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Strategic Human Resource Management: Definitions, Examples, and Implementation
Life and Style Daily
May 24, 2022
8 min

If you’re reading this, you’re probably interested in implementing a strategic human resource management plan, or improving on the one you already have. That’s good thinking, and here’s why we say so:

Many companies benefit from treating their employees as worthwhile investments. A survey done by the analytics and advisory firm Gallup confirmed this and revealed a 21% increase in profit with a more engaged and satisfied workforce. While this report dates back to 2013, it’s fundamental to the importance of upholding a pleasant organizational culture.

However, you’ll only achieve this and your other long-term objectives with strategic human resource management. This post will guide you through the basic definition of strategic HR management and its significance. We’ll also discuss some of the best practices that will align with your goals and give you a competitive advantage.

What is Strategic Human Resource Management?

Strategic human resource management is a collaborative process that aims to recruit talents, develop their skills, and retain them in the workforce. It involves communicating with different individuals from the various departments of an organization to define and set specific and long-term goals.

From here, you can conceptualize and create a more tailored strategic HR framework involving your recruitment, development, and management practices. It also has the power to address and prevent possible employee-related issues from happening.

Simply put, strategic human resource management allows you to manage each individual’s needs and uphold your company’s culture and values without compromising anyone’s well-being.

Why is Strategic HRM Important?

Properly implementing strategic human resource management is the foundation of any successful business. It has several advantages you wouldn’t want to miss out on.

Let’s take a look at the following benefits of strategic HRM below.

Creates a Balanced Workplace

One of the primary advantages of strategic human resource management is creating a balanced workplace.

That means being inclusive and eliminating potential forms of friction among your employees to encourage a healthy work atmosphere.

According to McKinsey and Company’s study in 2020, companies with a more diverse workforce tend to outperform less diverse businesses by 36%. Diversifying your workplace also gives you a broader talent pool with different perspectives and ideas.

Keeping Up With Innovations

Strategic human resource management also focuses on developing and training the skills of your employees. Through this approach, you can better equip them with the latest innovations and changes in the business landscape.

A report by Gartner in 2020 shows that at least 51% of HR departments look to technological advancements to save company costs.

It also showed that these developments improve your overall employee experience.

More Employee Empowerment

Employees are likely to be more empowered when they can voice out their concerns and feel heard by their managers.

By devising critical strategic human resource management approaches,74% of your employees becomes more effective at their respective job positions.

Enhanced Employee Engagement

Another study by McKinsey & Company in 2021 showed that employees who aren’t satisfied with their workplace have poorer work outcomes.

These people usually have reduced life satisfaction, excitement, and energy to work.

In contrast, strategic human resource management can engage your employees more. This way, you’re likely to bring more revenue to the company.

They also tend to work harder and have fewer personal issues that could lead to absences.

Improved Employee Well-Being

Since strategic human resource management focuses on creating proactive approaches, you can better improve your employees’ mental and physical health through this strategy.

Generous benefits, flexible work schedules, and wellness initiatives can go a long way for your workforce.

This way, you can create a healthier and more productive work environment. It also minimizes potential issues that could cost your business.

Better Employee Retention

Overall, strategic human resource management ensures that your organization’s workforce works together as a whole in a conducive environment.

You’ll have a greater chance to grow and retain top talents.Based on MITSloan’s study, wellness initiatives can increase your employees’ loyalty by 79%.

You can also save more money, time, and resources when recruiting.

Difference Between HRM and Strategic HRM

Human resource management is a reactive approach to managing your employees.

It solely relies on administrative work, including recruitment and staff training to ensure that your workforce operates legally. It also addresses grievances when brought up instead of limiting them in the first place.

But when you incorporate proactive approaches to your strategies, your HR department becomes a powerhouse in the rapidly changing business landscape.

That’s why strategic human resource management involves aligning your current HR practices to your company’s objectives and vision.

It allows your employees to showcase their strengths and deliver their best capabilities to meet your strategic goals.

It also focuses on attracting and retaining top talents, developing their skills, and recognizing key players to improve your overall employee experience.

Examples of Strategic Human Resource Management

Over the years, many global companies have implemented strategic human resource management to hone the skills and talents of their employees.

True enough, these companies have become the most distinguished names in their respective industries because of their people-centric approach.

Bain and Company

Bain and Company has shown excellent strategic human resource management as it gives importance to the overall satisfaction rate of their employees with their tasks.

They also encourage a collaborative work atmosphere to foster the skills of their talents and bring out their productivity.

On top of this, Bain and Company’s community allows its employees to generate meaningful ideas and foster camaraderie within the teams.

They can also attend training and mentoring sessions with their flexible working schedules.

FedEx Corporation

FedEx has consistently delivered quality services to its customers because of strategic human resource management.

Their employee-centric mindset boosts their employees’ efficiency to achieve success.

They have been building on the idea that their employees must feel well-treated to enhance their overall productivity and growth.

In doing so, they collect annual feedback and discuss them within their teams. This approach fosters a collaborative and encouraging environment for all their employees.

Google

Google’s approach to human resource management is very modern and innovative.

They have fostered a space where their employees can give and receive feedback and grow throughout the process.

It has taken its human resource management to the next level by hiring individuals who analyze the preferred behaviors of its employees, especially their managers and leaders.

Through this, they can give more meaningful training and capacity-building activities.

Aside from people management, Google has also enhanced the use of its office by turning it into a creative and productive space.

These practices have attracted top talents and developed the skills of their current employees.

LinkedIn

LinkedIn’s human resource management strategy is impressive in managing its employees and cultivating a creative space.

They have taken their company motto, “work hard, play hard,” and incorporated it into their culture and practices.

One of their notable practices is holding company get-togethers with live music and a party atmosphere to reward their employees’ business performance.

They have also created an organizational culture that allows teams to carry out extraordinary ideas to establish more efficient systems and innovations.

Cottonbro / pexels.com

LinkedIn also holds a monthly event that enables its employees to set aside their regular work routine to brainstorm concepts to enhance company turnover and productivity.

Nissan

Nissan utilizes Japanese manufacturing technologies with the best strategic human resource management practices.

They enable their employees to improve their skills and task accomplishments continuously.

From hiring new talents to managing its workforce, Nissan allows its company leaders to supervise and implement strategies throughout these phases.

In doing so, they give them autonomy to grow individually and bring their teams to success along with them.

How to Implement Strategic HRM in a Workplace

HR professionals and managers play an important role in devising strategic HRM approaches from start to finish.

Here’s a general guide on how you can create your very own human resource management strategy.

Go Back to Your Company’s Main Objectives.

Creating an effective HR strategy begins by understanding the company, its core values, and objectives.

Knowing its history and achievements can also give you an idea of what to do to achieve your organizational goals and vision.

By having a good understanding of your company, you’ll have a preliminary idea of how you can manage your resources.

Evaluate and Make Sense of Your Company’s Current Situation.

After knowing and understanding how your company wants to move forward, it’s imperative to assess where you’re currently standing.

In doing so, you can visualize the plan you have to craft to achieve your company’s business goals.

Evaluating your current human resources may be done through different types of assessments and analyses. Here are the best tools you can employ:

Employee Skill and Talent Assessment

You can start with reviewing your employees’ resumes and evaluating their performance in their recent tasks.

This approach helps you determine their strengths and skills to know what they contribute to the company.

Through their previous work experiences, skills, and certifications, you can devise more tailored programs for your workforce.

These events can also help you enhance their abilities and develop new skills.

Perform a Gap Analysis

Before implementing any new plan, it’s crucial to know what your company lacks.

One way to do this is to determine the overall satisfaction of your employees with the current resources they have. This way, you can create a more productive environment for them to work in.

You can also include finding the root cause of why employees resign.

In doing so, you can help your team determine what more you can do to increase your company’s productivity and efficiency.

Use a SWOT Analysis

A SWOT analysis can also help you evaluate your company’s current situation. SWOT stands for strengths, weaknesses, opportunities, and threats.

One way to determine the strengths and weaknesses of your company is through employee experience and feedback. This approach is a proactive way to create a working HR framework.

On the other hand, opportunities and threats lie in the different external factors that affect your employees’ productivity.

These are elements that you have no control over. However, you can use this to your advantage to create plans and strategies to increase possible opportunities and decrease threats.

Realign Your HR Activities.

Now that you’ve evaluated the current state of your company, you can then develop strategies to fill in the factors you’re currently lacking.

Some approaches you can do include:

Spearhead Meaningful Training and Capacity-building Activities

One way to ensure continuous company growth is to let your employees grow.

Find common skills that your employees need to work on and use them as leverage to create a program or activity that can help them enhance those qualities.

Implement a Consistent Feedback System

To ensure that your human resource management strategy is working, you must not rely only on observations.

Remember that feedback is an essential part of enhancing your HR practices. Through this, you’ll be able to develop a system that best fits your strategic goals.

Keep Track of Your Progress.

Finally, it’s always crucial to monitor and evaluate your current practices when building an HR strategy.

You can see how effective your strategies are through these assessments. Let’s look at the following approaches to assess your framework in place.

Monitor your KPIs

Having specific objectives for your strategies will help you determine their effectiveness on your employees.

You will be able to see which approaches are working and not working. With such information, you can adjust your methods accordingly.

Record Analytics

Practice a data-driven evaluation to show the maximum impact of the strategies you’re implementing.

Record numbers such as turnovers, employee satisfaction, and demographics to see their trends and work around them.

This way, your team can adjust their current strategies to accommodate the needs of your employees. You can use the top HCM software to get this data effortlessly.

A Final Note

It’s worth mentioning that there’s no one-fits-all strategic human resources management plan. Instead, you must align your HR strategy with your company’s culture, objectives, and conditions. This way, you can help your employees grow and develop their skills.

Remember that 53% of employees consider their work environment a crucial factor for resigning. So make sure to choose the best HR software to help your team create a more inclusive and coherent strategic human resource management framework.


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