Even just a decade ago Human Resource Management (HRM) was all about hiring and managing employees but now it is integrated with a company’s strategies, objectives, and goals. Therefore, HR professionals have more scopes to work and contribute significantly to the company’s growth. In companies nowadays, maintaining a proper employee management plan is significantly essential. Following and keeping the strategic HR management process in place can surely make the resource management system of a company more robust than ever.
In this article, we will explain what HR strategic management is, and why you need to implement a strategic HR management process in your business. We’ll also discuss the key steps to creating a strategic HR management plan for better organizational performance. Let’s find out first what strategic human resource management means in the first place.
What Is Strategic Human Resource Management (SHRM)?
Human Resource Management refers to the management of people within an organization that comprises job designing, hiring, employee retention, compensation and benefits management, performance evaluation, and more.
“The word ‘strategy’ was first associated with the term ‘human resource management’ during the 1980s.”
Strategic HR Management adds a new dimension to traditional HRM practices. It connects company strategies with other HR activities of the organization. It makes sure that all employees are working to achieve the same goals by taking care of the following things.
- Job satisfaction
- Empathetic work culture
- Customer satisfaction
- Efficient resource management
- Strategic approach to employee management
- Productivity enhancement activities
- Employee retention and engagement, and more.
Simply put, strategic HR management is a framework that links people management to business strategies. All these strategies align with the long-term goals and outcomes of the organization.
Importance of Strategic Human Resource Management
Strategic HRM mainly focuses on a company’s growth and sustainability. It positively impacts a business and helps the organization reach broader goals and objectives. Check the following list to know how SHRM affects a business and how important it is for an organization.
The employees can perform to their full capabilities only when they develop the required skills. Analyzing the needs of the employees and providing training and learning opportunities for them is a great way to increase their productivity. SHRM prepares the employees for the challenges they face when working to fulfill your company’s mission.
Increase Employee Retention
SHRM encourages employees to engage themselves in company culture and build a sense of ownership for the company. It, eventually, enhances employees’ level of interest to work at the organization and reduces the turnover rate.
Besides, strategic HR management ensures all employees are receiving exciting perks and benefits. It also introduces provident funds, gratuity, and other long-term benefits for the employees. Thus, SHRM gives employees reasons to continue working for an organization.
Streamline the Workflow
Strategic HR management professionals collaborate with the company executives to streamline the work process and develop a transparent KPI measurement system. From employee onboarding to building a training plan for them, strategic HR management covers all aspects of employee hiring and development to keep the organization running smoothly.
Let’s sum up the benefits of having SHRM at the core of your organization. SHRM is important within an organization because it helps a business in the following ways.
- It ensures there’s no shortage of talent in the organization
- SHRM keeps the company’s policies perfectly aligned with government laws and regulations
- It predicts the need for the workforce required to cope with the changing market
- It adopts an agile mindset for the HR department
- SHRM aims at achieving both long-term and short-term goals
- It keeps the employee aware of the new changes in technology and trends
- Strategic human resource management motivates employees to work happily to achieve organizational goals
- It addresses critical issues timely and helps the management solve them efficiently
- SHRM helps identify barriers that affect the business negatively
The Challenges Of Strategic Human Resource Management
It’s not easy to implement strategic human resource management processes within an organization. You will surely face a few significant challenges when creating a Strategic HR Management plan for your company. Keep reading the following section to know the major challenges.
Failing to maintain a competitive advantage
- As soon as you offer something unique for your employees, your competitors will also replicate that idea within their organization. For example, if you introduce a Parental Bonus for your employees, chances are high that other companies of the same niche will do the same. Thus, it becomes difficult to stay ahead of the competition.
Reinforcing the same strategy for all business units
- Top management is less likely to express their business model and the organization’s overall business strategy. This often works as an obstacle for the HR department to craft an overall HR strategy that fits all business units. Moreover, HR strategies seldom support the organization’s goal directly. So, there might be disagreements among different departments about how strategic HR management can contribute to the growth of the company.
Formulating unique HR strategies for the organization
- You need to create a brand new strategic plan for your organization. Each organization is different from the other in terms of history, culture, technology, leadership style, philosophy, and more. HR strategies that aren’t tailored to the needs of a specific company may fail in the long run. You need to develop unique HR strategies aligned with the mission and vision of the company.
Getting enough support from the managers
- No matter how well the HR professionals prepare business strategies, they will fail to achieve their goals unless the top management including executives, line managers, and other heads of departments cooperate with them. HR professionals have to work closely with other departments to secure their trust and commitment.
Being open to accommodating changes
- An HR strategy that seemed effective at the initial stage may be proven irrelevant later on. Keep the HR strategic plans flexible so that they can accommodate changes when needed. Make sure your HR strategies can respond quickly to surprising changes in the working environment.
Actualizing the plans within the organization:
- Building strategies and implementing them, in reality, are two different things. Here lies the most crucial challenge of strategic human resource management. You will obviously find it difficult to make reality of your plans. The organization as a whole need to make all-out efforts to actualize the strategic HR plans within the organizational environment.
Key Steps to Creating a Strategic HR Management Process
Yes, there are real challenges in the ways of creating a strategic HR management process. But, with proper guidelines, you’ll be able to come up with effective strategies that can contribute to the long-term success of your company. Here are the most important steps to creating a strategic HR management process that can translate into measurable achievements.
1. Determine Your Company’s Objectives
Since SHRM focuses on achieving the company’s long-term and short-term goals, you need to know what are the goals at first. The success of strategic human resource management depends on how well it is linked to the company’s aims, objectives, mission, vision, and philosophy. Once the HR personnel has a clear understanding of the needs of the company, it becomes easier to create strategies in accordance with that.
2. Analyze Your HR Capabilities
Now you know your business goals. But do you have enough quality workforce to attain the expected performance? Analyze the traits of your current employees. Find out people who are more likely to take responsibilities and get trained to carry out their duties efficiently. Make a list of the skills you need to succeed in the long run. Either train your employees with the required skills or hire new people who can help you achieve the business goals.
3. Start Hiring to Meet Departmental Needs
After analyzing the resources you have at your disposal, it’s time to plan for the future. Make a prediction about how many employees you need to hire and which set of skills you need for which department. Keep the following in mind when determining the company’s future HR requirements.
- Design the jobs concerning the future of the company
- Identify skills current employees need to learn to stay relevant in the company
- Make sure your employee’s existing skills are used to their fullest potential
- Find out if the current HR practices can facilitate the company’s growth
- Audit all departments to detect if you need to lay off any employee.
4. Determine the Needs of Your Employees
Without employing an empathetic HR department at the core of your organization, you can’t expect to have happy employees. Strategic human resource management looks at employees’ needs with the highest priority. For example, if you have an IT department that is equipped with outdated software or hardware, it will automatically affect productivity.
Imagine, you have hourly-based employees but can’t keep track of their work history. This type of drawback impacts the employees’ ability to perform. Moreover, you need to also find out if your employees feel valued while working for you. Listen to them and try to know whether they’re satisfied with the compensation and benefits packages.
5. Develop And Implement Effective HR Strategies
At this point, you should have enough data and decision-making ability to develop effective HR strategies. The implementation is difficult but very much possible with the help of the top management of the company. Let’s learn the major steps of implementing HR strategies from the following list.
- Design a well-defined selection process
- Hire qualified applicants
- Plan a pleasant onboarding process
- Arrange training sessions when needed
- Offer employees with attractive perks and benefits
- Keep the workflow aligned with company goals
- Help employees build an emotional connection with the organization.
6. Foster a Healthy Company Culture
No matter how much you pay the employees, they’ll not have mental peace if the company culture is toxic. Build a culture where everyone has respect for others. Since we’re humans, conflicts are inevitable. The HR department should play a proactive role in managing conflicts without any biases.
Micromanagement is another aspect of the workplace that hampers the company culture to a great extent. Managers should focus on the final outcomes rather than observing the work process closely. They should trust their subordinates and allow them to work independently.
7. Evaluate Employee Performance And Reward the Deserving
Your employees feel the need to be recognized and valued for their contributions. SHRM makes sure each employee gets what they deserve. Evaluate their performance against measurable KPIs. Keep the evaluation process transparent so that no one doubts the evaluation.
It’s a good practice to introduce reward programs like employee of the month, the top performer of the week, and more. Conduct the evaluation process regularly (a six-month cycle is recommended) and offer incentives, increments, and promotions to the deserving employees. You will get the best output from the employees only when they think they are valued for their efforts.
Read more about the Crucial HR Manager Roles And Responsibilities In A Growing Company
Use an HRM Software to Have a Systemized SHRM in Your Organization
A software or HR management tool can minimize your workload and speed up the working process. If you have a WordPress website where you want to manage all your HR-related tasks, WP ERP is one of the best tools available out there. It provides an easy Employee Management plugin for WordPress users.
WP ERP comes with exciting features that are required to implement a strategic management process within an organization. The key features are as follows.
- Employee management
- Attendance management
- Training management
- Document storage
- Asset management
- Easy navigation
- A dashboard with quick insights
- Employee performance evaluation
- Employee leave management
- Payroll management, and more.
With an efficient tool like WP ERP, implementing your HR strategies will become a lot easier. So, power up your human resource today with this amazing WordPress HR Management plugin.
Hope now you know the steps to creating effective strategic HR management. It’s time to translate these abstract ideas into actionable programs. Your strategies must be feasible and have concrete objectives. No matter how intricate your strategies are, you need to look out to overcome the following barriers.
- Most employees are eager to accept initiatives that are relevant only to their job responsibilities
- Old employees tend to cling to old practices and maintain the status quo
- Every employee doesn’t have the same level of understanding of the initiatives taken as a part of strategic HR management
- New HR practices are sometimes perceived as a threat
- Senior management often lacks trust in innovative strategies
You need to be aware of these practical implementation issues beforehand. It’s the duty of the HR department to gain the trust of higher management. Especially, line managers can help the HR professionals to overcome all the barriers and formulate HR strategies well. Only the HR department can never achieve the organizational goals, so, therefore, implement strategic resource management within your company by collaborating with all relevant departments.
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