By: Liz Sheffield
Today’s leaders, human resource (HR) professionals, and business investors understand that having the right approach to talent is essential to move any organization forward. According to Gartner, the percentage of companies that talk about talent during earnings calls has increased by 25% in the last decade. When it comes to the strategic management of a business, It’s widely understood that strategic human resource management is a requirement for a business to succeed.
But strategic HR management practices haven’t always been the norm.
“We used to be about compliance, party planning, and benefits…but the good [companies], the smart ones, see HR as a strategic partner,” a senior vice president of human resources told the Society for Human Resource Management (SHRM).
In place of parties and compliance checklists, organizations now have a strategic human resource management process that includes the development and execution of a comprehensive approach to people. In turn, this type of strategic HR management enables organizations to meet market demands and prepare for anticipated growth.
What Is Strategic HR Management and Why Is It Important?
In response to the question, “What is strategic HR?” there are many possible answers. But at the core, strategic HR exists in companies that focus on employees and organizational culture. To realize their potential and experience maximum growth, these companies understand they must invest in their people and their culture.
The most successful HR strategies link people’s programs to business results. Strategic HR occurs through many different processes, including those related to recruiting, developing, and retaining employees. As you evaluate a strategy for HR in your company, keep these HR areas of practice in mind:
- Organizational design: Create a structure that supports the business.
- Compensation: Stay competitive and equitable with pay and benefits.
- Recruiting and staffing: Offer a work environment that people want to join.
- Professional development: Provide opportunities for employees to learn and grow.
- Culture: Ensure decisions and behaviors align with the desired culture.
- Communication: Share information across the organization in a way that engages all employees.
- Data analysis: Make people-related decisions based on data.
The value of strategic HR is that it looks at how human resources can positively impact a company’s growth. HR leaders and professionals are in a unique position to hire, develop, and retain the employees who will assist the organization in implementing and meeting its long-term business strategy.
When there is a strategic human resource management process in place, organizations benefit with happier customers, better management of company resources, proactive performance management, and better overall work culture.
Real-World Examples of Strategic HR
One way to better understand the value of strategic HR practices is to look at the companies which are recognized on a best place to work list or are known for high levels of employee engagement. Their strategic human resource management process allows them to make the most of their talent investments. The following are three strategic human resource management examples.
Companies on the Best Workplaces in Retail, including CarMax, consistently demonstrate a commitment to seeking out employee feedback and listening to what they have to say. The right employee communication software can facilitate the process and make it easy for employees to contribute.
“Over the eight years I’ve worked at CarMax, I’ve seen us change our tools and our process. We run a cleaner, safer, and more efficient store all because of employee feedback. Our opinions make a difference and we are happy,” explained one employee.
Brewing company New Belgium gets strategic about HR by tying their service award program to the company’s culture. Depending on their years of service, employees are eligible to receive a cruiser bike, sabbaticals, or a trip to Belgium. This strategic program is an investment that earns employee loyalty and retains top talent. These rewards are part of the overall business and HR strategy.
“We genuinely care about the people who work here. And we want that to show. In the benefits we offer, in the culture we have, and how we treat each other every day,” New Belgium’s director of HR told Forbes.
In addition to offering benefits, some employers offer onsite access to healthcare providers. Discover is one of several companies that offer this service, according to Glassdoor. At some of their offices, Discover offers onsite health clinics, fitness centers, and Employee Assistance Program counselors. These competitive benefits offerings enhance workplace productivity and reduce health care costs. They also serve as a strategic tool for recruiting new employees.
These three examples illustrate the power of innovative HR solutions. If you want your organization to succeed through your people, you need strategic HR management.
Strategic human resource management is important for organizations of every size. Even if your business is just in the early days, it’s better to think about your people strategy earlier rather than later. Part of strategic management includes addressing the administrative details. Be sure to include compliance with rules, laws, and regulations as part of your strategy for HR. As you look at how to implement strategic HR, look for technology that provides HR administration, talent acquisition, and employee engagement solutions. Strategic human resource management that’s backed by powerful technology solutions makes for a dynamic organization that puts its people power to use.