What is Strategic Human Resource Management? Importance, Steps, Impact


When it comes to managing and allocating the workforce of the company, it’s significant that you should develop a proper HRM strategy. Today, we’ll discuss what is strategic human resource management (SHRM); its importance, steps, and impact.

What Strategic Human Resource Management (SHRM)? 

Strategic human resource management (SHRM) is the integration of the human resources of the company with its goals, objectives, and strategies. The purpose of SHRM is to;

  • Improve the performance of the business
  • Fit it with the company’s culture
  • Gain a competitive edge
  • Promote innovation

When it comes to implementing and creating HR policies, HR should play a key role as a partner in order to achieve the effectiveness of SHRM. You can demonstrate strategic HR through various activities like rewarding, offering benefits, training, and hiring employees.

SHRM comprises of analyzing the various functions of human resources that would make a direct impact on the growth of the company. The HR staff should follow the strategic approach towards developing and retaining employees so that they meet the long-term plans of the company.

It’s difficult to handle the HR problems for many companies because the business owners confuse various components of HR functions. It results in the form of ineffective decision-making that slows down the overall business and employees operation.

When it comes to practicing the SHRM in the HR department of the company, then it doesn’t work alone and solo. It works with other departments of the company in order to comprehend their goals and objectives and then develop a strategy aligning with the company’s goals. Resultantly, the goals of the HR department should support and reflect the goals of the company.

SHRM plays the role of a partner for the company’s success rather than considering legal compliance. SHRM exploits the opportunities and employs talent of the HR department, and strengthens the other departments of the company.

Importance of SHRM

When all the teams and departments are collaborating towards achieving the common goal, then it amplifies the chances of achieving the success of the company. SHRM conducts an analysis of employees and finds out what actions the company should take in order to improve its value. However, it also employs the result of analysis to create HR policies to address the weaknesses of employees. Some of the main benefits of SHRM are as follows;

  • Improving the productivity
  • Using a proactive approach to manage employees
  • Managing resources efficiently
  • The customer satisfaction rate is higher
  • Better workplace culture
  • Amplifying the job satisfaction level

Steps to Strategic Human Resource Management 

SHRM plays a significant role in developing and retaining the quality workforce in the company. Employees would stay with the company if they feel being valued and invest in employees’ retention. You should develop an HR planning process while implementing the SHRM, some of these steps are as follows;

  • Have a thorough understanding to develop the objectives of the company
  • Evaluating the HR capabilities
  • Analyzing your existing HR capacity relevant to your goals
  • Finding the required tools that would assist them to finish the job
  • Implementing the HRM strategy
  • Evaluating and taking the correct course of actions

SHRM is significant for every company. It doesn’t mean that they should specific number of employees in order to implement the principles of SHRM. However, if you want the growth of your business, then you should link with SHRM. Some businesses outsource SHRM because they don’t sufficient HR capabilities to do so.

The thing about SHRM is that it offers all types of services relevant to the HR functions including the development of HRM strategy. The services of SHRM would lift your burden away from strategic and operational management and assist them in the growth of their business.

How to Make Impact with SHRM

Now, the question is how to make an impact on your business by using strategic human resource management (SHRM). Some of the main tips are as follows;

Develop HR Strategy Relevant to Business

The first thing you should do is to develop such SHRM strategy that is relevant to your business. It means that you have to broaden your HR perspective and comprehend the overall business perspective of the company. Your HR strategy should be in alignment and supportive of the overall business strategy. For instance, if the business strategy is to achieve cost leadership, then HR strategy should be relevant to it.

Aligning HR Activities

After developing the HR strategy, next, you should align all the HR activities relevant to the strategy. They would comprise of recruiting, hiring, selecting, performance evaluation, compensation, and others. For instance, you create a list of required traits after the performance evaluation and look for the same traits in the new hiring.

You should also develop those traits in your existing employees. It allows you to see what business strategy plans to achieve through learning and development, rewards, performance evaluation, and recruitment this way.

Emphasis on Data

Data and metrics would help you to measure and evaluate your performance. You can track the company’s performance by analyzing the KPIs (key performance indicators). Marketing and financial KPIs are the major part of a company’s metrics. Management and BOD make their decisions based on the

Pay heed to Other HR Obligations

While implementing the SHRM, you shouldn’t avoid the other important functions and activities of HR. They comprise of engaging and developing employees, the efficiency of administration, enabling change, and HR strategy. However, the problem arises when putting over-emphasis on SHRM, then you forget to focus on other HR responsibly.

Outside-in Approach

You should know the customers of the HR department. They could be customers, shareholders, stakeholders, and employees sometimes. It helps the company to know how it can perform its job better for external stakeholders. The external stakeholders could be communities, agencies, government, suppliers, investors, and customers.

Conclusion: What is Strategic Human Resource Management? Importance, Steps, Impact

After an in-depth study of what is strategic human resource management; its importance, steps, and impact; we’ve realized that SHRM is significant for the growth of your business. If you’re developing the strategic HRM, then you should keep in mind its steps and impact.

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