Human Capital Management Strategy

The talent strategy needs to be agile and resilient enough to accommodate fast cycles of strategy evolution. 

 Digitalization and globalization have huge impact in the business and world, and talent has become the defining theme of this new digital paradigm. However, very few organizations have well-crafted people or human capital strategy as an integral element in their business strategy. But what are the ramifications for digital Human Capital Management (HCM) Strategy. Does the structure of the organization need to change to achieve the strategy? How will it impact on the overall digital capability (competency + performance) of the organization? What are the core digital competencies needed to achieve the strategy? Shall you need to unleash talent potential via training and development, or shall you recruit through alternative digital talent pipelines? How are you going to differentiate talent strategy, in line with the business strategy, that will ensure the business has the right skills, in the rights position, at the right time and for the right cost?

A successful HCM begins with understanding your business: The competitive environment, customers' expectations, strategic and operational goals and other factors affect your organization. and talent management is a strategic matter, they are too critical to be assigned only to specific functions and regulated by silo processes or mechanical procedures. Build a people strategy based on gaps identified against whatever information available at hand and benchmarked against best industrial practices, legal compliance, and progressive HR strategies. Defining digital talent strategy shall focus on strategic growth areas, future business needs, and continuous measure and refine strategy. That means strategy must also be based upon the collective strength of the resources available.Connecting these (potential) strengths with the opportunities on the marketplace is a key driver for HCM.

HCM strategy is about discovering, cherishing and developing the philosophy and signature processes for long-term talent focus. With continuous change and digital disruption, HR role these days is of talent enabling, facilitating, and collaborating to leverage opportunities and maximize investments. There is always a delicate balance to be achieved between corporate, business line and individual perspectives. In the end, business as a whole is all working towards achieving the same goal, managing change on a larger scale based on strong business imperatives and a sense of joint responsibility across the organization. People make a difference, as well as quality relationships

HCM strategy needs to be Agile and resilient. Because the digital world is VUCA, short-term guesses must be tested and revised more often, more quickly. The results of each test should be put into a management feedback loop to see if results are aligned to and supportive of longer-term talent strategy. It's less risky to fail quickly and recover quickly. Managing strategy in the short-term is analogous to agile software development methods or crowd-sourcing beta products and rapidly incorporating feedback in product revisions; it is very iterative. The talent strategy needs to be agile and resilient enough to accommodate fast cycles of strategy evolution. If the human capital management framework is perceived as too cumbersome to operate and to lag strategy cycles, then HR justifiably earns the 'irrelevancy' anchor to wear around its neck.

The HCM strategy may also involve the development of performance and capability framework.  It is also important to tie-in HCM strategies to the Capability Maturity Level of the organization. The definition a performance management system is a system where the expectations are properly defined and the individual manager or employee can manage their own performance and utilize it as a regular reporting tool (empowerment). Under good governance principles, the development of performance management systems that are also reporting systems is essential. People management is complex; the effectiveness of people strategy depends on how it draws upon all the various HR/OD etc fields to come up with something integrated. And all the various levels or elements of the strategy that flow from that - be it an overall HCM Strategy. Many HR functions don't think cross-functionally and holistically and as such, can't formulate an effective and comprehensive HCM Strategy to align with  the business. Now, the available digital technology and tools enable the HR assets to be placed on the balance sheet. If the organization is using modern human capital management approaches, they will be able to plan, measure and manage the human capital more effectively.

 

From strategy on the paper to living on the strategy is a key step in business execution. The HCM strategy document needs to highlight broad strategy per talent management process, key components, deliverables agreed to the time term, main risks and control measures, supporting technologies noted and defined metrics. If HR understands this strategy, they can live and influence components within this strategy in their relevant sphere of influence, whether it is with local, regional or corporate business leaders. The follow-through from strategy to well-defined operational guidelines and buy-in of suitably equipped people in HR infrastructure is the key to moving from a strategy on paper to living on the strategy. In many ways that are perhaps the most productive part - the strategy that comes out of it more like the icing on the cake. The more that dialogue to develop mutual understanding between HCM and business occurs the better!

Once the holistic HCM strategy are well defined with all key strategic players, everyone knows exactly what is the recommended or agreed processes and the interdependencies of contributions becomes clear, the talent management leaders or managers will gain the level of expertise to get into the heart and mind of their digital business, to play the connecting role in bridging the weakest, but the most critical link in the business-People. A well-defined HCM strategy distinguishes actions to guarantee your workforce consists of the right people with the right skills in the right roles at that right time and are supported with the right tools to achieve your business priorities. 

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Posted in: Strategy,Talent Master