The main objective of a business organization is to gain profit, and for this, a firm must establish its name amongst the customers. Every business organization strives to achieve this position in the market, and as a result, the competition is always neck to neck amongst all the players. Gaining an edge over the other players is what each and every firm is looking at, and a varied no. of approaches spread to a scope of different areas have been taken into consideration for this. Some of these include innovative marketing strategies, advanced technologies implied in production methods, variant quality measures, etc. However, a very important aspect has always been overlooked in this process, and that is that the concepts and innovations are brought in by the people, and it’s the people who implement and execute the new theories and ideas. The most important asset and perhaps the most powerful potential source of competitive advantage for a company are the people associated with it, the employees.
A company can only survive in the market if it has an effective workforce to implement the innovations and ideas properly into the work channel of the company. An effective workforce is defined as the group of people whose skill sets are properly aligned to the strategic plans of the company towards its future. To achieve an effective workforce, the first and foremost step that needs to be taken by a company is to develop its human resources as an aspect of the core competence, i.e., the employees of the firm should be the key holders of the unique capabilities of the organization that renders it to be superior to its competitors.
Secondly, the organization is required to provide a comfortable internal environment to its employees, as well as identify the opportunities and threats contained in the external environment around them. The company should also identify the unique capabilities present in its human capital that may give rise to new ideas and plans, and also it should keep a check on the drawbacks in their human resource, so that the limitations of the strategic plans are known well in advance. Thereafter, the company should imply selection methods, training and development programs, and appraisal and compensation systems, etc., to insure that it has sufficient employees and managers to implement the strategic plan.
All said and done, we cannot ignore one very important factor, and that is employee retention. All the hard-work and money spent on all the HR practices and methods would go waste if the employees leave the organization looking for better opportunities after they receive all the training. Hence, apart from all the training and development programmes that adhere to the requirements of the firm, the organization needs to take up certain other initiatives that would pertain to employee satisfaction. It is a must for the organization to convince its employees that the goal of the company is consistent with the personal goals of the employees. The people need to be motivated enough to put forward their best efforts to let the company attain its goal, and it is the responsibility of the organization to provide them with such motivation.
As an example, let us see a case study:1
“people are the primary link in the value chain, and thus, value is created by focusing on employees first”
The above principle was devised by the world’s leading express transportation company, FedEx express. FedEx Express has a huge employee bank of more than 140,000 people across the globe, who serve around 1 million customers situated at every corner of the United States and 220 more countries and territories.
FedEx Express was built on a philosophy of People-Service-Profit, i.e., it considered people to be its main concern and not the profit, and the people included their employees along with their customers. The company established and maintained a culture where the employees were treated with extreme job satisfaction and security. The employees were in turn delivered an exceptional service to the customers, and as a result the company was duly rewarded with overwhelming profits, both financial (in monetary terms) as well as non-financial (increased goodwill of company, customer loyalty, etc).
Fed-Ex gained a huge competitive advantage over the other transporters (e.g. DHL, UPS, etc.) due to its superior customer service and guaranteed on-time deliveries, since the basic technologies used by all the competitors were similar. It was the effective workforce created by the firm that gave it the key competitive advantage.
Therefore, it is high time that companies realize the importance of their human capital pool, because it is always about having the right people, in the right job, at the right time.2