Importance of Strategic HR Management And Steps To Follow


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HR management plays a crucial role in every organization, regardless of its size. It helps to boost the efficiency of staff, ultimately improving overall productivity.

Gone are the days when it only revolved around just hiring and firing employees. It has gone wider with time, centralizing the employees and work culture rather than just the business needs. The HR terms have evolved and helped the managers adopt a strategic approach in every operation.

The changing work conditions and business requirements made the HR professionals focus on creating strategies to fulfill future needs along with the current ones. So let’s dive deeper into the details:

What Is Strategic HR Management?

Strategic Human Resource Management (SHRM) is a modern world concept that connects an organization’s workforce to its core strategies, objectives, and goals. It emphasizes the following aspects:

  • Enabling practices that promote flexibility and give the organization a competitive advantage
  • Making the organization a cultural fit
  • Ensuring exceptional business performance

SHRM applies to every function an HR manager has to perform. Starting from the very first function, recruiting and training. SHRM does not just focus on filling vacancies and providing training to recruits. It also ensures that the employers focus on employee onboarding, providing them with a great experience. In addition, it creates an excellent company image in the employees’ minds and boosts their morale. The reason behind this is engaged employees stay retained for a long period, reducing the future hiring needs and costs of the business.

Similar to the recruitment process, SHRM enables efficient strategies for every process and contributes to long-term success.

Why Is Strategic Human Resource Management Important?

When applied properly, SHRM ensures that every person in the business is working together as a whole to reach the goals. Therefore, it is a foundation of a robust business structure, enabling greater chances to succeed.

Strategic HR analyses personnel and decides what has to be done to maximize their value to the business. It also uses the analytical results to develop techniques addressing staff weaknesses.

The importance of SHRM can be understood better by the following points:

Connects People With Organizational Goals

Aligning company goals with the employees seems easy, but it is not. The competitive labor market, digital disruption, and social changes are the most influential factors in determining the alignment of company goals.

The HR department creates a connection between an organization’s most precious asset – its people – and the strategic direction of the business. Business growth, an aligned workforce, engaging company culture, and competitive advantage are some of the most beneficial results of SHRM.

Enables A Balanced And Change-Ready Workplace

As organizations are moving their focus to digital transformation, they should ensure that the employees are equipped to work effectively in the changing times. Initiatives for learning and development will be crucial in educating employees about innovation and change in the workplace. The staff that is prepared for change will then embrace digital transformation and, in certain cases, even inspire or take the lead on change.

To build a balanced workforce, the selection of employees should be bias-free. Gender equality has been a must-have thing for companies in recent years. However, the role of HR has never been this strategic, thanks to the cultural revolution. Workforce balancing and friction elimination can leave a positive impact on the company culture and increase retention rates, boosting profitability.

Human resource managers do not just have to manage the employees’ count but also engage them in the workplace to acquire greater results. Employee engagement has been a growing need of organizations to increase productivity levels constantly. Therefore, corporate events have taken place to boost employee morale and productivity. The overall advantage for a business is customer satisfaction, reputation, and increased stakeholder value.

Sets The Right People In The Right Place

Along with digital transformation, effective leadership is also essential for a business to make the right decisions at the right time. SHRM enables effective leadership by focusing on the proactive approach of the managers rather than just filling vacancies at the leadership levels. It assesses the organizational goals and suggests earlier steps to get the right people in place.

Constant learning initiatives for employees and personality assessments help managers identify proper employees to put in leadership roles. It also encourages employees and makes them work towards excellent results.

Steps To Enable Effective SHRM In The Workplace

By going through the above-mentioned points, we can say that Strategic HRM is the key to employee retention and workforce development. Employees are likely to join or stay for the long term in a company that prioritizes its staff. Therefore, any organization must make efforts for SHRM. To implement it, prudent planning is necessary to make effective strategies. Here are some steps and points that can help:

1. Assess And Understand The Company Goals

The success of your strategies depends on the communication between your company goals and employees. Therefore, you must thoroughly understand the aims, objectives, and mission. Only then short and long-term goals can be effectively articulated to the personnel. Therefore, ensuring clear communication helps to formulate potent strategies for business growth.

2. Evaluate The HR Capabilities

Evaluating your current managers’ and employees’ capabilities will help you understand every individual’s contributions to the business goals. In addition, skill assessment tests outline the employees’ strengths and weaknesses. It also helps to identify the training needs and changes in the existing structure.

SHRM helps to establish an effective performance management structure in your company to develop the employees’ skills and enables learning initiatives for them.

3. Analyze The Current Capacity

Assessing the current HR department’s capacity will help you recognize the barriers to implementing a strategy or plan. It will also assist you in executing an actionable plan by leveraging opportunities and eliminating threats.

A strategic approach makes sure the employees are well-connected with their leaders. It also suggests necessary changes in the leadership structure to gain optimum effective outcomes.

4. Estimate The Future Requirements

After the assessments of employees and HR capabilities, it’s time to forecast the needs. So one can prepare the structure accordingly. Following are some points that help in forecasting the needs:

  • In order to meet your company’s future needs, a forecast must be made regarding the number of employees with the relevant abilities that will be needed.
  • Consider the personnel and expertise that are already on your hand to assist the business in achieving its objectives.
  • Evaluate and forecast the skills required in the current employees to undertake new responsibilities and roles.
  • Ensure that any employee or manager is not underutilized.
  • Check whether the current human resources and practices can accommodate the business growth and make necessary changes.

5. Determine The Tools To Complete The Job

Managers need to check whether the current tools used in different operations impact the employees’ skills or not. It helps to identify the gaps and outlines necessary changes that should be made. Overall, it results in a more organized workforce.

This step also assists the managers in making necessary changes in the business’s operating procedures. It identifies the current and future requirements and suggests changes in tools or practices.

6. Formulate And Implement The Strategy

After forecasting future needs and tools, it’s time to formulate effective strategies and implement them.

An efficient strategy is defined by the diverse criteria it covers in order to achieve business growth. Various factors should be considered while forming an HR strategy, so the business and staff goals both can be addressed. The labor market, business size, legal requirements, employee engagement, major reasons behind employee turnover, and organizational planning are the most significant factors that influence HR strategies.

Once the strategies are formulated, the most challenging stage of implementation comes. Therefore, you should consider the following points while implementing the strategies:

  • Start with the hiring process: Recruiters acquire candidates with skills identified during the strategic planning process.
  • Organize the selection process: Selection criteria other than skills can be checked while interviewing. For instance, personality assessments help to know whether the candidate will be a fit for the workplace or not.
  • Communicate with stakeholders: Besides managing human resources, HR also has to focus on the stakeholders’ concerns. Therefore, the manager should maintain clear and informative communication with all stakeholders when introducing any initiative.
  • Determine success metrics: The strategies’ effectiveness cannot be measured without metrics. Revenue, sales, retention rate, and employment targets are some of the most common metrics to measure the success of efforts.


In modern practices, Strategic HR Management is the most important component to ensure business growth. It is aimed at meeting the organizational needs and employees’ individual and collective needs. Not just the goals alignment, but it also outlines the potential mistakes of HRM and suggests necessary improvements that should be made. In many ways, SHRM delivers valuable advantages to businesses and drives them towards growth and sustainability.

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