Do you believe that people are the only means of sustainable competitive advantage?

Before answering, sustainable means a competitive advantage that is long-term, hard-to-replicate, in terms of assets and\or capabilities, allowing a company to consistently outperform competitors. In a recent McKinsey Global survey (January 30, 2026), companies that are top economic performers, are much more likely to try to understand, validate, and use their competitive advantage in their decision-making. For HR, people; their knowledge, skills, commitment and motivation, are critical to outperforming the competitors over time. If you are affirmative to the above question and can prove it, then you will have a Sustainable HR function.

The problem is HR professionals don’t always know how HR can contribute to achieving competitive advantage. The function is not helped by some managers who, disparagingly, think HR is easy and just focused on administration or being the ‘policeman’ for the company. Unfortunately, in many cases, HR is and continues to be, doing just that.

Challenge your Mental Model of HR

HR professionals need to change their mental model\perspective of HR. Rather than looking at HR as a support function, HR professionals need to show how, through long term development and support of people, to achieve, the employee’s personal goals, while helping the company’s business performance.

In my experience of training HR professionals, when you present them with a business problem, they come at it from a purely HR\people perspective. What is needed is a business solution that, among other things, provides people systems or perspectives that will add real business value. HR people need to think more out of the box and initially from the perspective of the business first. This will mean taking HR professionals out of its comfort zone and they will need help and support to initially do this.

We all know that managements views of HR are that it’s too administrative and not always strategically aligned to the business. The function also struggles to show business impact, it’s generally reactive, resulting in gaps on skills and manpower and it tends to shy away from showing leadership.

HR needs to understand how to use business skills and techniques to develop people solutions. While training by the big HR institutions now covers business acumen, there is limited exposure to practical help, templates and techniques that will bridge this gap. HR training is still generally focused on functional skills, rather than showing how to provide people solutions within a business context, in terms of potential financial and business impact.

Sustainable HR is about helping HR professionals to understand that there are now numerous stakeholders, that solutions need to be long term and that they need to show the financial and business impact of key HR actions and initiatives. HR needs to be thinking as much about investment and returns, as they are in designing policies and procedures in what HR delivers.

Sustainable HR Leadership

In simple terms this involves:

- Understanding the business, how it makes money and adds value. This means getting out into the business and understand the needs of the various Directors and senior management, from their functional perspective.

- Understanding there are multiple stakeholders, both internal and external, that you need to address and as such the focus should be on long term solutions, rather than a quick fix.

- Being comfortable with the financials, sufficiently to ask questions and to look for patterns of cost, revenue and profit of certain activities, but not losing sight of ethical and fair HR practices. In doing so, it’s easier to build the business case for HR, ideally showing potential bottom line impact.

- Build a healthy culture, with a balance of performance and wellbeing for all employees and develop leaders who can themselves develop future leaders.

- Providing learning and development opportunities to upskill and reskill employees, looking to measure how improves productivity.

- Getting the basics right so you can attract and retain the skilled employees that will ensure you have competitive advantage.

- Building your communication and influencing skills, to understand the needs of the key decision makers and provide solutions that will resonate with them. In particular, balance the typical drive to reduce costs with the likely impact on people going the ‘extra mile’ to deliver performance. Also, effectively manage the politics and recognise what battles to fight.

- Reduce the use of ‘HR jargon’ and work on communicating your solutions from both a business and people perspective, talking the language that will resonate with management.

Consistently building on these points will grow your credibility and confidence with senior management and there is a good chance that they will want you and HR to be at the top table. HR needs to be sustainable over time and to deliver this HR professionals need to change their ‘mental model’ of what HR does and delivers.

Going back to our original question, if you want to be a Sustainable HR function you need to understand, validate, and use the competitive advantage of people for the benefit of employees and company performance.

If you want to learn and experience how to develop a Sustainable HR function and grow your career, why not get in touch with Informa Connect to explore the Certificate of Sustainable HR programme being run through a number of modules during 2026.