Small businesses can use human resource practices as an integral part of their business strategy. HR can work to develop employees to their fullest potential, preparing them to be used in strategic ways. In a business climate where every advantage is important, task HR to prepare employees to play expanded rolls in the organization.
HR analysis of data can provide a company with a competitive advantage. Using a system that can collect and store information, including the results of employee testing and performance measures, HR can determine the employee with the highest performance score in a targeted skill or determine who should be given a promotion or placed in a strategic position. Similar data can be analyzed in HR to determine how many employees are needed at customer service posts.
Companies become more competitive if they attract and retain the most talented recruits in their industry. Top employees must fit into the company culture and perform to their potential. Some companies have studied their greatest predictor for how employees will perform. Some might look at a person's academic record or a test score, but others might consider other candidate attributes. AT&T and Google seek a proven ability to take initiative. A small business owner may not be able to pay as much for the best talent as her larger competitors, but she can hire candidates with the qualities that predict success in her company.
Small business owners can increase their competitive advantage by leading in ways that emphasize the importance of each employee's contribution. This is a two-way phenomenon because employees who feel that their roles are important also feel intense membership in the organization. Committed managers and employees empower the organization to move more rapidly to attainment of a company's strategic goals.
Competitive companies must find ways to increase the flow of information throughout the organization. In this type of organization, people with special knowledge willingly share what they know, so their insights become part of the firm's intellectual capital. Overall, effective communication strategies have the most impact when employees consistently build on the ideas of others and suggest new innovations. This kind of organization is the opposite of a company that is bogged down by groupthink, where everyone thinks alike and groups makes decisions through consensus.
