What Is Strategic Human Resource Management?
Strategic human resource management, often coined as SHRM or even referred to as ‘People Strategy,’ is the framework an HR puts forth to attract, manage, develop, and retain employees to meet an organization’s long-term business goals. Essentially, SHRM views and positions HR as a strategic partner and supporter of any business.
A huge part of this is often referred to as strategic human resources planning. Think of it as akin to workforce planning, except where specifically an HR team sits down and hashes out what they need, and what targets they need to hit, with the resources they have, to match the business’ ultimate goals.
In short, strategic human resource management typically exerts influence on:
Employer branding, talent attraction, and hiring plans
Day-to-day management and employee data changes
Performance cycles as well as learning and development () programs
Retention measures, employee benefits, and fringe benefits
Organizational culture and change management processes
There is no single way to look at SHRM. Instead, it’s really about positioning an HR team as having a distinct influence over a business’s long-term success. Further to that, planning and allocating resources to exert that influence in the best ways possible.
Is There A Difference Between HRM And Strategic HRM?
The key difference is having a competitive advantage. Some may characterize HRM as HR teams keeping pace with an organization, whereas SHRM means strategically setting the pace of an organization through alignment with long-term goals.
At its core, though, the difference between HRM and SHRM is about prominence in the business. Strategic human resource management guarantees a spot at the table of senior leadership, as well as a voice, for HR and for the development of an organization’s people.
So, when a business finds and decides that people should be a priority, it is almost a natural evolution to go from human resource management to strategic human resource management.
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What Drives Strategic Human Resource Management?
Put simply, people drive SHRM in so many ways. That’s because, as businesses recognize that people are their greatest asset, they begin to understand the additional need that people need to be satisfied in their roles and their organization to produce their best work.
So, the guiding principle of strategic human resource management is simple: keep your employees happy and watch your business flourish. And, as part of that equation, HR needs a spot at the table as the department most often tasked with managing and developing people.
That said, SHRM is a bit of a paradigm shift. In times past, business planning or goals may have influenced individual HR strategies that take place in an organization. Think of something like a push to hire a specific role or introducing a private insurance plan for employees.
While this is one way of doing things, it’s more that business strategy drove or wholly defined HR strategies. SHRM shifts things by suggesting that there needs to be two concurrent strategies: a business strategy and an HR strategy, aligned with one another and with strategies dictated by each.
What’s The Link Between SHRM And Workforce Planning?
To the above point, the relationship between SHRM and workforce planning is that the latter is often concerned with putting the plan into place. Matching the future needs of the organization with current resources, whereas SHRM takes a step back and understands where that process comes from, the demands on that process, and how it ultimately satisfies the workforce (rather than simply changing it).
What Role Does HR Analytics Play In SHRM?
Access to HR analytics, across your entire workforce, is an essential pillar of strategic human resource management. It affords HR teams the data they need to derive real insights to make decisions that power the business. It is a key reason why people analytics has become such a critical topic in recent years.
The Key Benefits Of Strategic Human Resource Management
A business and organization that embraces strategic human resource management is gaining access to some amazing benefits. The key ones include:
Future-Proof Planning – Embracing SHRM means staying on top of all your planning needs in line with your business. That means keeping an eye on where things are going, planning around them, and negating any nasty surprises that may come up along the way.
An Improve Corporate Culture – Empowering your HR function can have a host of trickle-down effects, one of which is an improved corporate culture. It shows that your organization is serious about its people, and can promote a culture of transparency, feedback, and employee wellness.
A Boost To Employee Performance – When HR is afforded a seat at the table, they can implement ways to make performance reviews, cycles, and learning and development opportunities (like development budgets per employee) more accessible, effective, and sustainable. Everyone gets better at what they do!
Higher Retention Rates – Employees who feel like they are the centrepiece of their organization are more likely to stick around. SHRM allows your HR function to focus on its people, and to create programs attuned to their current and future needs. That way, you keep your highest performers happy.
Effective Resource Management – When you let HR in on resource planning for your organization, it creates a more nuanced and effective planning process. HR is able to plan with what your organization has, what you need, and how your people can get you there. Saving time, money, and improving results.
Stronger Employer Brand – A culture focused on its people will become better at attracting people. Especially in a time when talent is in high demand, you want to make sure that your current employees are your greatest ambassadors. SHRM can help boost your employer brand.
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How Do You Implement SHRM?
If you’re an organization looking to implement strategic human resource management, first you need to make the case to management that you belong at the table. This can be done through data, through persuasion, or simply by understanding what it’s costing organizations doing nothing about it.
Next, there are some steps an HR department can take to really get things going:
|Understand The Business & Vision||Your HR team needs an incredibly clear picture of where the business wants to go and the overall vision guiding that plan.|
|Identify Key Data Points and KPIs||Boosting data literacy across your HR function is imperative for SHRM to get off the ground. Identify which data matters and educate your team on why.|
|Assess Your Org (Both HR & Overall)||Strategic human resource management is kind of like a doctor-patient relationship. Assess the health and wellness of both your HR function and your org more generally.|
|Estimate Current & Future Needs Versus Resources||What do you have on hand and what will you need in the future? Amazing SHRM relies on looking into that ‘crystal ball,’ so start looking ahead!|
|Take A Long Look At Your Applications||Which applications are you using to manage your people processes, and are employees satisfied? Think about how to combine the tools you use to make life easier.|
|Evaluate, Learn, and Iterate||SHRM is not a one-time process. Much like any business, it takes time and it takes multiple bites at the apple. An HR function that is constantly trying and learning is what you need.|
A truly tangible place to start is by working within your HR function, and business overall, to craft a people strategy. It can serve as your roadmap to making SHRM a reality.
Which HR Programs Should You Start Focusing On?
Strategic human resource management will typically flounder without focus. If you have a people strategy to guide you, that’s a start, but you may also need to think about specific initiatives and programs that you want to undertake to make it a reality.
Many organizations will begin with their recruitment strategy, which is where SHRM can shine by focusing on:
Resources and hiring plans
Selection and sourcing processes
Interview structure and candidate experience
Potential automation in the process
Time-to-hire and other recruiting KPIs
This is just the beginning, other areas of focus for many HR teams may also include:
Onboarding – Where an HR function can focus on how an employee gets started at work, how productive they are from day one, and how connected they feel to a company’s culture.(Video) Strategic HRM A Quick Guide
L&D – Introducing programs that help match skill gaps in an organization, or focus on developing leaders in an organization that is scaling quickly.
Policies – Thinking about ways to strategically add, edit, or remove policies and how to introduce them to the organization on a wider scale (hybrid work, for instance).
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Are There Limits To Strategic Human Resource Management?
The drawback of SHRM is often defined as the time it takes to get these initiatives off the ground, and how HR teams are often hounded with a thousand other smaller tasks that keep them from focusing on aligning their goals with the overall business strategy.
While that might be true, it is not an unsolvable equation. If HR teams can gain time back to focus on strategic topics, and even rethink the way they structure their department or org design in general, they can unlock the time they need back to focus on strategic HR.
One of the ways to do this is through an HR software. One that can save time, manage data securely, and even automate people processes across the business. This not only saves time but allows HR to rise up alongside the business, due to increased visibility and responsibility.
And, ultimately, that paves the way for making SHRM not only a possibility but an inevitability for ambitious HR teams who see their role as being at the table of senior leadership.
- Assess your current workforce. ...
- Create employee development plans. ...
- Create a succession plan. ...
- Perform a gap analysis. ...
- Decide how to increase resources for the future.
5 Ps of Strategic Human Resource Management they are Philosophy, Policies, Programme, Practices and Processes all are described in detail.What is strategic HRM PDF? ›
Strategic human resource management is the process of linking the human resource function with the strategic objectives of the organization in order to improve performance.What are the 7 functions of HR SHRM? ›
- Recruitment and Hiring.
- Training and Development.
- Employer-Employee Relations.
- Maintain Company Culture.
- Manage Employee Benefits.
- Create a Safe Work Environment.
- Handle Disciplinary Actions.
- Recruitment & selection.
- Performance management.
- Learning & development.
- Succession planning.
- Compensation and benefits.
- Human Resources Information Systems.
- HR data and analytics.
(1984)., there are three management levels- strategic (long-term), management (medium-term), and operational (short-term), and HR functions performed at the strategic management level are SHRM.What is the 5 component strategy? ›
These five elements of strategy include Arenas, Differentiators, Vehicles, Staging, and Economic Logic. This model was developed by strategy researchers, Donald Hambrick and James Fredrickson.What are the 5 main areas of HRM? ›
Human Resources manages 5 main duties: talent management, compensation and employee benefits, training and development, compliance, and workplace safety.What is strategic HRM example? ›
Human resource managers who act strategically develop and lead long-term programs that help ensure an organization's continued growth. When successful, these efforts can drive profits. One example is Google, known for its innovative employee programs that foster a culture of innovation.What are the 10 C's of HRM? ›
The ten "Cs" of human resources management are: cost effectiveness, competitive, coherence, credibility, communication, creativity, competitive advantage, competence, change, and commitment. The ten "Cs" framework was developed by Alan Price in his book "Human Resource Management in a Business Context".
Strategic human resource management is the connection between a company's human resources and its strategies, objectives, and goals. The aim of strategic human resource management is to: Advance flexibility, innovation, and competitive advantage. Develop a fit for purpose organizational culture.What are strategic HR goals? ›
Strategic HR goals are specific, measurable outcomes that an organisation sets to improve their practices. This goal-setting practice is one of the key components involved in achieving a successful business plan because it helps determine how well you're meeting your overall organisational mission.What is the difference between HRM and strategic HRM? ›
A strategic HR manager is focused on forming a long-term strategy. For example, when they are looking to hire for a position, they are considering future growth projections and goals of the company. While traditional HR managers work reactively, strategic HR managers work proactively.What are the six main elements of HRM? ›
Tip. The six main function of HR are recruitment, workplace safety, employee relations, compensation planning, labor law compliance and training.What are the 4 types of HR? ›
- Recruitment and Selection. Human resource management jobs include professional recruiters who filll vacancies within an organization. ...
- Compensation and Benefits. ...
- Health and Safety. ...
- Labor and Employee Relations. ...
- Training and Development. ...
- Risk Management. ...
- Managers and Directors.
- Relationship management.
- Business acumen.
Here are the 7 basic elements of a strategic plan: vision, mission, SWOT analysis, core values, goals, objectives, and action plans.What the are 3 C's of a strategic action? ›
This method has you focusing your analysis on the 3C's or strategic triangle: the customers, the competitors and the corporation. By analyzing these three elements, you will be able to find the key success factor (KSF) and create a viable marketing strategy.What are the three pillars of strategy? ›
- Customers. Everything starts and ends with your customer. ...
- Intent. You need to understand the intent of the business. ...
- Constraints. This is the one some people only address as part of an operational plan.
- Recruiting and staffing employees.
- Employee benefits.
- Employee compensation.
- Employee and labor relations.
- Human resources compliance.
- Organizational structure.
- Human resources information and payroll.
- Employee training and development.
Especially, HRM objectives are 4 fold: societal, organisational, functional, and personal.What are the 7 steps of strategic management process? ›
- Step 1: Environmental Scan. ...
- Step 2: Internal Analysis. ...
- Step 3: Strategic Direction. ...
- Step 4: Develop Goals and Objectives. ...
- Step 5: Define Metrics, Set Timelines, and Track Progress. ...
- Step 6: Write and Publish a Strategic Plan. ...
- Step 7: Plan for Implementation and the Future.
- There is an explicit linkage between HR policy and practices and overall organizational strategic aims and the organizational environment.
- There is some organizing schema linking individual HR interventions so that they are mutually supportive.
SHRM is used to create a framework that links the management of people and the development of practices that align with the long-term goals. SHRM differs from HRM in the sense that it is involved in framing human resource strategies so that they direct the efforts of the employees to align with the organizational goal.Who is responsible for strategic HR planning? ›
The HR Role is to take the full responsibility for the alignment of employees' skills and competencies with the strategic plan. First, HR has to demonstrate that it is the respectful business partner for the strategic planning. HR has to take the full responsibility for connecting people, ideas and tools together.What are the 5 model of strategic management? ›
The five stages of the process are goal-setting, analysis, strategy formation, strategy implementation and strategy monitoring.What are the 5 main areas of HR? ›
Human Resources manages 5 main duties: talent management, compensation and employee benefits, training and development, compliance, and workplace safety.What are the 9 key terms in strategic management? ›
Before we further discuss strategic management, we should define nine key terms: competitive advantage, strategists, vision and mission statements, external opportunities and threats, internal strengths and weaknesses, long-term objectives, strategies, annual objectives, and policies.What are the 3 stages of strategic management? ›
The strategic-management process consists of three stages: strategy formulation, strategy implementation, and strategy evaluation.What are the six 6 strategic management process? ›
Read ahead to learn more about the six vital elements of strategic planning: vision, mission, objectives, strategy, approach, and tactics.
- Onboarding and Foundations. Onboarding includes not just recruiting and selecting the best of the best; but ensures a successful integration into the social and performance aspects of the job and business as a whole quickly and smoothly. ...
- Growth and Empowerment. ...
- Offboarding and Exiting.