Strategic Human Resource Management

How to Implement Strategic Human Resource Management

To understand the concept of strategic human resource management, one must first grasp the meaning of human resource management.

Human resource management refers to the recruiting and hiring process intended to find the best employee for a position and provide them with training, benefits, compensation, and all the developmental tools they need to perform to their highest capacity in a business.

Human resources was primarily an administrative function at its inception. The duties of human resources were restricted to mundane tasks, such as ensuring new hires, taking care of salaries, and ensuring fundamental compliance.

Human resources in this day and age entail a wide range of responsibilities, including ensuring that the goals and actions of all the teams in a company complement and advance overall business strategies and work toward better business performance.

Strategic human resources management elevates this task by aligning it with organizational goals and the objectives of various departments of the company. HR departments further ensure that their mission, values, and objectives align with that of the business as a whole.

What is Strategic Human Resource Management

Strategic human resource management serves as the connection between the goals and strategies of a company and its human capital. The primary objectives of strategic human resource management include the following:

• Promoting innovation, flexibility, and competitive advantage
• Developing a purposeful company culture
• Optimizing business performance

Human resources must be highly involved in establishing and implementing company policies for strategic HR management to be constructive. Strategic human resource management can be implemented in various company activities, including hiring, rewarding, and training employees.

Strategic HR management involves considering how human resources can potentially make a direct impact on the growth and success of a company. When HR personnel adopts a strategic approach to elevating and retaining employees, they are more likely to achieve the long-term objectives of the company.

Many companies find it challenging to resolve issues regarding human resources, as there is a myriad of factors at play that don’t necessarily fall within the field of business owners’ expertise, causing them to make ineffective or misinformed decisions that may be detrimental to a company’s growth.

Why is Strategic Human Resources Management so Important?

When all the teams in a company are working toward the same goals, organizational success is more achievable. Strategic HR management involves analyzing employee performance and identifying the steps that need to be taken to increase the value of a company’s employees.

Strategic human resource management utilizes this analysis’ results to create and implement HR techniques that address the weaknesses of the company’s employees.

The primary benefits of Strategic human resource management include the following:

• It creates a better workplace culture
• It increases employee performance and productivity
• It promotes increased job satisfaction
• It promotes efficient resource management
• It improves the rate of customer satisfaction
• It implements a proactive approach to employee management

A strategic HR planning process results in a greater likelihood of achieving organizational success.

When an organization is viewed as a sports team, strategic HRM can be considered the team captain. All other departments in a business are equally crucial to achieving the end goal, but the human resource department is responsible for ensuring every player is equipped with all the tools and capabilities they need to win the game.

In this analogy, the captain (strategic human resource management) is the entity that ensures the appropriate leadership and practices (HR techniques) are implemented to recruit, train, reward, and compensate every player (employee) to ultimately result in a stronger, more motivated team.

To prevent any shortcomings in your human resource management strategy, follow the steps to effective strategic human resource management below and develop a strategic HR department.

7 Steps to Creating a Strategic HR Planning Process

Strategic human resource management is pivotal to retaining and developing a valuable workforce. Employees are more inclined to feel appreciated and dedicated to the company if the business invests in employee retention and involvement.

A sound strategic HR planning process must be created before you can implement strategic human resource management. The steps outlined below will guide you as to how you can create a strategic human resource planning process.

Step 1: Understand the Objectives of the Company

The success of any strategic HR plan depends on how it aligns with the company’s objectives. Therefore, you will need to have a comprehensive grasp of the objectives, aims, and missions of the business to create a reachable team goal.

You have to communicate the short and long-term objectives of the company’s growth to the HR personnel. Formulating a sound human resource management strategy will be highly facilitated if you can articulate the company’s objectives clearly and diligently.

Step 2: Assess the Capability of Your Human Resources

To understand the part employees play in achieving your goals, you need to evaluate the capabilities of your human resources. Moreover, it may be highly beneficial to create a skills inventory for each employee. A skills inventory will highlight which employees are considered experts in particular fields.

Evaluating the capacity and capabilities of your human resources will facilitate the identification of employees who might be interested in receiving comprehensive training in a specific field that will benefit the company.

A performance review is an excellent way of assessing the skills of your employees and gauging whether some employees might be better suited for other positions.

Step 3: Analyze Human Resource Capacity in Terms of Company Goals

Assessing the capacity of your human resources will facilitate the recognition of potential obstacles and the creation of an operational and strategic management plan to mitigate challenges and capitalize on opportunities optimally.

Senior managers will collaborate with strategic HR managers to analyze the relationship between the number of employees and the output they yield to equip all employees with the necessary tools and skills to better serve the company’s needs.

Step 4: Determine the Future Human Resources Requirements of the Company

Once you have analyzed the employees of the company and the skills they offer in relation to company goals, you must predict your future HR needs. This forecast must consider the following:

• HR Demand: Your prediction must consider the number of employees and skills required to meet the future needs of the company.
• HR Supply: Consider the number of employees and their associated skills currently available to the company and assess whether they are sufficient to achieve the company’s goals.

By establishing the future HR needs of the company, you will be able to determine the following:

• New roles and jobs you will need to create to secure the company’s future
• The skills your current employees will need to acquire to fulfill the responsibilities of newly-created roles and positions
• Whether the skills and expertise of your current employees are being utilized optimally
• Whether the company’s growth is accommodated by your current human resources department

Step 5: Determine What Your Employees Require to Fulfill their Responsibilities

HR personnel will need to collaborate with other departments to determine how employees utilize the tools at their disposal to perform their duties and how these tools impact their performance.

For instance, if your company makes use of hardware and software to execute daily operations, a comprehensive audit of these tools by HR professionals in collaboration with the IT Department may highlight particular shortcomings that diminish employee productivity.

Identifying elements that either promote or inhibit optimal productivity plays a significant role in creating a sound human resource strategy.

Step 6: Implement Strategic Human Resource Management

Once you have successfully analyzed and predicted the HR requirements of your company, you can start the process of growing your workforce and developing current employees to set your company on the path to success and expansion.

Follow the steps outlined below to implement a human resource management strategy successfully:

Recruitment

During the recruitment phase, HR professionals must find candidates who possess skills identified during the human resource strategic planning process.

Selection

Selection criteria, including interviews, become applicable during the phase of organized selection. HR professionals must ask prospective employees questions related to their expectations regarding responsibilities and salary. Appropriate tests can be used to facilitate the assessment of a candidate to determine whether they are suitable for the position.

Hiring Process

If a candidate meets the criteria of a job position, the company can present the candidate with a job offer.

Onboarding Process and Training

The onboarding process of new employees is a primary determining factor as to whether they will remain with the company or not. A comprehensive training and onboarding package is essential to optimizing employee retention. It is one thing to successfully onboard an employee, but retaining them is another subject.

Employee engagement is arguably the most important factor in retaining employees and ensuring employee satisfaction. Employee training is a necessary means of promoting employee engagement by investing in the professional growth and development of each individual, effectively assuring them of their value in the company.

Step 7: Assessment and Corrective Action

The human resources department of the company must agree on a timeline to execute a strategic HR management review.

A thorough review of strategic HR management will highlight the progress that has been made and identify areas that need more attention. This review must consider whether the alterations made promote the company’s growth.

If strategic human resource management is not effectively reaching its goals, corrective action must be executed.

Strategic Human Resource Services

Strategic human resource management is critical for any business strategy and future success. If employing additional employees to reach your business goals seems undesirable, effective strategic human resource management can go a long way in growing your business without necessarily expanding your workforce.

If your HR departments feel unequipped to create an efficient HR strategy, you may want to consider partaking in human resource management courses or hiring a third party to facilitate human resource management in your company.

If a company doesn’t possess an in-house HR function, they often outsource this task to other businesses that do. Professional strategic human resource services offer all-encompassing HR functions, including creating an effective HR strategy.

Strategic HR services alleviate the weight of ensuring efficient operational and strategic management to improve business performance with practical HR strategies.

Relationship Between Strategic Human Resource Management and Business Strategy

Employees are often referred to as the most important asset of a business, and for a good reason. Human capital is essential to sustaining the value creation of a company by implementing a practical business strategy.

Employees are the driving force that helps an organization achieve its objectives, which ultimately raises the value of the business in the interest of various stakeholders. The knowledge, skills, and capabilities of employees are assets that the company must invest in as a means of facilitating its business strategy.

Furthermore, a business’ HR strategies largely shape the overall business strategy. For instance, if improving customer service is a business strategy, effective training plans and performance management are HR strategies used to further the success of the business.

Strategic HRM should not be viewed as a successor of a business strategy but rather as a collaborative tool. The nature of the training and motivation of employee knowledge and skills should correspond to and advance the business strategy. Many businesses have unlocked the secret to success by incorporating and linking strategic HRM to their business strategy, effectively defining the management of the organization’s resources.

Therefore, strategic HRM involves more than just managing people. HR leaders are part of a greater strategy to ensure tremendous value in the business and create an organizational design that supports the business’s success.