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Strategic Human Resource
Management 101: HR’s Guide

An infographic showing the five pillars of Strategic Human Resource management.
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Hacking HR Team
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Posted on June 28, 2024

The role of Human Resources is constantly changing, especially in the world of remote and hybrid work. HR has the tough job of bridging what an organization needs to be successful and accomplish goals with what employees need to push the organization toward those goals. All the while, HR must deal with the roadblocks that get in the way of building a thriving organization.

It’s HR’s job to create a workforce that’s resilient and future-proof to handle anything that comes your way. But doing that isn’t always an easy job. 

That’s where strategic human resource management (SHRM) comes in. We’ll dive into everything an HR professional needs to shift their strategy to keep the workforce agile and resilient, no matter what the future holds, and keep everyone working towards the organization’s shared goals. 

What is strategic HR management?

First things first: What exactly is strategic human resource management? It’s an approach to HR that differs from a traditional HR strategy by focusing on aligning HR’s practices with the goals and objectives of the larger organization. 

Simply put, SHRM makes sure that HR’s goals are aligned with the goals of the business to make sure everyone is working toward the same shared objective, acting as a bridge between HR and the organization as a whole.

The goal of strategic human resource management is to create a more effective, more efficient, and more aligned workforce by implementing policies and procedures that are aligned with an organization’s business strategy, instead of having disconnected processes and policies that aren’t doing anything to further business objectives.

SHRM is an alternative to a traditional approach to HR. While traditional HR may focus on administrative duties and the day-to-day managing of employees, SHRM takes a more focused approach to HR and helps turn HR departments into business partners who are working toward the end goals of a business. Instead of just working toward a functioning and efficient workforce, a strategic human resources approach may instead focus on how employees’ daily tasks and projects can help push the organization towards its overall goals. 

Taking a proactive approach to HR strategy doesn’t just magically happen, though. The process of shifting your HR strategy to be integrated with organizational goals takes time and effort to identify long-term goals and shift HR practices to align with those goals. 

The first thing that you’ll need to do is understand the core concepts of a strategic approach to human resources:

  • Business strategy alignment: Integrating and aligning HR’s role with the business’s overall strategy is the heart of a SHRM approach. Integration of HR practices with a business’s overall goals ensures that each day, the organization is working towards its end goals and practices between HR, employees, and leaders are not disconnected from one another.

  • Performance management: Performance management is a big part of HR’s role, and needs to be adapted to integrate with larger organizational goals. Clear objectives and expectations for employees’ performance should be established and should align with organizational culture and goals, including regular feedback (not just annual performance reviews) and resources to develop and nurture employee performance.

  • Data-driven decision-making: Decision-making and strategic planning is one of the core elements of strategic human resources management. All elements of strategic planning – including succession planning, talent acquisition development, and workforce planning – should be aligned with greater organizational goals and growth. Decision-making should be informed by data and analytics to help predict and prepare for future outcomes. Data-driven decision-making can also ensure that HR practices are optimized for the best outcomes.

  • Talent management: Attracting, developing, and retaining talent is key for any HR department, but it can be especially crucial in a SHRM approach. The business’s larger goals and initiatives should be factored into decisions about talent acquisition and pipeline development. SHRM also prioritizes continuous learning and development for existing employees to further align with organizational goals.

  • Organizational culture: Cultural alignment is a big part of making sure that a strategic human resource management approach is effective. If individual employees are aligned with the larger organizational culture – including its mission, values and objectives – it will be easier to work toward shared goals.

  • Change management: Change management is essential to creating an HR strategy that will survive future changes and keep everyone aligned during periods of change so that the company can continue thriving. It’s up to HR to make sure that employees and the overall organization are adaptable and ready for whatever’s to come.

An infographic with the 5 pillars of Strategic Human Resource Management (HRM).

Benefits and challenges of strategic HR management

The overall goal of strategic human resource management is to foster organizational effectiveness and offer a competitive advantage against competing organizations. When an organization is aligned throughout the entire workforce, it can create a more effective and more resilient team. This can come with several benefits to the organization, but shifting to a more strategic approach to HR also poses some challenges that must be overcome.

Here are some of the biggest benefits that can come from a strategic HR management approach:

  • Promotes organizational alignment: Perhaps the biggest benefit of strategic human resources management is that it helps align everyone in the organization with the great goals and values of the organization itself, which can help keep everyone on the same page and help create value for employees and leaders. 

  • Improves employee performance: HR practices and processes that are aligned with overall goals can encourage employees to do their best work. Employees know the greater goals they’re working toward and know they have a part in getting there. The organizational alignment promotes all categories of performance, including productivity, engagement, and commitment to the organization.

  • Reduces turnover and boosts retention: Strategic HR management emphasizes attracting and retaining employees who are aligned with the organization’s overall goals, which can have a hand in boosting retention. The SHRM approach also prioritizes employee development, which can also have a positive effect on retention and reduce turnover.

  • Creates a cost-efficient strategy: SHRM focuses on optimizing HR operations, which can help reduce costs across the organization. For example, a more honed-in recruitment strategy that’s aligned with organizational goals can ensure that new hires are a good fit for the organization and reduce turnover costs. SHRM’s emphasis on employee development can ensure that optimal training investments are made, and resources are not wasted.

  • Improves adaptability and change management: Change management is a must for organizational resilience, and the adoption of strategic HR management can help foster adaptability and improve change management when the time comes.

  • Creates a positive culture: Aligning your workforce with the strategic needs of the business simply creates a more positive culture, as employees can feel more motivated and more engaged with the organization’s goals. 

Challenges of SHRM

There are also some challenges that HR professionals may face when trying to implement a strategic management approach. Luckily, they’re all simply roadblocks that can be overcome with some strategic planning and management. Here are the challenges you may face from a strategic human resource management approach, and how to address them.

  • Employee resistance: At first, employees may be more resistant to change from what they know a “traditional” HR approach to be. This is normal but can cause some back-up to an implementation plan, as resistant employees may not be as willing to adapt to these changes. Tip: Give employees all the resources and information they need on why and how this approach is being implemented, which may help them better understand more and therefore be more open to change. 

  • Resource limitations: HR professionals could do wonders if they had a limitless budget – but that’s not usually the case. In fact, HR’s budget and resources are usually already stretched thin, which can make it hard to implement and optimize a strategic approach. Tip: Understanding your limitations before beginning to plan can help create a strategic approach that can be rolled out gradually to accommodate to the amount of resources available.

  • Integration roadblocks: Aligning organizational needs across the company can be complex and difficult, as HR must make sure each team is aligned with the greater mission and goals, which can easily turn into chaos. Tip: Don’t try to do everything at once. Instead, implement elements of a strategic human resources management approach gradually, to address roadblocks as they come up.

  • Measuring results: Like many other HR practices, measuring effectiveness can be tough, especially when it comes to organization-wide performance and sentiments.  Tip: Set benchmarks based on industry standards and record meaningful metrics before you begin implementing a strategic approach to help compare metrics later on.

  • Sustaining engagement: Between organizational change and strategy shifts, it can be hard to sustain high levels of employee engagement. Tip: Build engagement initiatives into your strategy to account for engagement dips, like frequent communication and recognition efforts.

An infographic showing the steps for a Strategic Human Resource Management (HRM) Roadmap .

HR’s strategic action plan

There are a lot of roadblocks and challenges that may get in the way when you switch to a strategic approach to HR management, but one thing that can help is creating and sticking to an action plan. Here are some essential steps to create a fool-proof SHRM roadmap. 

1. Define organizational goals and objectives

To align HR practices with organizational goals, you first have to define what those goals and objectives actually are. Ensure that goals are organizational and not just individual. 

To find out your organization’s goals and objectives, consider the following actions:

  • Talk to those at the heart of the organization, not just the C-suite; ask middle managers, individual contributors, and supervisors about what they think the organization is trying to work toward. 

  • Look at past decisions made by the organization and past employee data about how well the organization has been aligned with its perceived objectives in the past.

  • Compare objectives with the organizational decisions currently being made to ensure they are aligned.  

2. Think into the future

One of the most important elements of strategic human resource management is ensuring that the strategy will last in the face of organizational and market change. Because of that, it’s essential to consider what your organization will need to stay resilient in the future. 

To future-proof your strategy, consider these steps:

  • Look at market predictions to consider possible future scenarios

  • Create policies and practices that aren’t rigid and can be adapted to fit changing needs

  • Emphasize the importance of organizational resilience in your company culture

3. Get your finger on the pulse

For any strategy plan, it’s essential to figure out what your organization looks like presently to help connect it to what you want it to look like. Get a feel for the general employee sentiment and the organizational restrictions that exist, such as lack of resources or budget, to help develop a starting place to build your strategy.

To do this, HR professionals can: 

  • Look at past employee surveys or feedback 

  • Do a sentiment analysis

  • Analyze existing data, such as turnover rate or performance metrics

4. Break it down 

Changing everything at once will almost certainly create employee resistance and cause chaos across the organization. Especially if your strategic management approach is vastly different than your current strategy, it can be helpful to break the strategy components down into smaller chunks to implement over time. 

Here are some ways to make the shift less dramatic and maintain stability within the organization:

  • Communicate often with employees about changes that will be made, and explain the “why” behind the decision

  • Prepare managers well in advance about important changes, such as a new performance review process

  • Build in an “adjustment period” as big changes are being made, and offer more support or resources during that time

Best practices and tips for a SHRM approach

No two strategic human resource management plans are the same because a successful approach is uniquely tailored to the specific needs of your workforce. However, there are some general tips and best practices that HR professionals can utilize. 

  • Adopt HR tech and software that can reduce the administrative tasks that come with a traditional HR approach

  • Continually assess outside factors, such as sociopolitical factors or market changes

  • Measure results and pivot when necessary according to metrics and employee feedback

  • Be transparent with employees about why changes are being made and what these changes hope to accomplish

  • Stay proactive by encouraging feedback from employees about what they like or don’t like about the new approach

Conclusion

Strategic human resource management can help align HR departments with the larger goals of their organization. A strategic approach can help situate HR as an effective business partner and help drive the organization forward. 

There is no “one size fits all” to a SHRM approach, so it’s essential that HR takes a holistic look at the workforce and adapts the approach for the organization’s unique needs. This will help future-proof the organization and foster a resilient workforce.


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