As companies grow and competition becomes more intense, organizations must find ways to attract and retain top talent while achieving their objectives. One way to achieve this is through strategic human resource management (SHRM). In this blog post, we will discuss what SHRM is, how it differs from traditional HR, and why it is beneficial for companies.
Table of contents-
- What is SHRM?
- Traditional HR vs. SHRM
- Benefits of SHRM for companies.
What is Strategic Human Resource Management?
Strategic human resource management (SHRM) is an approach where the HR professionals aim at proper alignment of human resource practices with the organization’s strategic goals along with objectives. You can take up an HR course to learn more about the field. The primary aim of SHRM is to improve the performance of an organization. It includes recruiting, selecting employees, providing training and development opportunities, implementing performance management system, and creating job descriptions and compensation plans aimed at supporting the organization’s mission and vision.
SHRM is founded on three major pillars:
- Human Capital-
SHRM recognizes that human capital is not just a resource but an organization’s assets that provide a competitive edge.
With proper planning, changes are achievable so long as they align with the needs and objectives of the organization.
- Business Competition-
The main aim of SHRM is to focus on ways that a firm can take an edge over its business competitors.
- SHRM is used for the creation of a framework that links the management of people and the development of practices that align with long-term goals.
- SHRM differs from HRM in the sense that it is involved in framing human resource strategies aimed at directing the efforts of the employees for alignment with the organizational goal.
- SHRM is practiced by HR departments when they work with other departments contained in an organization to facilitate the interpretation of the goals of each department and the development of strategies that align with the organizational goals.
- It takes each department to work together to reach the goals of an organization. In this sense, SHRM is a partner in organizational success.
Traditional HR vs. Strategic HR
|Traditional HR||Strategic HR|
|Administrative focus: primarily concerned with transactional activities such as payroll, benefits administration, compliance, and record keeping.||Business focus: aligning HR goals with organizational goals to create a competitive advantage.|
|Reactive approach: dealing with issues as they arise||Proactive approach: anticipating and addressing potential issues before they arise.|
|Cost center: viewed as an expense rather than an investment.||Value center: recognized as a strategic partner that adds value to the organization.|
|Limited scope: focused on day-to-day tasks related to employee management.||Broader scope: encompasses long-term planning, workforce development, talent management, and employee engagement.|
|Centralized decision-making: decisions made by the HR department without input from other departments.||Decentralized decision-making: HR department works closely with other departments to make decisions that align with the overall organizational strategy.|
|Emphasis on compliance: ensuring legal compliance with employment laws and regulations.||Emphasis on innovation: using HR strategies to drive innovation and create a culture of continuous improvement.|
|Reactive workforce management: responding to staffing needs as they arise.||Proactive workforce planning: anticipating future staffing needs and developing strategies to address them.|
|Employee relations focus: dealing with conflict resolution and maintaining a positive work environment.||Business partner focus: working with other departments to achieve overall organizational goals.|
Traditional HR focuses on basic HR functions like payroll, attendance, compliance, and benefits administration. While these tasks are crucial, they do not contribute towards the overall organizational goals. Strategic HR, meanwhile, utilizes the HR function to create a real competitive advantage. It identifies long-term strategies for HR, such as training programs, mentoring, diversity, and work-life balance policies, to achieve the organization’s goals.
Benefits of Strategic Human Resource Management for Companies-
- Promotes Growth and Expansion – SHRM enables companies to recruit and retain talent that can help the organization achieve growth strategies.
- Increases Efficiency – By aligning HR functions with business strategies, HR teams can save time and money in the recruitment, training, and retention of employees.
- Improves Employee Engagement – Employees are more engaged when they feel their work is valuable, and they have an opportunity for career advancement. SHRM helps create a culture of engagement that inspires employees to perform their best.
- Enhances Employer Branding – When HR practices are aligned with the organization’s goals, it can improve brand reputation among customers, investors, and employees.
Strategic human resource management is an essential approach for organizations
that seek to align their HR functions with their business strategy. A strategic HR department offers tremendous value to organizations through the recruitment and retention of top talent that can help drive business success. By fostering employee engagement, offering growth opportunities, and creating a conducive work environment, organizations can differentiate themselves from the competition and become an employer of choice.