Before we try to explain the meaning of strategic HRM, let us first define the terms ‘strategy’ and ‘strategic management’. The term ‘strategy’ is widely used in and presupposes importance. In the words of the Oxford Concise Dictionary, strategy means ‘generalship’. Thus, strategy is associated with the long-term decisions taken at the top of the enterprise. The original literary meaning of strategy is ‘the art and science of directing military forces’.
The term strategy is frequently being used in the present-day corporate world. It envisages thinking ahead to survive and grow in a highly competitive environment’. Strategy is concerned with determining which option will provide maximum benefits. According to Jauch and Glueck.
“Strategy is a unified, comprehensive and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organization”.
STEPS OF STRATEGIC HRM
Seven steps to strategic human resource management
- Develop a thorough understanding of your company’s objectives
Since the success of strategic HR is dependent on how well it links to your company’s goals, you need to have a thorough understanding of your aims, objectives, and mission. You’ll need to be able to articulate both your short and long-term plans for growth to the relevant HR personnel. Ensuring clear communication of your company’s goals will make it easier for HR personnel to formulate an effective resource management strategy.
- Evaluate your HR capability
Evaluating your current HR capabilities will enable you to understand the employees you have and how they contribute to fulfilling your goals and objectives. Additionally, you should also undertake a skills inventory for every employee. Skills inventories help you to discover which employees are experts in particular areas. It also helps you to identify the employees who have an interest in being trained in a particular aspect of your company. A great time to asses skills is during a performance review. However, the traditional performance review is dying. Check out our guide on how to conduct an efficient and results driven performance review while obtaining the skills inventory you need from your employees!
- Analyze your current HR capacity in light of your goals
An assessment of your HR capacity will help you to recognize barriers and implement a plan of action to capitalize on opportunities and effectively deal with threats. Strategic HR personnel will analyze the number of employees as well as their skills and will work with senior leadership to identify ways to better equip employees to serve the needs of your company.
- Estimate your company’s future HR requirements
After an analysis of your company’s employees and skills has been done in relation to your objectives, it’s time to forecast your HR needs. The forecast should be done in relation to:
- Demand – A prediction needs to be made in relation to the number of employees with the associated skills that will be required in order for your company’s future needs to be met.
- Supply – Looks at the employees and skills that are currently available to help your company achieve its strategic goals.
Forecasting your company’s future HR requirements also determines the following:
- New jobs and roles required to secure the future of the company.
- Skills required by current employees to undertake the responsibilities of new jobs and roles.
- Whether your employees’ expertise are being sufficiently utilized.
- Whether current HR personnel and practices can accommodate the company’s growth.
- Determine the tools required for employees to complete the job
HR personnel need to liaise with the appropriate departments to find out how the tools used by employees impact on their ability to perform their roles. For example, an audit of hardware and software can be undertaken jointly with the I.T department to identify gaps in tools that will facilitate a more organized workforce. For example, where a company employs hourly staff, it’s crucial to utilize workforce management software. This software manages important HR functions such as scheduling, holiday entitlement, and sick leave.
- Implement the human resource management strategy
After the analysis and forecast of your company’s HR requirements have been completed, it’s time to start the process of expanding your workforce and developing current workers to equip your company for future growth.
- Evaluation and corrective action
HR personnel should decide on a timeline to carry out a strategic HR management review. This review will track the progress made and also identify areas for improvement. The review should be measured against whether changes are helping your company to achieve their goals. Corrective action must be taken if strategic human resource management is failing to meet its objectives.