels is one such approach. Return on Training Investment (ROTI) has slowly become a critical factor in the local scenario as well, in justifying the monetary allocation for training and development.
This encompasses the choices in contracting for talent. In other words, non-core jobs of an organisation can be performed by outsiders, preferably adhering to pre-determined specifications and quality parameters. Forming of joint alliances, visiting benchmarked sites, retaining consultants, outsourcing of work, and maintaining relationships with former employees can be considered as some of the key initiatives.
With the ever-increasing focus on cost management, many Sri Lankan organisations growing have already resorted to ‘borrowing”. Pressure from trade unions and several outdated labour laws are seen as barriers in moving towards this direction.
Choices in shrinking the workforce are covered here. Rightsizing by way of involuntary downsizing has become a buzz word in this regard. Whilst the business case is clear, the humane aspect of treating the low performers not only firmly but also fairly is important.
In many volatile industries, bouncing is more becoming a business necessity. Industry pressures to stay competitive have propelled organisations to take this path. The employee-friendly nature of Sri Lankan labour laws has come to the rescue of some of the victims of bad management decisions by their respective organisations.
This refers to the range of choices in retaining talent. Having developed the knowledge and skills of high performers of any organisation, seeing them leaving is the last thing an organisation would like to see. Finding out why talented people leave and taking appropriate actions to arrest the outflow should be high in the HR agenda. Offering of a variety of financial and non-financial rewards to stay has also needs to be strengthened.
Encouraging evidence can be found in many leading organisations in Sri Lanka. Yet, the reality remains that, when overseas opportunities are galore with unmatchable financial offers, employees tend to seek better prospects. As we discussed in several earlier columns, effectively engaging the employees with a clear purpose can be a sure-cure in arresting the rot.
Choices in promoting the employees are captured here. When a career ladder is available for them to climb, and when the organisation is genuinely providing the support and encouragement, chances of them contributing better in a more committed manner is high. Establishing criteria for new jobs, allowing volunteers to take up challenging tasks, evaluating candidates’ potential, supporting of new job holders are some of the key actions in this regard.
With rapid expansion of businesses, opportunities for promoting are on the rise, in many Sri Lankan organisations. With the increased responsibilities, the required knowledge and skills level also has to be expanded.
Being strategic with regard to managing and developing human resources is a vital component for organisational growth. Sri Lankan HR professionals have a pivotal role to play in synergising with other functional colleagues. The effectiveness of their contribution will be reflected in organisational, industrial and national performance.
(Dr. Ajantha Dharmasiri is a learner, teacher, trainer, researcher, writer and a thinker in the areas of Human Resource Management and Organisational Behaviour. He can be reached on email@example.com.)