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HR Strategies that Impact Business Profitability

HR Strategies that Impact Business Profitability

“Human resources are like natural resources; they're often buried deep. You have to go looking for them, as they're not just lying around onHR, Profitability, strategy the surface. You have to create the circumstances where they show themselves.”
― Ken Robinson

The HR department is said to be most important managerial department of any organization. To better understand the impact a HR strategy has on the overall productivity of an organization, we must understand what a HR department is what its key roles are first.

HR strategy and its roles

A HR department is an entity formed by an organization, which deals with the hiring and maintenance of Human resources of the organization. It is reasonable to ask what Human resources mean. They are a set of individuals who make up the workforce of the organization, business sector, or economy. "Human capital" is sometimes used synonymously with human resources, although human capital typically refers to a more narrow view (i.e. the knowledge the individuals embody and can contribute to an organization).

The roles of the HR department can vary from one organization to the other but there are certain roles that all of them share:

  • The process of recruiting suitable candidates for the organization
  • Identifying and meeting the training needs of existing staff
  • Ensuring employee welfare and employee relations are positive
  • Ensure the working environment is safe for employees
  • Raising awareness of current workplace legislation

Planning and the development of a HR strategy is a critical part of the HR process.  It is important that all HR processes and initiatives are developed as part of an overall people strategy which is aligned with, and designed to assist in the achievement of, the organizational strategy and goals.

A key part of the HR planning role is the development of a workforce plan.  This plan is a design for the organization to attract, retain and develop the workforce required in order to the meet its present and future needs.

Another key role of the HR function is the development and implementation of policies and associated procedures.  There are important aspects to include when developing a policy to ensure it is interpreted and implemented correctly when rolled out across an organization.

Common HR strategies

There are some basic strategic HR models that are commonly used, however most large firms combine two or more strategic models to form a unique model that fits the organizations goals best.

The 10 basic most commonly used HR strategies or models are:

  1. Personnel
  2. Generalist
  3.  Business partner
  4. Call centre
  5.  Outsourced
  6. Centers of excellence
  7. Self-service
  8. Fact-based decision-making
  9. e-HR
  10. Performance culture
  11. Strategy models defined

Before selecting a strategy or transitioning into a new one, it is important to study your organization’s business goals and the competitiveness of the industry you are in. Whatever path you take, it is important to remember that being strategic in HR means having a direct impact on business problems and results. So, in that light, select the strategy that is most likely to have a significant impact on workforce productivity and profits.

A well-defined strategy clarifies the role of the HR team. It determines the size, structure and cost of the resource required to deliver it and ensures that all HR activity is aligned to business needs – the most crucial requirement of all – joined-up HR.


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Mary Brown helps entrepreneurs catapult their small business into the 21st century by utilizing ‘New HR strategies with business strategies and scale new heights! On Fourquadrant she presents ideas to empower companies to make evolutionary leaps in their go to market strategies.

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