Strategic Human Resource Management Guide

Strategic Human Resource Management Guide
Article by Zarah Ariola
Last Updated: March 10, 2023

Perhaps the most exciting time in running a business is when you're experiencing rapid growth, and it's time to start building up your team to keep up with the increasing workload; this is when strategic human resource management comes in.

Human resources play a vital role in your company's growth, as the team is dedicated to making sure the company's workforce is equipped and ready to take on the trade.

In turn, HR crafts policies and maintains practices to support and satisfy the staff while managing recruitment to support the expanding business.

Read on to learn how strategic human resource management benefits your enterprise.

Receive proposals from top HR outsourcing agencies. It’s free.
Agency description goes here
Agency description goes here
Agency description goes here

What Is Strategic Human Resource Management?

Strategic human resource management is the efficient application of human resource strategy as it aligns with the company's long-term goals. It is a process that includes the general functions you can expect from HR, such as organizing the workforce, developing the company's people and culture, and executing policies to help propel the business forward.

You're probably familiar with established corporations that have their HR department. That said, it is also an option for companies to partner with boutique staffing agencies and outsources their HR processes – particularly for growing small to medium-sized businesses.

Consider working with a managed service provider, also known as an MSP recruitment agency, for strategic workforce recruitment and temporary hiring. In particular industries, it's essential to work with technical recruiting specialists to reach the right job seekers for the relevant roles.

Why Is Strategic Human Resource Management Important?

At its core, strategic human resource management is about intentional action and making informed business decisions that benefit its growth in the context of how HR functions and supports the company's development.

As the business grows, having a dedicated HR team focused on managing people and culture within the company becomes invaluable. In smaller firms, you can expect leadership to focus on growth and develop strategies to move the company's goals forward.

One way to effectively motivate the company staff as they work to bolster the business's growth is to provide them with the proper support, invest in their career growth and foster their personal development.

This is one of the ways that strategic human resource management works to benefit the company. Truly effective management strategies can potentially push companies' growth on a global scale, leading to partnering with an employer of record who can eventually handle larger-scale HR management for your business.

How can strategic human resource management benefit your company?

  • Informed decision-making: As HR manages multiple, interconnected operations, it can be easy to lose track of the motivation behind specific processes. The benefit to strategic management is making informed decisions that push a task or project forward.
  • Quality hiring and recruitment: It costs a company up to 40% of an employee's salary to find and hire a qualified replacement. This makes it even more essential to engage efficiently and ensure the applicants are the right fit for the job and the company in the long run.
  • Data-based values: Establishing metrics is one of the significant benefits of employing strategic HR management. This applies from the planning phase while discussing with leadership the company's long-term goals to the retrospection phase when determining how effective strategies have been. It also works in between while keeping track of how well operations are functioning throughout a project.

What Are the Objectives of Strategic Human Resource Management?

The main objective of the strategic approach in HR management is resolving organizational challenges, establishing a hierarchy structure, streamlining business operations and addressing performance gaps.

These are the five most important goals of strategic human resource management (SHRM):

  1. Talent hiring and retention. One of the main SHRM goals is to develop plans for hiring and retaining talented and high-performing employees, which significantly contribute to companies' success.
  2. Continuous skill improvement. SHRM organizes training and courses that improve employees' soft and hard skills, which increases their performance and value to the work organization.
  3. Career program development. Clear and concise plans that promote benefits and salary increase possibilities motivate employees to develop their skills and progress. Recognizing and rewarding employee contributions encourages greater engagement and effectiveness.
  4. Performance management. SHRM evaluates the individual performance of every employee, emphasizing their contribution to the company's success. It also looks for opportunities to improve performance and encourages employees' progress.
  5. Company’s culture promotion. SHRM creates a positive work environment by promoting assertive and employee satisfaction-oriented communication.

Responsibilities in Strategic Human Resource Management

You can expect an ordinary HR manager to work on the following operations within a day:

  • Assist in developing company structure. Whichever structure works best for the company, HR will be responsible for implementing and recruiting to fulfill it, so HR and company leadership needs to collaborate in developing it.
  • Manage recruitment, training and employee satisfaction. HR is in charge of expanding the workforce and ensuring staff contentment. Knowing how satisfied employees inform the business how well they lead the company and how they can improve.
  • Keep track of progress towards company goals. HR connects leadership and its employees, so they are most informed about how projects are progressing within the company. A good indicator of how well a company is working towards its goals is how much HR has to work to hire more people while retaining current employees.
Get connected with the right HR agency for your project.

6 Steps to Strategic Human Resource Management

What does strategic HR management look like? You can expect this to vary from company to company, but there are general steps you can take in doing the same work for your own business. Whether you're working with an internal HR department or partnered with an outsourcing agency to help your business, below are some steps to achieving strategic management within your company structure.

Step #1: Align With Leadership on Business Plans and Objectives

Create long-term and short-term, actionable goals alongside the leadership to inform how HR can manage strategically.

Step #2: Analyze Company Structure and Organize Accordingly

SWOT analysis is one method you can use to analyze company and HR structure. Take into account what you and leadership learn together and how you believe you can work towards achieving the business's long-term goals.

Step #3: Use the HR Management Tools for Operations

HR functions in policy-making tasks, recruitment and onboarding, people and culture management, and engagement and communication within the company. As one of the main functions of a company, HR has a considerable number of tools that it can use in working with leadership to ensure the business is operating well.

Step #4: Implement Strategies to Execute Company Goals

While daily operations can look like business as usual, leadership and HR must constantly observe what's working well and what can be improved in working towards critical objectives. This can look like regular check-ins within the teams and gathering feedback from the staff on how operations can be done better.

Step #5: Establish KPIs to Measure Strategies' Efficiency

Taking into account the previous step, make significant, actionable steps that you can measure. This can be along the lines of performance metrics from within the teams in the company, an increase in hiring, an ideal employee turnover rate, and further interest and investment coming into the business. Use this data to continue planning and move forward accordingly.

Step #6: Apply Each Step Periodically

Much like anything in business, strategy in management is cyclical and requires frequent evaluation and adjustment. Entrepreneurship can be unpredictable outside of data, so be sure to track operations as much as needed and keep the company's goals in your decision-making.

While these steps can vary from company to company, the idea remains the same: Make intentional actions building up to the business's long-term goals. This guides your actions from within the team to the company's growth moving forward.

Looking for the best HR outsourcing companies?

Top 5 Tools for Strategic Management in Human Resources

Tools for strategic management in HR streamline business processes, organize employees' data and reduce errors. Here are some of our favorites:

1. BambooHR

BambooHR is a cloud-based platform, ideal for small and medium-sized businesses with up to 1,000 employees.

As their motto says, “HR is hard. BambooHR is easy,” this software facilitates and streamlines all HR-related tasks. It is valuable help during hiring and onboarding processes, as well as performance monitoring and payrolls. BambooHR keeps all employees' data in one secure database. It provides powerful reporting and analytics tools that reduce redundant tasks and free HR employees' time for more creative tasks.

Pricing: Essentials and Advantage plan prices are available at request.

2. Rippling

Rippling is one of the most user-friendly HR platforms. Based in the cloud, this HR software successfully manages from 2 to more than 2,000 employees’ onboarding, offboarding and changes. It provides US and global payroll features, talent and learning management and easy tracking of employee working times and attendances. Rippling automates workflow and provides professional employer organization (PEO) services.

Pricing: Starts at $8 per user. Get a personalized quote according to the services your HR department needs.

3. Oyster HR

Oyster is an excellent HR platform for companies that hire globally. It takes care of all HR tasks, from hiring and onboarding, tracking employees' hours and contractor conversion to full-time to signing in for health insurance and scheduling time off. It easily integrates with your favorite tools and provides case studies that help companies with global employment.

Additionally, Oyster's legal staff enables companies to hire globally without worrying about potential local regulations or compliance difficulties.

Pricing: $29/month in the Contractor plan; $499/year in the Employee plan; custom pricing for Scale plan.

4. Paycor

Paycor combines the best of HR and payroll platforms in one user-friendly solution. It automates routine tasks, mitigates compliance risks and makes your entire organization more productive, combining payroll, expense management, HR and analytics software. Paycor provides all of the critical advantages of an HR-focused digital solution, including talent management, employee experience and benefits administration.

Pricing: Custom quote available at request.

5. Gusto

Gusto is the best HR platform that automates small business workflows and prioritizes employee satisfaction. Gusto provides full-service payroll in minutes, monitors times and attendance, facilitates hiring and onboarding and takes care of employee benefits and talent management. It also provides insightful analytics and reporting.

Pricing: $40/month Simple plan; $60/month Plus plan; custom pricing for Premium plan.

How Human Resources Can Apply Strategic Management for You

With strategic human resource management, you can rely on a dedicated team to help you efficiently balance the company's goals while supporting the workforce that drives you forward.

Whether you're an established corporation or a small company just starting, taking inventory of your processes can help inform your business decisions moving forward. In a variety of options for HR management, agility is vital. It's essential to align with leadership to establish long-term goals, set actionable metrics to measure milestones, keep track of industry changes and adjust your plans accordingly.

Receive proposals from Top Staffing Agencies. It's free.
Subscribe to Spotlight Newsletter
Subscribe to our newsletter to get the latest industry news