│SOUTH WALES BUSINESS REVIEW
Point of View: Sustainable competitive advantage through people Sam Morgan Sam Morgan, Programme Director for CIPD professional programmes at Swansea Business School explores an often overlooked element of building sustainability in to your business – valuing and retaining your people. “People are an organisation’s greatest asset”. How often have we heard this well-worn – but very true mantra? Talented employees are of course the only asset which cannot be replicated by a competitor and therefore are potentially the key to sustainable competitive advantage. I say potentially because, without continuous investment, like all assets their value to the business will depreciate. Some have argued that in order to remain sustainable, individuals working in organisations need to learn more quickly than the pace of change (Purcell and Sisson, 2010). Is this really achievable? Probably not, but I do concur with the view that sustainable organisations are those who nurture talent and develop knowledge within the business – as this is what adds real value in the long term. Indeed, for the Human Resource function doing this more effectively than competitors is an imperative, a key lever to achieving sustainable competitive advantage though people. Nurturing talent and developing knowledge within a business is not something that happens accidentally, these are critical aspects of any business which need to be planned for. As with any plan, appropriate resources need to be attached, resources which if used effectively allow the plan to be met and the benefits to be derived. This is where Human Resources can really make an 10 │ Vol 5 Issue 1 2013
impact on the bottom line and consequently the future sustainability of the organisation. Coupled with talented, knowledgeable experts in the field of people management, organisations also need to ensure that such experts have access to adequate funds if they are truly to achieve competitive advantage through people. Why then do organisations cut back on investment in people development during times of austerity? I would strongly contend that this is the very time that higher levels of investment should be made in learning – after all it is people developing solutions to critical business challenges that will improve results and create a more sustainable future. The CIPD (2013) identified in their annual review of Learning and Development activities that in only 8% of cases has the economic/funding circumstances of UK organisations improved over the past 12 months, consequently organisations across all sectors are cutting back on their overall investment in developing their employees. Whilst not surprising, this is still concerning, as when reduced funding in learning and development is combined with a reduction in headcount within organisations, in many instances employees are required to take on a wider remit. Regrettably the funding to develop them to undertake additional responsibilities and deliver tangible results
to their struggling organisations is ever reducing. This may then lead to a cycle of increasing stress levels, higher absence rates and general disengagement from the organisation – all of which adds to higher costs, poor performance and decreased sustainability. This is of course a vicious circle which many organisations are currently experiencing. Although it is appreciated that organisations do not have bottomless pits of money to spend on training and development, most organisations do have individuals who have accountability for the attraction and development of talent – usually the Human Resource function or designated persons. These people should be central to designing and developing innovative and lower cost solutions to attracting, retaining and developing people, in order to help make their organisations more sustainable. Regrettably in times of austerity the Human Resource Function’s attention is often focused on facilitating exit strategies, streamlining terms and conditions and managing disputes – all essential tasks, but not ones which will lead to long term prosperity. Now is a critical time to invest in HR and allow them to innovate for the future; to do this effectively however they themselves may need to develop additional skills and knowledge within their own teams.