The general idea of the competitive advantage (CA) is pretty clear and transparent. Every growing company tries to gain the advantage to expand its business and increase profitability. To do so, the company must be aware of every single competitor in the industry, and it should be able to foresee their behavior, too.
The organization will have to come up with a strategy to ensure that the competitor is not going to take over the market share. Just copying the stunning company culture, values, and decision-making processes is not the solution, as these components can’t be transferred across companies or even businesses without adjusting them.
Defining Competitive Advantage in Human Resources
Competitive advantage means positioning your organization in front of different organizations in order to achieve prevalence in quality, low cost, worth, or innovation. No matter what this means to a company, it might be the only key to success, business growth, and financial stability.
Professionals usually split CAs into comparative and differential advantages. The former has to do with finances: for instance, a lower cost of manufacture. Differential advantages are product-based, leading to customer perceptions over quality.
However, among all the techniques that help gain a competitive advantage, improving your human capital is the most essential contributor to achievinga CA in the marketplace. This goes to show that organizations with better and more engaged employees have a competitive advantage.
Human Resources professionals are the ones who can create strong CA through their personnel policies. Performance and employee engagement are the keys to better customer service, which helps boost sales and, in a long-term perspective, increase a company’s revenue.
A good employer should realize that various competitive people management practices can make the business appealing. A company that uses such techniques will become a very attractive place for the most skillful and experienced candidates, allowing the employer to use their talents in favor of the organization.
This proves the fact that HR managers are the most important providers of competitive advantage in pretty much any industry. Organizations with higher CA have an amazing opportunity to become way more successful than their competitors, and they will not blow their chance. Of course, similar companies in the marketplace will be trying to neutralize the advantage, so the most valued CA is the one that is stable and strong enough to resist the pressure.
In order to provide a strong competitive advantage for the organization, HRs need to develop a certain Human Resources competitive advantage strategy that would meet the requirements of efficient management. A thorough, well-developed HR strategy is an advantage that is tough to beat.
What Are These HR Strategies and How Can They Help Gain a Competitive Advantage?
Those organizations that have come up with a thought-through and reasonable Human Resource competitive advantage strategy have a great advantage over competitors. The proper and efficient human capital management brings shocking results: employees enjoy working for the company if they feel supported and empowered. But how should HRs decide which areas will be the source of the competitive advantage?
Every organization has individual business goals which contribute to developing a CA strategy. Your HR strategy should also be developed to achieve these goals by attracting and retaining workers with specific benefits that support competitive strategies.
These benefits may include:
- Employee empowerment and participation
- Employment security
- Selective recruiting
- Incentive pay
- Support and respect from the management
- High competitive wages
- Wage compression
- Employee ownership
- Independence
- Information sharing
- Training and development of skills
- Promotion
While choosing and hiring workers, these traits need to be evaluated on candidates as part of the recruiting process. For current employees, these benefits can be developed in the company’s corporate culture.
Final Thoughts
Typically, companies don’t want to make their employees unhappy. Employees are the ones who interact with your clients on a daily basis and produce your products. They use their creative minds to come up with fresh ideas and take care of all the problems. They represent your quality and worth.
Human Resources managers can help build a solid competitive advantage through their personnel management policies. Employee performance and a high level of engagement is an advantage that often results in better customer service and may get more clients than those organizations that have little or no CA at all.
Using Lanteria is a great way to boost productivity and increase your employees’ engagement in order to gain a competitive advantage. With our comprehensive platform, you can create a sustainable internal atmosphere that brings long-term benefits compared to competitors within the industry. The platform will provide you with specific Human Resource advantage strategies to attract, develop and retain the human capital you need to be competitive.
