Introduction
People, their intelligence, creativity, and ability to produce know-how constitute the most valuable asset of any IT organization in the current competitive landscape. Consequently, ensuring a high-quality human resources management system is a precondition for the enterprise's effective operation and growth. Finding, selecting, and employing an IT business is a time-consuming and expensive endeavor.
Each corporation aims to attract only those human resources who totally align with its objectives and core values. In addition to the expansion of the IT industry, the complexity of the jobs that experts must handle is increasing. In addition to selecting personnel and setting optimal conditions for their development, it is crucial for managers to develop their leadership skills.
Today, HRM encompasses not only HR and accounting (personnel accounting and payroll), but also the administration of staff training and development, staff selection, motivation, remuneration, career, etc. Effective application of HRM approaches permits a new level of employee motivation, which increases not only the company's profit but also its image, allowing it to effectively enter new markets and achieve a durable competitive edge.
Internal HR forces
The organization's base for competition is web development and the integration of business applications into the corporate information management system (CIMS). The organization employs 250 people, some of whom work remotely. The project's organizational structure is a matrix. As the organization applies Agile approach to all of its projects, the HR service is tailored to the Agile environment, which includes the following practices:
"Interaction systems," as opposed to merely "recording systems," i.e., cooperation, information exchange, project management, etc.; At all levels, focusing on lifelong learning and a culture of learning Development of compensation and recognition initiatives for professionals of equal standing; Development of programs to encourage team diversity; A corporate culture that prioritizes employee participation, teamwork, and trust.
Thus, the HR department performs the duty of coordinating Agile processes across the firm, as well as preserving motivation and culture.
To be effective, the HR department and other business divisions must undertake a variety of tasks, ranging from fundamental operations to strategic planning. However, many HR professionals make the common error of focusing primarily on strategic management or tactical components, despite the importance of combining the two. There are numerous "models" that explain the most essential aspects of the typical HR service.
Undoubtedly, the "four sectors" or "business partnership" model suggested by Dave Ulrich of the University of Michigan is the most well-known. Regardless of the effectiveness of this approach, it does not define the function of strategic planning. Alternately, the IT organization under examination uses the Five Levels of HR Contribution Model (see Figure below), which better describes all levels of HR service operating. The "work" of human resource managers can be split into five distinct levels, from operational to strategic.
Model of the Five Levels of Human Resources Contribution.
Managers in strategic business positions identify as clients only the primary end users of the company's products and services. Priority should be given to boosting the value of these products and services to the end user, and any action taken inside the organization should be viewed from this perspective. However, while delivering services within an organization, it is also essential to identify internal clients (Storey, Ulrich and Wright, 2019). To exert strategic influence, HR managers who have already gained leadership position and those who are on the verge of doing so must identify the company's senior executives as their "internal clients." There are numerous causes for this, some of which are listed below:
By definition, top executives occupy a strategic position: they control resources and direct units. Almost no mid-level manager can exert influence at the strategic level; therefore, designating them as clients eliminates any opportunity to influence the outcomes. Top executives supervise line managers, which allows them to exert influence, urge them to accept the HR manager's advice, and implement HR programs. Prior to becoming senior executives in other business sectors, HR directors must demonstrate their department's performance in promoting productivity, increasing profits, and attaining common company objectives.
Therefore, the company's top executives are the primary internal customers of HR divisions. The HR manager must comprehend the business responsibilities of other senior executives, as well as their needs and expectations surrounding human resources, before proposing suitable HR systems. All HR planning, services, assessments, and performance measurements must be adapted to these internal clients' aims and objectives.
The Harvard model of HRM is also used to ensure the fulfillment of HR service functions, with an analytical framework consisting of six fundamental components: situation factors; stakeholder interests; HRM policy choices; HR outcomes; long-term consequences; and a feedback loop between the organization and its stakeholders (Storey, Ulrich and Wright, 2019). This model has two distinguishing characteristics:
Middle managers are responsible for a substantial portion of the competitive strategy and personnel policies; employees must develop rules that guide the development of staff activities and are applied so as to mutually reinforce the middle and lower levels of management, in accordance with the Agile vision.
Fig. 2 depicts the Harvard scheme in the manner in which Beer et al. modeled it.
Fig. 2. Harvard HRM model.
As knowledge employees eagerly do complex jobs, both models contribute to the overall Agile environment of the firm under discussion. This is their natural employment; however, the following must be taken into account: it is essential for them to comprehend the significance and goal of their labor, and they require recognition and esteem. These employees must assume responsibility and participate actively in company activities.
In order for them to develop inventions, they must be granted expansive authority and creative freedom. This is the cornerstone for a new method of employee interaction. Management must comprehend not only the motivations of such individuals, but also the necessity for necessary management changes. This is closely tied to the transition from directive- and control-based task management to leadership development. This strategy is articulated through two Agile HR principles: internal employee motivation and decentralized decision-making.
This naturally impacts the HR service's interactions with managers and employees. This applies not only to career advancement but to the entire personnel value chain.
HR function: external factors' impact
HR professionals who are tasked with improving performance and fostering a "culture of productivity" within the organization frequently complain that it is "unfair" to expect them to manage productivity, as the final results are influenced by many factors other than the actions of individual employees (Purcell and Boxall, 2016). To achieve a strategic result, one must obtain a loan of trust and, most importantly, assume responsibility and, in a sense, become the "master" of some key region. In our situation, the HR department must feel invested in the objective of increasing employee productivity and assume responsibility for its execution, taking into consideration the impact of external factors. The impact of the macro environment on human resource management is dynamically apparent. Specifically, this pertains to the following factors:
Market situation
HR services are impacted by market conditions: when market conditions change, organizations must also monitor these shifts, determine how they effect resources, and analyze these functions. In a very dynamic IT market context, this is of utmost significance.
Competition for IT professionals
In addition, when firms within the same industry fight for the most qualified resources, it is vital to analyze the competition and provide the greatest resource packages according to industry standards. The IT industry is in a state of perpetual evolution and requires highly qualified professionals. It is challenging to locate qualified people in this industry. The extensive usage of headhunting is a result of the fact that companies expand their capacities quicker than specialists appear. Therefore, the HR service must sustain its 'competitive advantages' in the minds of its employees.
Sustainability efforts and integrated reporting
Today, CSR has become one of the most important determinants of a company's goodwill and total value. Integrated reporting also influences the appeal of a company to both customers and investors. Consequently, the HR service of the firm under consideration should participate continuously in the development of CSR initiatives, drafting elements of integrated reporting, and working with staff to ensure their adoption and adherence to CSR values and politics.
SWOT and PESTLE analytical tools comparison
Rarely is it mentioned in the business literature that SWOT analysis can also be used in the HR profession, despite its prevalence as a tool for evaluating different strategies. When conducting a SWOT analysis, we are primarily concerned with the following areas: recruitment, personnel development, project management, and organizational analysis. The objective and capability of SWOT analysis in regard to HR services is to map out next steps based on objective data. Remember that the human management service's strengths and weaknesses are dependent on the service itself, while opportunities and dangers must be identified externally.
It makes sense to analyze external influences initially. Opportunities frequently decide the course of HRM's evolution. To evaluate the actuality of a given opportunity's use, the head of the HR department must respond to a series of questions.
How can the benefits of a particular opportunity be communicated at the executive level? Does the HR department has the means and resources to realize a certain benefit? Will the HR service capitalize on the opportunity more effectively than a third-party vendor? What is the economic efficiency of pursuing each distinct opportunity?
The finest opportunities are those unrelated to external dangers, for which the company's capabilities are applicable, and which align with the company's overall development strategy. External risks are potential undesirable scenarios that, in the absence of safeguarding systems, can cause issues with the HRM's operation. However, the minor threats can be disregarded. Other hazards necessitate continuous monitoring and the creation of a response plan in the case of a specific threat.
After assessing the external influences, it is possible to evaluate the interior environment. It should be kept in mind that periodic study of internal variables is desirable so as not to miss the opportunity to adopt external positive elements and to ensure that the HR service is continually developed. One of the outcomes of the analysis may be a plan to address the observed service shortcomings. In this situation, the plan can be both evolutionary and provide for a gradual change in the service's work, as well as revolutionary, resulting in a dramatic change in the personnel service's work up to the movement of some business operations to an outsourcing service.
In completing a SWOT analysis, there is a lack of coordination between the company's departments, as evidenced by the organization's experience examined in this study. Therefore, it is crucial to consider the working relationships between departments and employees as a very important aspect of the internal environment. Preparing an annual analysis in which each unit participates is a best practice. Each unit is both a provider and a consumer of services provided by other units. After examining and analyzing internal and external elements, a table (Table 1) can be created to ask further questions:
Table 1: Elements of SWOT HR analysis data interpretation.
SO
How can your strengths be utilized to maximize opportunities?
What possibilities can make strengths even more robust? ST
How can you utilize your strengths to repel threats? What dangers can strip a thing of its advantages?
WO
What characteristics can be utilized to enhance performance (remove flaws)?
How might weaknesses impede one from seizing opportunities? WT
What vulnerabilities impede you from confronting dangers effectively?
What risks can increase vulnerabilities?
By gathering the responses to the preceding questions, one might generate actionable options. After doing a SWOT analysis, an HR department task list is prepared. Consideration should also be given to the fact that, initially, it is not a detailed work plan that is created, but rather strategic work milestones whose adoption will elevate the HR department's work to a new level.
In the same vein, it should be highlighted that, regrettably, the majority of T&D managers (training and development managers) today arrange training based on requests from different departments. They either reply to department-specific requests or provide their own training plan based on prior experience or preferences. However, in both instances, staff training is reactive, and T&D serve as organizers to a higher extent. In certain circumstances, such a strategy may be justifiable, and the organizational role is a vital element of T&D, but a proactive approach to training allows for qualitatively distinct outcomes. PESTLE analysis is the first step towards a proactive HR approach. One of the milestones toward HR business partnership is when the personnel department becomes not only a service-providing department, but also a strategic business partner that has a direct impact on the organization's success. Below, we examine each factor in greater depth.
P (Political) – Political variables (stability of the government, tax policy, regulation of international trade, social policy). This section contains the subsequent questions: What impact do political changes have on business? Perhaps it will be important to prepare personnel for upcoming changes. How do you cook them? What actions must be taken today to ensure that these developments result in new opportunities in the near future? E (Economic) – Economic factors (GNP trends, sanctions, inflation, unemployment, global economic crisis). Which talents will be most in demand given the current economic climate? How can they be developed on a budget? S (Social) – Social factors (population demography, social mobility, income distribution, work and leisure traditions, level of education of the population). How do you train employees of varying ages? Which sort of training is best suited for those of generation X, and which for those of generation Y? T (Technological) — Technological elements (innovative developments, the speed of diffusion of new technologies, the proportion of obsolete technologies, government support for the development of new technologies). Which emerging technologies can be used for employee training? Describe e-learning. What types of training are interactive? The speed of data processing directly affects the company’s business performance. How to train employees to work with databases and software as quickly and efficiently