This article examines the implications of the resource-based view of the firm for the theory of strategic HRM. the resource-based view points to the sources of human resource advantage in building organisational capability. In this way, it helps us to identify the various ways in which HRM contributes to the strategic management of the firm. More work must be done, however, to relate resource-based concepts to important premises in employment relations theory. While our existing research base suggests that it will be possible to identify particular firms in any industry and economy which have built human resource advantage, the article argues that comparative research will continue to show important national differences which affect the competitiveness of firms.