Strategic Human Resource Management (SHRM) is an extension of the Human Resources (HR) department, but with a much wider role in the organisation. It is where HR professionals partake in the planning of overall business strategy while managing the most important resource of the organisation i.e. the people[i].
In addition to the usual HR functions such as onboarding and payroll management, strategic HR managers ensure that the employees have the right expertise to excel at their jobs and handle the demands of dynamic business strategies.
The Role of Strategic HR Managers
Strategic HR managers devise the incentives that motivate the workforce to achieve the company’s goals and success benchmarks. This helps reduce absenteeism and improve employees’ commitment to the company vision[ii].
The contribution of HR managers in the business strategy is to forecast market changes and prepare accordingly, and to identify the gaps in workforce training when a new strategy is being discussed.
Knowing about the changes in business strategies helps HR managers cultivate a pipeline of competent professionals who can contribute to the success of the business.
Strategic HR managers conduct technology training and other performance training sessions beforehand[iii]. It saves business costs and improves operational efficiency.
Strategic preliminary training is especially important for businesses where employees interact directly with the clients and the feedback from the customers affects the company’s profile and overall growth; such as hotel chains and supermarkets.
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The importance of SHRM
Strategic HR Management has changed the HR department’s role from a passive to a much more active role. This allows them to offer better support to the company[iv].
SHRM is about how you can grow a business much faster by linking HR and business strategies. It helps you create an organisational culture fit for your company goals and vision[v].
Michael Porter in his book Competitive Strategy mentioned how auto-motor companies in Japan scaled their business in the late 20th century because they understood the importance of SHRM[vi].
Those companies offered lifelong employment and other incentives to their employees and designed a business growth strategy while working with HR professionals.
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In conclusion
Overall the purpose of SHRM is to manage the efficiency of the employees by implementing various developmental activities and ensure that the company’s plans continue on the set trajectory of success. Strategic HR management identifies the strengths and weaknesses of the workforce and the potential threats and gaps in the strategy[vii].
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[i] https://www.digitalhrtech.com/strategic-human-resource-management/
[ii] https://courses.lumenlearning.com/principlesmanagement/chapter/16-2-the-changing-role-of-strategic-human-resource-management-in-principles-of-management/
[iii] https://www.indeed.com/career-advice/career-development/importance-of-training
[iv] https://www.iedunote.com/strategic-human-resource-management
[v] https://www.deputy.com/blog/7-steps-to-strategic-human-resource-management
[vi] https://www.smartsheet.com/strategic-human-resource-management
[vii] https://peoplemanagingpeople.com/articles/strategic-human-resource-management/