Strategic Human Resource Management

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.

HR plays 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 can benefit your enterprise.

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What is Strategic Human Resource Management?

Strategic Human Resource Management is the efficient application of HR operations 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.

Strategic management is essential for any business to consider the quality over quantity of operations thoroughly. Consciously making decisions for the bigger picture of the industry makes HR establish more efficient processes and serve the company more effectively and its workforce in the long run. Having a solid familiarity with the company's goals can inform these decisions, resonating with how employees begin their career within the business, how they, in turn, are motivated to sustain the industry, and how HR balances the company and the workforce's needs for the benefit of the business.

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 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.

HR operations comprise the intricate balance between the company's goals and its workforce's needs. 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.

Think of the small details in the bigger picture: 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. Which 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 management in HR. 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.

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.
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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 for 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: Select and use the appropriate 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: Craft and 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, as needed

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.

19 Tools for Strategic Management in Human Resources

There's a wide variety of options for HR management to help make the process more efficient for your team. Below are some strategic management tools you can consider integrating into your process:

Access

HR, accounting and payroll management

Free trial, paid plan starts at $21.24/month

Airtable

Collaboration and team engagement platform

Free plan, paid plans start at $10/user/month

Bambee

HR management outsourcing service

Paid plans start at $99/month for four users

Caroo

Employee engagement and gifting

Pricing starts at $26

Google G Suite

Collaboration, productivity, and managerial apps

Free trial, basic plan: $5.50/user/month, business plan: $8.28/user/month

Know Your Team

Employee engagement and team communications

Free trial, paid plan starts at $30/user/month

Lattice

Team engagement and productivity

Free trial, paid plan starts at $9/user/month

Lessonly

Employee onboarding and training

The basic plan starts at $300/month for 20 learners

Monday

Project management and productivity platform

Free plan, paid plans start at $9/user/month

Papaya Global

Payroll and productivity automation

Starts at $20/employee/month

People HR

Employee recruitment and onboarding

Free trial, paid plans start at $2.65/user/month

Personio

Employee engagement and productivity platform

Free trial option, then it's $99.00/month

Process Street

HR operations, team engagement, personal productivity

Free plan and a free trial, paid plans start at $12.50/user/month

Slack

Team all-in-one communications app

A free version, paid plan, starts at $6.67/month

Workbright

Recruitment and onboarding platform

The plan starts at $178/month for 100 employees

Xobin

Recruitment evaluation software

Free trial, paid version starts at $99.00/month

Zapier

Business and workflow automation

Free plan, starter plan at $19.99/month, professional plan at $49/month.

Zenefits

HR operations platform

The monthly plan starts at $10/employee/month, the annual plan at $8/employee/month

Zoom

Communications and managerial relations

The free basic plan and paid plans start at $14.99/user/month

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 strategic 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.

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