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What is Strategic Human Resource Management? Definition and Examples

Published on Sep 16,2022 46 Views


Strategic human resource management (SHRM) involves planning, organising, leading, and controlling the resources and activities of a company to achieve strategic objectives. The goal of SHRM is to ensure that the company has the right people in the right places at the right time. This can be done by positioning employee goals with the company, creating a system where employees can give their best performance, and ensuring that employees are treated fairly. In this blog post, we will discuss strategic human resource management and give some examples of how it can be used in business. 

Importance of Human Resource Management For Company’s Success

Human resource management is critical for the success of any company. The human resources department engages in attracting, sorting, hiring, and retaining the best talent. They also manage employee benefits, compensation, and training.

A company’s human resources (HR) strategy should align with its business strategy. The HR department should be the strategic partner with the business, working together to achieve the company’s goals.

It goes without saying that human resource fuels a company from within. After all, the human resource department handles a company’s most valuable asset – its people. Hence, it is essential to prioritise strategic human resource management. 

A Glance Into SHRM

Strategic human resource management is a proactive and forward-thinking approach to managing an organisation’s most valuable asset – its people. To succeed, businesses must have a strategic plan for attracting, developing, and retaining top talent. This strategic approach ensures that HR initiatives are aligned with the overall business goals and objectives.

With SHRM, a business can create a comprehensive and integrated plan that covers all aspects of HR management, from recruiting and selection to training and development, compensation and benefits, employee relations, and diversity and inclusion. By taking a strategic approach to HR, businesses can create a competitive advantage with their best talents in place.

Businesses can use many different SHRM models and frameworks to guide their strategic planning. However, all SHRM models share some common elements, including a focus on strategic planning, alignment with business goals, and a comprehensive approach to HR management.

If you are interested in learning more about SHRM, we have a certificate course that will give you a deep insight into the matter. Check out our Post Graduate Certificate in Human Resource Management for more details.

How Does Strategic Human Resource Management Work With Business Strategy?

Strategic human resource management creates a link between the human resource function and the strategic goals of the organisation in order to enhance business performance.

The human resource function must align with the strategic objectives of the organisation in order to be effective. Evidently, the human resource department must clearly understand the organisation’s business strategy.

The HR department must also be able to identify the skills and competencies required to support the organisation’s business strategy. Once all the right skills and competencies have been identified, the HR department can begin to identify and attract candidates with the necessary skills and competencies.

It is the responsibility of HR professionals to develop and implement programs and policies that will support the organisation’s business strategy. For example, suppose the organisation’s business strategy is to become a market leader. In that case, the HR department might develop and implement programs that focus on developing employee skills and competencies that will help the organisation to achieve this goal.

The HR department must also be able to evaluate the effectiveness of the programs and policies that have been implemented. This evaluation process is essential in order to make sure that the programs and policies are actually supporting the organisation’s business strategy.

Strategic human resource management is a process that must be constantly adapted to the ever-changing needs of the organisation. It not only encourages a great mix of talents but also ensures they are working towards the growth of the company. 

Benefits of SHRM

There are several benefits that are achieved through strategic human resource management. By aligning HR strategies with the overall business strategy, businesses can create a competitive advantage and improve organisational performance. Take a look at the top-most benefits of having a strong SHRM in place:

  1. Increased Efficiency

Strategic human resource management can lead to increased efficiency in the workplace. When HR strategies are aligned with business goals, it can help to eliminate waste and duplication of effort. It creates a trail for a more streamlined and efficient operation, saving the company time and money. It’s a no-brainer that happy and content employees are more productive.

By investing in the development of employees, businesses can ensure that they have the skills and knowledge necessary to be successful. A good strategic human resource management system will help identify employees’ training and development needs. This can lead to improved employee performance and increased efficiency.

  1. Improved Employee Retention

Another benefit of strategic human resource management is improved employee retention. When employees are allowed to grow and develop within the company, they are more likely to stay with the organisation. This can lead to increased employee loyalty and commitment, which can improve retention rates.

Additionally, strategic human resource management can help to create a positive work environment. It lowers turnover rates and improves employee retention. When employees are 100% satisfied and happy with their workplace and job profile, they are less likely to look for other opportunities.

  1. Improved Employee Engagement

Improved employee engagement will directly benefit the company. It automatically fosters increased profits for the company and a better bottom line. Employees who are engaged and engrossed in their work are more likely to be productive and efficient.

In addition, engaged employees are found to be satisfied with their jobs and stay with the company for the long haul. It can pave the way for improved employee retention and a decreased need for replacements.

  1. Improved Customer Satisfaction

When employees are appropriately managed and engaged, it will improve customer satisfaction. When customers are happy with their products or services, they are more likely to return and recommend the company to others. It can bring increased sales and revenue for the business

It is imperative to have a strategic human resource management system in place to improve customer satisfaction and open up new growth opportunities.

  1. Increased Profits

Last but not least, strategic human resource management can lead to increased profits for the company. When all of the above benefits are achieved, it will result in a more efficient and effective operation. This can steer to increased sales and revenue for the business.

Productive and proficient employees are tantamount to a successful company. Whether it is increased revenue or satisfied clientele, it is a win-win situation for a company that adopts SHRM. Strategic HR is a good place to start if you want to improve your company’s growth.

Not only is it ideal for a company’s growth, but strategic human resource management can also provide professionals with a superior edge in their careers. If you want to learn SHRM in detail and how to best utilise it, take a look at our Post Graduate Certificate in Human Resource Management and decide. 

Examples of Strategic Human Resource Management From Leading Companies

Strategic human resource management is a process that helps organisations align their HR strategies with their overall business goals.

In order to find out how strategic HRM can be implemented in your organisation, it is helpful to look at examples from companies that have successfully used this approach.

Some of the most well-known companies that practice strategic HRM include Google, Facebook, CISCO and Starbucks. Let’s discuss these companies SHRM in detail:

Google

For years, Google has been ranked as the best company around the world to work for, and for all good reasons. It has been offering some amazing benefits to its employees that, in return, provide them with impeccable business results. They are known for their innovative HR practices, which include:

  • Offering employees a “career sabbatical” of up to six months every four years
  • Providing free food and childcare on site
  • Offering comprehensive health benefits
  • Encouraging employees to spend 20% of their time working on projects of their own choosing

These benefits are not just perks – they are strategic HR decisions that help Google attract and retain the best talent. They also conduct regular HR feedback and employee data collection to understand what is working well and what needs to be improved. 

In 2016, founders Larry Page and Sergey Brin said, “People operations are probably the most important thing we do.” This quote demonstrates how seriously Google takes strategic HRM.

Google is definitely a great example of how strategic HRM can be used to create a positive work environment and attract top talent.

Facebook

Facebook is another company that is known for its innovative HR practices, just like its business model. A few examples include:

  • Offering employees $2000 to move closer to the Facebook office
  • Providing free food and transportation to and from work
  • Giving comprehensive health benefits
  • Encouraging employees to take leave/break whenever required

They have brought the best talent in the industry by using strategic HRM practices. It not only kindles productivity but also keeps the work-life balance in check. 

As a result, it helps them maintain a low turnover rate. Just like it has captured its customers’ hearts, Facebook is a dream workplace for many who made this company what it is today.

Starbucks

Starbucks is a global company known for its strong culture and commitment to its employees. Some of the strategic HR practices that they use include:

  • Providing comprehensive health benefits
  • Offering stock options to all employees
  • Investing in employee development
  • Creating a culture of respect and inclusion
  • Fostering a work-life balance
  • Providing opportunities of contributing to the community to employees

Starbucks has been successful in creating a strong culture and committed workforce. These strategic HR practices have helped create a positive work environment and retain employees.

CISCO

Cisco is an excellent example of strategic human resource management in action. Cisco has a set of HR strategies and policies in place that are designed to attract, retain, and develop the best talent. Some of the strategies are:

  • Offering a variety of job opportunities and career growth paths
  • Providing competitive salaries and benefits
  • Offering training and development programs
  • Creating a positive and supportive work environment

The company clearly understands its business goals and the role that its employees play in achieving those goals. By aligning its HR strategies with its business goals, Cisco has created a highly skilled and motivated workforce to help the company achieve its objectives.

These are just a few examples of strategic HRM in action. As you can see, strategic HRM is not just about providing good benefits and hiring the best talent. It’s about aligning your HR strategies with your business goals to create a highly skilled and motivated workforce to help you achieve your objectives.

Strategic Human Resource Management: Future Of A Thriving Business World

The strategic human resource management definition points to a promising future for those with the skills and knowledge to help businesses thrive. It is the foresighted planning of HR programs to align with and support an organisation’s business goals. 

As the business world changes and grows, so must the HR strategies employed by companies if they wish to remain competitive. With a proactive and strategic approach to HR management, businesses can stay ahead of the curve, ensuring that their workforce is adequately equipped to meet future challenges.

There are many different strategic human resource management examples, but common HR strategies under this umbrella include workforce planning, talent management, and succession planning. By taking a strategic approach to HR, businesses can ensure that they have the right mix of talent on staff, that employees are adequately developed and trained, and that there is a plan in place for continuity in the event of fundamental personnel changes.

No doubt, human resource is a booming field to enter right now. If you’re interested in a strategic human resource management definition and examples, many resources are available to help you get started. Our Post Graduate Certificate in Human Resource Management is a great place, to begin with.

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What is Strategic Human Resource Management? Definition and Examples

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