What is Strategic Human Resource Management? - HR University (2022)

Strategic human resource management is a process that helps the human resources department maximize the potential of its workforce through strategic planning, talent management, leadership development, organizational design, and performance management.

In the past, strategic HR management was an administrative function.

Today, HR managers play a critical role in ensuring that the organization has the right people that help improve business performance and ensure that it delivers on its mission.

It means that HR professionals need to understand its goals and objectives. How they can best help the organization achieve those goals, and what actions will allow them to do so. This article will help you better understand what strategic human resource management is and how a smart plan can bring tremendous value to the organization.

Strategic HR Management Goals

Strategic human resource management is about developing and implementing strategies for attracting, retaining, motivating, and managing talented individuals who contribute to the organization’s success. HRM also includes policies and practices designed to ensure fairness in employment relations.

Strategic human resource management aims to achieve a competitive advantage by creating value for customers, shareholders, employees, and other stakeholders. The term “strategy” refers to the organization’s overall plan of action to create value. It is not just one thing; it is a combination of many things, including:

  • Actions taken by the organization to meet customer needs
  • Policies and procedures used to manage the organization
  • Processes used to produce goods or services
  • Marketing activities used to sell products and services
  • Financial decisions made to fund operations
  • Organizational structure
  • The technology used to support business processes
  • People-related issues such as recruitment, selection, training, compensation, benefits, and performance management
  • Legal requirements and regulations affecting the organization

How Can Businesses Benefit from HR Strategic Planning?

What is Strategic Human Resource Management? - HR University (1)

(Video) Strategic Human Resource Management (MSc at Utrecht University)

Businesses benefit from strategic human resources management because it allows human resource departments to make better decisions. For example, companies can develop plans to improve productivity, reduce costs, increase profits, and enhance employee satisfaction. The sales and HR departments play a role in determining whether the company should expand into new markets, acquire another company, or merge with another business.

If you want your business to grow, you must first understand where it stands before developing a plan. Also, you must know your strengths and weaknesses and then work towards improving both. You must also identify opportunities to create new products or services.

If you want to attract more customers, understand what your target market wants and how you can provide it. It would be best if you also decided which marketing methods would work best.

To retain current customers, you must first find out why they buy from you instead of competitors. Then you must figure out ways to keep them satisfied. You may even wish to consider offering discounts or gifts to reward loyal customers.

You must also think about motivating your employees to perform well and stay productive. If you want to hire more qualified candidates, you must first understand the qualities you are looking for in potential hires. You must also decide if you’re going to use job descriptions or conduct interviews when hiring.

Once you have determined your priorities, you can begin to implement changes to improve results.

Strategic Human Resources Management Benefits

Strategic HR involves careful consideration and analysis. Due to that, here are specific benefits of human resource strategic planning for businesses:

  1. Identify areas of weakness and strengths
  2. Develop strategies to address these weaknesses and strengths
  3. Establish sub-goals and objectives to measure progress towards the end goal
  4. Make sure there is alignment between business strategy and human resources strategy
  5. Ensure that all aspects of the organization revolve around the same set of goals and objectives
  6. Create a culture of continuous improvement
  7. Evaluate the effectiveness of programs and policies
  8. Increased job satisfaction
  9. Employee retention

Check our certified HR courses if you want to learn more about developing and implementing a strategic HR management plan. Master HR management and how to get the best out of your employees.

7 Steps to Creating a Strategic HR Plan

One of the main functions of HR is to provide an effective organization’s workforce management. It includes operational and strategic management and developing a plan that helps employees evolve. To do this, you need to start by determining the purpose of your human resource strategy.

Next, you need to look at the organizational structure of your company. How many levels are there? Do you have a different human resources department within each class? Are some divisions larger than others?

(Video) #01 The strategic Side of Human Resources Management

Some of the target outcomes for human resources planning include the following:

  • Increase profitability through a strategic HR planning process
  • Improve customer service
  • Enhance employee morale and motivation
  • Provide training and development opportunities
  • Reduce turnover rates
  • Maintain high-quality standards

Once you have these outcomes in mind, you can follow the following steps in developing a strategic HR department.

1. Define Goals

Defining goals helps you focus on a more strategic human resource management strategy. It gives you direction and provides a framework for measuring success. A goal is an objective you hope to achieve within a specific time frame. It’s something you want to accomplish. A plan is usually quantifiable. For example, you might say, “I want to increase my sales revenue by 20% to achieve a competitive advantage.”

Goals break down into sub-goals. The intermediate goals help you reach the ultimate goal. Additionally, they provide milestones in the strategic HR planning process. For example, if your ultimate goal is to increase sales revenue by 20%, then your intermediate goals can be:

  • Achieve a 5% increase in sales revenue over last year.
  • Achieve a 10% increase in sales revenue from January to June.
  • Achieve a 15% increase in sales revenue during July.

It’s also essential to develop a SWOT analysis when defining your strategic HRM goals. The SWOT analysis helps identify any potential threats or obstacles that may hinder organizational success.

When conducting a SWOT analysis of your HR strategy, consider the following questions:

  • What are your strengths?
  • What are your weaknesses?
  • Where are your opportunities?
  • What are your threats?

Answering these questions will help you define business goals and improve business performance.

2. Determine Objectives

Objectives are measurable actions you take to meet your goals. They are how you achieve your goals.

Your objectives should be realistic. They should not be too ambitious. If they are too complicated, you may fail. You also don’t want them to be so easy that you will never succeed.

You should have a working strategic human resource management process to define specific human resource objectives for your business. Some examples include:

  • Increase the number of new hires by 50%.
  • Increase the average length of employment by three months.
  • Reduce the percentage of employees who leave their jobs by 25%.
  • Eliminate the use of temporary workers.
  • Increase the number and proportion of women in management positions.
  • Increase the proportion of senior managers with MBA degrees.

Your HR objectives should align with your overall company objectives. For example, if your company wants to increase its market share, setting up similar goals makes sense. Additionally, you should align all your HR objectives to your company’s financial objectives.

(Video) Ashridge's Strategic Human Resources Management Program

Keep in mind that the more tangible your objectives are, the easier it will be to measure progress.

3. Create Strategies

What is Strategic Human Resource Management? - HR University (3)

Strategic human resource management is all about the strategies you intend to use to achieve your objectives. They are the methods you’ll use to get there. There are many different strategies available. However, there are three main types.

  • Change Strategy– This involves changing the current status quo or making changes that are already underway.
  • Reinforcement Strategy– Involves reinforcing existing practices and policies.
  • Innovation Strategy– Introduces new ideas and processes.

Your organization’s strengths and weaknesses are the foundation for your strategic human resource management. There isn’t a single best tactic. Instead, the best strategy depends on the situation.

4. Develop Tactics

Develop HR techniques you’ll use to implement your strategies. There are two kinds of tactics:

  • Direct Tactics– These involve implementing your strategies immediately. Examples include hiring additional staff, promoting more people, giving raises to employees, and employee retention strategies.
  • Indirect Tactics– These involve using other resources to support your strategies. Examples include advertising, training, outsourcing services, etc.

When developing strategic human resource management tactics, think about the results you expect from each tactic. Do you need immediate results? Or can you wait until later? How much money will you need? How much time do you have before you need to start seeing results?

It would be best to keep in mind that you can only do what you have authority over. So, if you’re trying to promote an employee but they report directly to someone else, you won’t be able to do anything about it.

5. Plan Implementation

Planning is determining when, where, and how to execute each tactic. Planning includes deciding whether to act now, wait until later, or do nothing.

While implementing, it’s essential to closely monitor different factors that may affect the composition of a workplace. These factors include:

  • Age– Older employees tend to have more significant experience than younger ones. Younger employees are usually less experienced. It can be hard to find good talent among young people.
  • Gender– Women typically make up about half of the workforce. Men generally make up the rest. Companies with a higher proportion of female employees tend to have better performance.
  • Race– People of color tend to earn lower salaries than white men. In addition, they are less likely to receive promotions.

6. Monitor Performance

Monitoring results is the process of evaluating what has happened after implementation. Monitoring includes measuring performance against pre-determined benchmarks. It also includes assessing the impact of any changes made by strategic HR management to improve effectiveness.

Monitoring performance is an ongoing activity. It requires constant attention. Monitoring helps determine what works and what doesn’t.

(Video) Traditional vs Strategic Human Resource Management

There are several tools you can use, including:

  • Surveys
  • Interviews
  • Observation

7. Evaluate Performance

Evaluating performance is critical in any HR department. It is the process of comparing actual results to expected outcomes. Evaluation can be done by analyzing data collected through monitoring and evaluation.

Evaluating your performance is crucial because it lets you know if your strategies are working. If not, then you need to change them. For example, if your HR strategies aren’t producing desired results, you might consider changing your approach, including outsourcing strategic human resource services.

Conclusion

Including strategic human resource management into the overall business strategy help with creating a productive environment, but it also helps with other crucial aspects such as retaining employees.

If the human resource department succeeds in creating an effective strategy, it brings value to the organization.

Take time to create the human resource management strategy. Having the right plan creates a streamlined process that’s easy to follow. Good luck.

If you are new to Human Resources and are looking to break into an HR role, we recommend taking ourHR Certification Courses, where you will learn how to build your skillset in human resources, build your human resources network, craft a great HR resume, and create a successful job search strategy.

What is Strategic Human Resource Management? - HR University (4)

Josh Fechter

Josh Fechter is the founder of HR.University. He's a certified HR professional and has managed global teams across 5 different continents including their benefits and payroll. You can connect with him on LinkedIn here.

(Video) Webinar MSc Strategic Human Resource Management

FAQs

What is human resource management in university? ›

The major in Human Resource Management is designed to develop skills in the management functions of strategic and human resource planning, compensation, recruitment, training and development, career planning, organizational effectiveness, employee relations, and collective bargaining.

What is difference between HRM and SHRM? ›

Human resource management (HRM) implies the governance of manpower of the organization in a thorough and structured manner. SHRM is a managerial function which implies framing of HR strategies in such a way to direct employees efforts towards the goals of organization.

What is SHRM and why is it important? ›

Strategic human resource management is the foundation of a strong business because, when properly applied, it ensures that the company as a whole is working together to reach its goals. This gives the business a greater chance to succeed.

What is the difference between HR and strategic HR? ›

A strategic HR manager is focused on forming a long-term strategy. For example, when they are looking to hire for a position, they are considering future growth projections and goals of the company. While traditional HR managers work reactively, strategic HR managers work proactively.

Which degree is best for HR? ›

A bachelor's degree is the typical entry-level education for an HR specialist. Most of the time, professionals have a bachelor's degree in human resources because they are ready to make an impact from day one. Human resource managers plan and direct the administrative functions of an organization.

Does human resources have a lot of math? ›

Math. You were promised that you would not have to do math in HR; that's why you chose it instead of accounting. Sorry! While you don't need to do as much math as you do in accounting, a lot of compliance work requires a solid understanding of math and statistics.

What is meant by strategic human resource management? ›

Strategic human resource management (strategic HRM) provides a framework linking people management and development practices to long-term business goals and outcomes. It focuses on longer-term resourcing issues within the context of an organisation's goals and the evolving nature of work.

What is an example of strategic human resource management? ›

Examples of strategic HR functions include compensation planning, recruitment, succession planning and employee development.

What are the features of SHRM? ›

Key Features of Strategic Human Resource Management
  • There is an explicit linkage between HR policy and practices and overall organizational strategic aims and the organizational environment.
  • There is some organizing schema linking individual HR interventions so that they are mutually supportive.

Is SHRM certification good? ›

If you are happy at the company that you currently work, the SHRM can also represent an advantage for you. According to research, the median pay for an HR professional with an SHRM certification was close to $88K while those without any certification made around $46K.

What does a SHRM certificate do? ›

The SHRM-CP exam is designed to assess the competency level of those who engage in HR work at the operational level. Work at this level includes duties such as implementing HR policies, supporting day-to-day HR functions, or serving as an HR point of contact for staff and stakeholders.

How do you become a strategic HR professional? ›

5 Steps to Being a More Strategic HR Leader
  1. Schedule time to think strategically.
  2. Understand the needs and challenges of your company.
  3. Gather data and understand metrics.
  4. Develop and implement plans.
  5. Forecast into the future.
24 Jun 2020

Who is responsible for strategic HR planning? ›

The HR Role is to take the full responsibility for the alignment of employees' skills and competencies with the strategic plan. First, HR has to demonstrate that it is the respectful business partner for the strategic planning. HR has to take the full responsibility for connecting people, ideas and tools together.

What are the barriers of SHRM? ›

BARRIERS TO STRATEGIC HRM –
  • Short-term mentality/focus on current performance.
  • The inability of HR to think strategically.
  • Lack of appreciation for what HR can contribute.
  • Failure to understand line manager's role as an HR manager.
  • Difficulty in quantifying many HR outcomes.

What subjects do I need to study HR? ›

Subjects
  • Personnel Management. ...
  • Computer Practice. ...
  • Management Communication. ...
  • Entrepreneurship and Business Management. ...
  • Labour Relations. ...
  • Personnel Training.

Is a career in HR worth it? ›

You want a fast-growing career outlook.

Because HR plays a crucial role in helping companies run smoothly, it's no wonder that it's become one of the fastest-growing fields in the United States. In fact, the Bureau of Labor Statistics (BLS) predicts an additional 70,000 HR jobs will flood the industry by 2030.

Is a HR degree worth it? ›

Your training in human resources has the potential to provide a sizeable return on investment. In fact, statistics show that full-time workers with a bachelor's degree typically earn 84% over their lifetime than those with only a high school diploma. Human resource management particularly offers a high ROI.

Can I study HR without maths? ›

Can I Study HR Without Maths? Yes, you can study the Human Resource Management NATED courses without Maths. You do not need specific subjects to study.

Is human resources degree hard? ›

Is a Human Resources Degree Hard? HR degrees can challenge students with their blend of business and human relations training. However, learners with proper preparation and study habits should find this program no more difficult than other business disciplines.

Do human resources make good money? ›

Yes, human resources managers make good money.

The median salary for a human resources manager is over $100,000. However, several variables contribute to the salary of a human resources manager. These variables include company size, location, and experience.

What are the 5 steps of strategic HR management? ›

Your Strategic HR Plan will be built upon the foundation of this strategic business plan.
  1. Step 1: Identify Future HR Needs. ...
  2. Step 2: Consider Present HR Capabilities. ...
  3. Step 3: Identify Gaps Between Future Needs & Present Capability. ...
  4. Step 4: Formulate Gap Strategies. ...
  5. Step 5: Share & Monitor The Plan.
18 Apr 2018

What is strategic human resources management PDF? ›

Strategic human resource management is the process of linking the human resource function with the strategic objectives of the organization in order to improve performance.

What is strategic human resource management Wikipedia? ›

Human resource management (HRM or HR) is the strategic and coherent approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives.

What are the important tools for strategic human resource management? ›

5 Tools For Strategic Human Resource Management
  • Customized onboarding for new hires.
  • Ongoing training opportunities for all employees.
  • Ongoing meetings to review the HR strategy.
  • Formal and informal employee surveys.
26 May 2020

What are the 4 types of HR? ›

Types of Human Resources Management Jobs
  • Recruitment and Selection. Human resource management jobs include professional recruiters who filll vacancies within an organization. ...
  • Compensation and Benefits. ...
  • Health and Safety. ...
  • Labor and Employee Relations. ...
  • Training and Development. ...
  • Risk Management. ...
  • Managers and Directors.

What are the four components of SHRM? ›

In the HR cycle, the model shows four generic processes or functions performed by the HR system in all organizations-selection, appraisal rewards and development. These four processes reflect sequential managerial tasks, and performance is the function of all these four HR components.

What are the 5 P's model of SHRM? ›

5 Ps of Strategic Human Resource Management they are Philosophy, Policies, Programme, Practices and Processes all are described in detail.

How long is SHRM course? ›

This intensive 12-week/36-hour program combines expert instruction with the SHRM Learning System®, so you will learn faster, retain more knowledge and stay on track for success on the exam.

How long do you need to study for SHRM? ›

How Much Time Do People Spend Studying for the Exams? Test-takers of both the SHRM-CP and SHRM-SCP exams spent a wide range of time preparing for them. The most common preparation times reported fell into two ranges, 41 to 80 hours and 81 to 120 hours.

How much does it cost to join SHRM? ›

Regular professional members of the Society pay annual dues of $229 and receive additional services to assist them in their professional roles.
...
Student Services - FAQ.
Student MembershipProfessional Membership
Full access to the SHRM websiteFull access to the SHRM website
Access to SHRMConnectAccess to SHRMConnect
5 more rows

Does SHRM require a degree? ›

Candidates for the SHRM-CP certification are not required to hold an HR title and do not need a degree or previous HR experience to apply; however, a basic working knowledge of HR practices and principles or a degree from an Academically Aligned program is recommended.

Does SHRM certification expire? ›

SHRM credential holders are required to recertify every three years and are provided with two options to do so: by earning PDCs (60 per 3-year cycle); or by retaking the exam.

How many people are SHRM certified? ›

Launched in January 2015, the Society for Human Resource Management (SHRM) certification — SHRM Certified Professional (SHRM-CP) and SHRM Senior Certified Professional (SHRM-SCP) — has become the premier professional certification in the human resources field with more than 101,550 certificants.

What jobs can I get with a human resource management degree? ›

In general, however, HR managers are required to plan, direct and co-ordinate the HR functions in an organisation.
...
Some of the job titles to look out for include:
  • Benefits Administrator.
  • Employee Relations Manager.
  • HR Assistant.
  • HR Generalist.
  • HR Manager.
  • Labour Relations Officer.
  • Payroll Manager.
  • Recruitment Specialist.

What do you learn in human resource management class? ›

Students will learn strategies to plan, recruit, compensate, develop, and engage a company's workforce. The course covers additional topics including unions, employee safety, corporate social responsibility, global HRM, and small business HRM.

What subjects are in human resource management? ›

HRM Curricular Components and Competencies
  • Strategic Planning.
  • Talent Acquisition.
  • Employee Engagement & Retention.
  • Learning & Development.
  • Total Rewards.
  • Structure of the HR Function.
  • Organizational Effectiveness & Development.
  • Workforce Management.

What can I expect from human resource management course? ›

Some of the topics that are covered on these programmes include HR Performance Management, Human Resource Management, Employability in Action, Strategies for Human Resource, Promoting Employee Engagement, Training, Learning & Development and International HRM.

Which country is best for HR jobs? ›

The human resources manager's salary below is highest in the USA, while the salaries in the UK and Canada are very close to one another. This is likely due to the higher population and higher demand for HR managers in the USA.

What are the 4 types of HR? ›

Types of Human Resources Management Jobs
  • Recruitment and Selection. Human resource management jobs include professional recruiters who filll vacancies within an organization. ...
  • Compensation and Benefits. ...
  • Health and Safety. ...
  • Labor and Employee Relations. ...
  • Training and Development. ...
  • Risk Management. ...
  • Managers and Directors.

Is human resource management hard to study? ›

Completing an online degree in HRM won't be easy, especially if you have other commitments like a full-time job.

Why should I choose HR as a career? ›

HR professionals have a unique perspective into the businesses they work for due to the nature of their jobs. Not only do they have a strong understanding of an organization's priorities and challenges, but they also have the ability to influence the future of the company based on the employment decisions they make.

How long is HRM course? ›

BS HRM is a four-year undergraduate degree program and offers two different tracks namely Culinary Management Track and Hotel Operations Track that will equip students with competencies related to the basic and core requirements as well as those associated with major and minor areas of concentration and elective ...

Why HR is a good career? ›

Companies rely on HR to maximize employee productivity, create benefits packages, find and maintain talent, and implement company-wide policies that improve operations. That's a tall order for HR professionals but one that comes with high job satisfaction, great earning potential, and plenty of opportunity for growth.

Does HRM course have math? ›

Even you need a good experience to be a HR manager. You are usually appointed for this after your hard work and of having a good work experience. You must know the basics of maths undoubtedly. This is all you need .

Which course is best for HR manager? ›

General factors to take into account, like with any other kind of Human Resources training, are:
  • Coursera – Human Resource Management: HR for People Managers. ...
  • HRCI – Senior Professional in Human Resources (SPHR) ...
  • SHRM – Senior Certified Professional (SHRM-SCP) ...
  • Wharton Online: HR Management and Analytics.

Is HRM a good course? ›

Overall, an HRM degree, whether it's a Bachelor's or a Master's program, is a rewarding educational experience that transcends into a career choice with countless opportunities to grow and have a satisfying career.

What are the 7 roles of human resource management? ›

What Does an HR Manager Do? 7 Functions of the Human Resources Department
  • Recruitment and Hiring.
  • Training and Development.
  • Employer-Employee Relations.
  • Maintain Company Culture.
  • Manage Employee Benefits.
  • Create a Safe Work Environment.
  • Handle Disciplinary Actions.

What qualifications are needed to become a human resource manager? ›

How To Become an HR Manager?
  • Degree. According to the U. S. Bureau of Labor Statistics, a human resource manager needs a bachelor's degree or an equivalent degree to enter the field. ...
  • Internship. ...
  • Experience and Expertise. ...
  • Apply for the position of manager. ...
  • Getting certified. ...
  • Agility. ...
  • Analytics. ...
  • Empathy.
22 Apr 2022

Videos

1. Introduction to Strategic Human Resource Management
(HR Learning Hub PH)
2. What is Strategic HR?
(Leanne Schultz)
3. What Is Strategic Human Resource Management?
(Jotform)
4. Master Business Administration - Strategic Human Resources Leadership
(RadboudFdM)
5. Radboud Master's Programme Strategic Human Resource Management
(Radboud University)
6. #30MinsWithHR: Strategic Human Resource Management for Organizational Success
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