Human Capital Management – Strategic Approach to People Management

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January 21, 2013 by suhailfarooq29

By Suhail Farooq, MSc in Management Consulting 3 student

As global business enters deeper into the knowledge market, there is growing appreciation that people management is of immense importance. However, conventional approaches are rarely regarded as being adequately associated to the core business and organisations at present face difficult talent challenges. The capability to sustain a balanced supply of decisive talent is a challenge for all organizations globally.  Some of the major issues that organisations are facing in fostering the fresh talent include looming skills shortages, an increasingly cross-generational and diverse workforce, knowledge transfer; organizational mergers, and employee mutualisation schemes between partner firms or departments and considerable leadership gaps. Strong cost pressures, rising competition, and more challenging customers are additional factors that give a new sense of urgency to the concept of people management. We are at the phase of business today where organizations need to optimize their workforces, and thus strategic people management is of great importance.

The Human Capital Management approach adds a decisive strategic dimension to people management, by making sure that investments in people are made as meticulously as other capital investments. Strategic people management creates a distinct path between the goals of the organisation, the people required to deliver those goals, and the functional HR Team. The approach helps the Human resource department establish its position as a strategic business partner in the organisation. Thus the detection and valuation of people risk moves away from being the individual responsibility of Human Resource department to rather a collaborative model with business function in which short, medium and long term risks are developed into a structured group and effective planning is done to moderate risks and manage opportunities.

In my view, creating a link between people initiative and business outcomes is at the centre of the Human Capital strategy approach. Active changes and modernization in business processes require a focused human capital that is fully occupied and effective, uncompromisingly evolved and skilfully utilized. In my opinion a effective human capital development strategy should comprises of following critical elements:

  • Strategic direction setting.
  • Talent maximization.
  • Monitoring and evaluation.
  • Utilizing ,engaging and retaining.
  • Learning and developmental activity.
  • Innovation efficacy.

suhail circle

The Visual format that I have tried to put forward explains that these strategies make sure an organisation communicates, cooperates and innovates with each other to make human capital leaner. I believe that irrespective of an organization’s level of internationalization, the elements mentioned in the visual format help them to build strategies that develop their competitive advantage by bringing innovation and agility to their business processes. Increasing their focus towards learning and development activities and helps them identify their performance gaps.

By adopting these strategies, organisations can increase their performance in different business environments by adapting to local needs, enhancing their productivity and becoming cost effective. I was able to implement some of these strategies at The Perfect Relations ltd New Delhi (One of the largest Media Consulting Company in South Asia) with great success, particularly in the areas of goal setting, talent maximization, monitoring and evaluations, and learning and development initiatives. In my view Human Resource departments and business functions must take this collaborative approach and work collectively to understand the long-term perspectives of the business that reflect strategic objectives. Their association can create a substantial link between risk management on the one hand and Human Resource strategy and execution on the other.

In my opinion, with this directive human capital can be the most considerable and decisive factor to creating the advanced rational capital necessary for building a competitive advantage, enhancing productivity, and facilitating strategic business change.


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A blog by Grenoble Graduate School of Business students.

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