What Is Strategic Human Resources Management? 5 Tips for Getting Started
Imagine your favorite sports team going into a game without discussing a cohesive strategy. Sure, they all know their common goal (to win) but trying to do so with multiple, potentially ideologically opposed, approaches is likely to prove counterproductive. It wouldn’t make sense. The same logic applies to running a company. You have a team working towards the same objective, and having everyone singing from the same hymn sheet is crucial to success. That’s why using a strategic HR approach is a good idea.
Strategic human resources management involves aligning the HR functions of a company with its long-term corporate objectives. It goes beyond administrative duties and daily communications with employees. Instead, strategic HR marries that position's traditional role with the organization's standards and practices.
While some HR personnel love maintaining administrative HR tasks—making sure everyone’s getting what they need on a basic level—others want to be involved in executive meetings and to contribute to the company’s business strategy.
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Why Is HR Strategy Important?
Strategic human resources management is important because its implementation is a significant contributor to the overall success of the organization.
A sound HR strategy acts as the glue that holds a company together, ensuring that all departments within a company are communicating and working together effectively. It does this by undertaking employee evaluations and establishing the steps they need to take to raise their value in the business.
8 Benefits of Strategic Human Resources Management
- Increased job fulfillment
- Improved working culture
- Better rates of customer satisfaction
- Efficient distribution of resources
- An engaging way to manage employees
- Enhanced productivity
- Bigger focus on corporate objectives
- Helpful leadership in executing strategic HR initiatives
How to Create an HR Strategy
Executives want human resources leaders who operate as strategic business partners.
Strategic HR is at its most beneficial when it aligns HR activities with organization-wide business goals.
A robust HR strategy begins with long-term analysis of both your company and the macro environment, then applies key findings to all areas of HR business operations.
For example, your strategic planning should answer questions such as:
- Where are we spending our time—and how can we optimize our operations?
- Do leaders trust us as a resource when difficult situations arise?
- Is our voice heard when executives are assessing future business plans?
- How are we attracting and retaining the top talent our business needs to thrive?
Keep in mind: The only constant in life is change, and that’s never more applicable than in a working environment. Typically, implementing strategic HR initiatives is a long-term plan. But that doesn’t mean it is set in stone. You should regularly evaluate and adapt with flexibility by updating your strategy to better fit the organization, as well as other external factors.
Here are five tips for how HR professionals can earn respect in their companies’ strategic activities:
1. Get Formal Training On Business Competencies
Before you can start contributing to an HR strategy, you need to understand how strategic business works. When you have training in areas like leveraging networks, data judgment, business acumen and leadership, you can give helpful suggestions. Business leaders depend on collaboration in developing their business strategies, and that’s where you can step in and show off what you know.
2. Know Your Company Inside And Out
Executives need to have colleagues on board when it comes to understanding how the business measures its success. As well as this, the finance strategy, and any potential risks need to be made clear.
Although the amount of time you’ve worked at an organization comes into it, you’re probably more aware of these factors than you may think. To dig even deeper, take some time experiencing work “on the front line” and ask questions about its history and products.
As a side note, focusing on these first two areas can triple an HR professional’s value to a company’s business strategy decision-makers.
3. Track and Report on Key HR Metrics
You’ll understand your workforce better if you:
- Develop your own system of revenue measurement
- Concentrate on worker attitudes.
- Bench strength.
- Identify KPIs.
By integrating these measures into business metrics and strategic HR, you’ll have an invaluable understanding of your people, as well as the vested interest of the leaders who are driving the business. Since most business leaders are using data to make business strategy decisions - you’ll put yourself in a great position.
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4. Create Data-Driven Strategies
It’s important to assess emerging trends and strategic HR management best practices, but the actions and policies of HR professionals should always be propelled by data. Data can drive practices that support emerging trends and develop into viable business opportunities. They may also reveal that current business and HR strategies more appropriately align with the organization’s goals.
5. Assess Organizational Readiness
No matter how thoughtful your strategy is, you'll need to cultivate organization-wide buy-in for it to succeed. We identified four key factors that will help your organization adopt your strategy.
Do: Combine business and HR metrics. By doing this you’ll be able to evaluate whether the organization has the resources, manpower and support to implement different strategies. According to researchers Edward E. Lawler and John W. Boudreau, HR professionals who regularly perform this activity are much more strategic and effective since the recommendations that come from this type of analysis bridge HR with the broader business goals and strategy. This is the essence of strategic human resources management.
Don’t: Neglect the basics. You know you’re capable of giving strategic insights and working with leaders in strategic areas, but don’t forget administrative responsibilities and compliance with rules, laws and regulations. If they’re not under control, the analytics and assessments you worked so hard to get noticed for will go unmanaged and could become a stumbling block. You must continue to innovate basic administration while providing strategic input to reach your full potential in HR.
Don’t: Make Strategic HR an intangible concept. The size and history of your company don’t matter. It’s possible to contribute to potential growth and achievement by concentrating on strategic HR initiatives.
Don’t: Forget administrative responsibilities and compliance with rules, laws and regulations. If they’re not under control, the analytics and assessments you worked so hard to get noticed will go unmanaged and could become a stumbling block. You must continue to innovate basic administration while providing strategic input to reach your full potential in HR.
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