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Strategic HR Management

What is strategic HR management?

Strategic HR management is a holistic, structured approach to employee-related processes. With this operational model, HR processes are aligned closely with long-term business objectives, vision and values.

Strategic HR management is characterized by the following principles:

  • HR optimizes administrative processes so they can devote time to building a positive culture
  • Employee engagement is as important as employee productivity
  • People are the organization’s greatest asset and HR is a profit-maker rather than cost center
  • HR operates proactively rather than reactively
  • The CHRO is a valued member of the executive team and equal participant in business planning
  • An organizational culture in which employees thrive is a critical KPI and competitive advantage
  • HR creates agile staffing models that leverage modern workforces including distributed teams, gig workers, mobile employees, and project-based hiring

How does strategic HR management differ from traditional HR management?

In corporate America, HR has traditionally operated in isolation, outside of other business functions. This is due to many factors including organizational hierarchies, the administrative nature of HR, the hyper-specialization of business software, and HR data security needs.  When Human Resources operates in a silo, it is poorly equipped to drive business success.

What are the advantages of strategic HRM vs traditional HRM?

The Society for Human Resource Management (SHRM) lists the following benefits of strategic HR management:

  • Avoiding costly and disruptive surprises that interfere with achieving goals
  • Addressing key issues in a timely manner to avoid crises
  • Promoting employee productivity and overall organizational success
  • Providing a sense of direction to positively affect how work gets done
  • Keeping employees focused on organizational goals
  • Providing a strategic focus to guide training and development initiatives
  • Giving leaders tools to help focus and implement their strategic initiatives

The best of strategies can be derailed by a dysfunctional culture. A great culture powerfully enables the right strategic vision and plan. Leaders must think carefully about how their organization’s culture aligns and support its strategy.  HR Dive

Recent SHRM research reveals that HR professionals foresee significant workplace challenges, including rising health care costs, the retirement of large numbers of Baby Boomers and the increased demand for work/life balance. Retention programs, work/life programs, succession planning, and health, safety and security programs are among the HR efforts that are viewed as key workplace challenges through which HR can strategically contribute to organizations.

How can a small business transition from traditional to strategic HR management?

It is just as important for small businesses to adopt strategic HR management as enterprise organizations. The following actions can help smaller companies transition to a strategic HR model:

  1. Create a 5-year hiring plan that focuses on long-term business goals and needs
  2. Use a Human Resources Management System (HRMS) to unify and optimize HR processes
  3. Create a career paths program, up-skill, and cross-train employees

“…in recent years recognition of the importance of human resources management to a company’s overall health has grown dramatically. This recognition of the importance of HRM extends to small businesses, for while they do not generally have the same volume of human resources requirements as do larger organizations, they too face personnel management issues that can have a decisive impact on business health. Inc.com

“The rise of 21st-century HR has given birth to a new breed of HR executive, with a much broader skill set, who is leading the transformation of what’s possible in the field and reinventing HR as a data-driven strategic function critical to an organization’s success.” Fast Company

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