Current Approaches to HR Strategies: Inside-Out Versus Outside-In

Abstract

The article focuses on approaches to make HR strategy more business-relevant. It differentiates between inside-out strategies and the far more effective outside-in strategies. It is about business-driven HR strategies, not about HR functions in search of relevance. The key business issues requiring an HR strategy are retention, growth and globalization. The key HR strategies developed in response related to performance, leadership, talent and HR systems. The article points to moving up the value chain from HR metrics to people metrics to business outcomes, but with that comes both less control and more accountability. The authors conducted interviews with HR executives from 20 companies who are knowledgeable about their HR strategies and gathered archival materials. The article concluded that the content, process, and evaluation of the HR strategies can each be classified as focusing primarily on the HR function, the people of the firm, or the business. It provide some examples of ways firms can move from an HR-focused to a business-focused HR strategy.