Spotlight on HRM

Human Capital: A Key to Canada’s Competitiveness

What makes an economy accelerate or stagnate?

In answering this question, many will point to key economic indicators such as real gross domestic product (GDP), consumer price index (CPI), and consumer confidence. Others may point to effective policy or the flow of goods and services among the numerous individuals and companies in an economy. Regardless of the micro- or macroeconomic drivers, the shape of an economy is highly influenced by people. It is people who set policy and regulations. It is people who lead the many micro, small, medium, and large organizations that make up our economy. It is people who purchase or use the goods and services within an economy.

With people at the core of an economy, the importance of human resources or human capital cannot be overstated. Part of the human capital equation is productivity, that is, how much output an individual can create in relation to the inputs.

According to the Conference Board of Canada, Canada scores a B for productivity and growth.a

At points in history, organizations have turned to technology as the basis for improving productivity. Today, however, this approach is insufficient for Canada to keep pace or to catch up with the productivity improvements in other developed countries. The Conference Board of Canada has pointed to the importance of innovation in strengthening Canada’s productivity.b

Similar to productivity, human ideas and ambitions rest at the core of innovation. As a result, an increased focus is being placed on the role of human capital in creating long-term and sustainable productivity improvements.

The role of human talent in creating longterm sustainable economic and social benefits to

Summary

The central challenge for organizations today is to thrive in a highly complex and continuously changing world. To do this, most organizations find it necessary to maintain high productivity and effectiveness levels and to have a global focus. Strategic management of organizations is one approach to adapting to a continually changing global context. Human resource management aims to optimize the contribution of organizations and communities through productivity necessitates a collaborative and long-term approach among organizations, governments, communities, and numerous other support structures. a. Conference Board of Canada (2013), International Ranking— Labour Productivity Growth, accessed September 23, 2018, from https://www.conferenceboard.ca/hcp/Details/Economy/measuringproductivity-canada.aspx b. Muzyka, D., and Hodgson, G. (2017), To boost productivity, Canada needs to focus on innovation, The Globe and Mail, accessed September 23, 2018, from https://www. theglobeandmail.com/report-on-business/rob-commentary/ to-boost-productivity-canada-needs-to-focus-on-innovation/ article26283449/ c. Ibid. employees to the organization’s goals. The field of human resource management thus focuses on what managers and human resource specialists do and what they should do.

Among the key elements to creating innovation and, in turn, productivity is education.c Because knowledge is a necessary precursor to realizing the full potential of human capital in creating productivity improvements, governments, communities, and education systems must come together in developing and enhancing citizens’ overall knowledge base. Canadian communities must also understand the importance of life-long learning. Because of the time required for learners to progress through education systems, a long-term approach to planning in relation to the development of human talent must be taken.

More recently, we have seen growing examples of how productivity enhancements are often found through new innovations. Similar to developing a learning city, significant lead time and planning is needed to create a community in which innovation thrives. Examples abound of communities that have come together to create ecosystems in which innovation and entrepreneurism are strong (e.g., Silicon Valley).

This chapter pointed out that human resource management is the responsibility of every manager. The HR department provides a service to other departments in the organization. In the final analysis, however, the performance and well-being of each worker is the dual responsibility of that worker’s immediate supervisor and the HR department.

Strategic human resource management is systematically linked to the strategic needs of an organization and aims to provide the organization with an effective workforce while meeting the needs of its members and other stakeholders. It is important that human resource strategies and tactics are mutually consistent and provide direct support to the organization’s mission, goals, and strategies. Even the best-conceived strategies may fail if they are not accompanied by sound programs and procedures and aligned with organizational strategies.

Strategic human resource management necessitates an exhaustive evaluation of an organization’s internal and external environments. This chapter discussed factors that should be reviewed before formulating human resource strategies. These include economic, technological, demographic, and sociocultural challenges. As well, the chapter pointed out that continuous evaluation of strategy and proactive management are critical to ensuring the successful management of human resources.