HR Strategy: People as a Competitive Advantage

Strategic HR vs Administrative HR

Administrative HR: hiring, dismissal, payroll, compliance with labor legislation. Functionally necessary, but does not create competitive advantage.

Strategic HR: designing organizational capabilities necessary for strategy implementation; managing culture as a strategic asset; creating a leadership pipeline.

The War for Talent

McKinsey (1997): "The War for Talent" — competition for a limited resource (outstanding people) becomes a key source of competitive advantage. Has not lost relevance.

Study of top 10% vs average employee: in routine roles, productivity difference is 20-40%; in complex/creative roles — 4-8 times.

Consequence: A-players' performance is nonlinear. One outstanding programmer / salesperson / analyst = 3-10 ordinary ones. Therefore, competition for talent is so intense.

Key HR Practices

Hiring: clearly defined candidate profile; structured interviews (reduce bias); competency tests, not "cultural fit" (which is often = affinity bias).

Onboarding: first 90 days are critical. Poor onboarding = loss of candidate after 1 year and wasted money on hiring.

Development: 70-20-10 model. Individual development plans. Regular developmental conversations.

Retention: salary is a hygiene factor. Retention drivers: development, autonomy, meaning, team, manager. "People don't leave companies — they leave managers."

Performance Management: A-players, B-players (develop), C-players (improvement plan or separation). Tolerance for C-players is a mortal sin for a leader.

Practical Assignment

Develop an HR strategy for your organization (or an imaginary 50-person startup): (1) Which 3 key competencies do you need for strategy realization? (2) How will you attract talent with these competencies (EVP — employer value proposition)? (3) How will you retain and develop them?