Competitive Advantage Through HR Innovation

Race WEB

Despite great recognition for human resources (HR) as a source of value addition within firms, HR innovation remains poorly understood. Below, Upamali Amarakoon, Jay Weerawardena and Martie-Louise Verreynne explore how firms can gain competitive advantage through HR innovation.

Innovation has long been recognised as a source of competitive advantage1. Although human resource (HR) is considered the most valuable asset in today’s firms, how HR innovation enables firms to deliver superior performance remains an area of ambiguity. There is general consensus that competitive advantage built on human resource innovation is not easily imitable, and therefore vital to the sustainability of firm growth and competitiveness2. Yet, the primary focus of both practitioner and academic studies has been on technical (product and process) innovation with little attention paid to non-technical innovation such as HR innovation.

Non-technical innovation differs from technical innovation which means that the approaches adopted to capture the latter may not be adequate and appropriate to understand the complexities involved in HR innovation. HR innovation therefore warrants closer investigation. Our work in HR innovation suggests that some questions of practical interest worth answering are: What form does HR innovation take? What is the role of HR professionals in undertaking HR innovation? How do HR professionals create and utilise knowledge resources required for HR innovation? What is the role of line and top management in successful HR innovation? And, how does HR innovation enable firms to compete better? This article addresses these questions while exploring how firms can gain competitive advantage through HR innovation.

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