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The best organizations know how to get the most out of every department and employee – and that definitely includes HR professionals. An HR department that simply keeps your company running and reacts to issues as they arise isn’t enough. Reaching and sustaining a high level of success requires HR personnel who plan and execute initiatives that align with your most pressing organizational goals and needs, while ensuring that employee input is actively solicited and acted upon before issues become too big to handle.
Strategic human resource management is a proven way to maximize the value of HR and elevate your entire business in the process. Let’s take a look at what strategic human resource management involves, how it differs from traditional HR practices, and the steps you can take to realize the benefits of SHRM at your own organization.
What is strategic human resource management — and why is it important?
Strategic human resource management (SHRM) is a practice that aligns every aspect of HR with an organization’s goals. SHRM creates a competitive advantage for companies through a focus on employees, encouraging organizations to view team members as valuable assets that can drive organizational wins — if they’re empowered to succeed. SHRM involves everything from talent development, to workforce planning, to employee recognition programs. When done right, SHRM makes your business more adaptable and resilient, modernizing HR practices to keep pace with emerging trends and evolving employee needs.
SHRM vs. HRM
Strategic human resource management is a significant shift from traditional human resource management (HRM). HRM revolves around administrative functions like payroll, recruitment, and compliance with labor laws and regulations. Its primary focus is on day-to-day operations and ensuring that HR tasks are carried out efficiently and in accordance with relevant policies and established processes.
SHRM goes beyond these standard HR functions to ensure that all HR practices contribute to your organization’s most important objectives. SHRM considers the broader implications of HR decisions on your organization’s outlook. For example, rather than simply filling vacant positions as they arise, SHRM involves workforce planning to anticipate future recruiting needs based on your company’s growth projections and anticipated market demands. Similarly, while HRM may focus on training employees to meet immediate job requirements, SHRM emphasizes ongoing talent development to build a skilled and adaptable workforce capable of achieving strategic objectives now and going forward.
Real-world examples of strategic human resource management
Organizations around the globe have used SHRM to maintain a competitive advantage. These three examples highlight how companies across industries can leverage SHRM.
1. Google’s employee perks and work culture
Google is known for its innovative approach to HR management, and its employee-centric practices exemplify the principles of SHRM. Google’s robust employee perks and attractive work culture are strategically designed to attract, retain, and engage top talent. From gourmet meals and on-site wellness services to flexible work arrangements and generous parental leave policies, Google’s benefits package reflects a deep understanding of employee needs and preferences. By prioritizing employee well-being and satisfaction, Google fosters a positive work environment that keeps employees motivated and productive. A focus on the employee experience enhances Google’s employer brand as well, increasing its edge when it comes to recruitment and retention in the highly competitive tech industry.
2. Netflix’s high-performance culture and talent management
Netflix’s approach to talent management is another great instance of SHRM done right. It prioritizes hiring and retaining top performers who embody the company’s culture and values. Netflix did away with traditional performance appraisal systems and emphasizes “freedom and responsibility,” granting employees the autonomy to make decisions and take control of their work. This approach attracts individuals who thrive in a flexible environment and fosters a culture of accountability. With its talent management practices, Netflix has built a world-class, innovative team of employees who are ready to jump on new opportunities and continually drive business success.
3. Toyota’s Kaizen philosophy and employee involvement
Toyota’s long-standing success as a global leader in the automotive industry is due in part to its strategic approach to human resource management, rooted in the philosophy of Kaizen, or continuous improvement. Every employee is encouraged to identify and implement small, incremental improvements in their work processes and practices. This bottom-up approach to innovation creates a culture of problem-solving that boosts operational efficiency and product quality. By showing that it values the input and expertise of its workforce, Toyota fosters a sense of ownership among employees that keeps them engaged and agile in the face of challenges.
4 steps to implementing SHRM
Successfully adopting strategic human resource management requires a structured approach that integrates SHRM principles into your organization’s existing HR processes. Here are four key steps you can follow to implement SHRM at your company.
1. Analyze your organization’s needs
SHRM relies on a thorough understanding of your organization’s current and future needs. By analyzing your company’s strengths, weaknesses, opportunities, and threats (SWOT) — together with external factors like industry trends — you can identify areas where SHRM initiatives can add the most value. You should solicit input from stakeholders at every level of your organization as well to obtain insights into employee perceptions, goals, and expectations. This data can serve as a foundation for developing HR strategies that are both aligned with business objectives and responsive to the needs of your workforce.
2. Define clear HR objectives
Once you’ve conducted a thorough organizational analysis, it’s time to define HR objectives that dovetail with your organization’s goals. If your company is prioritizing expansion into new markets, your HR objectives may include recruiting and training employees with language skills and cultural competencies relevant to those areas. If your organization instead wants to enhance product innovation, your HR objectives might focus on talent acquisition strategies to attract individuals with specialized skills or domain expertise.
Once HR objectives are defined, establish key performance indicators (KPIs) to measure progress and success. The OKR (objectives and key results) framework is a great way to ensure that your KPIs are measurable and relate to your goals. Your people leaders can then track the progress of your SHRM program in real time and refine it as necessary.
3. Develop tailored SHRM strategies and initiatives
To reach the goals your organization has set for its SHRM program, it must translate those objectives into actionable initiatives that address specific needs and challenges. HR strategies to enhance employee engagement and motivation, for instance, would include providing frequent rewards and recognition to all employees, implementing flexible work arrangements, and developing an exceptional organizational culture where all team members feel like they belong. By tailoring your HR initiatives to address your most pressing organizational needs, you can maximize the impact of SHRM and drive concrete, positive outcomes for both employees and your business as a whole.
You should craft your SHRM initiatives with your organization’s culture and values in mind to ensure they feel authentic to your workforce. Start by defining and communicating your company’s mission statement and its core values in concise, understandable language — if you haven’t already — and then embed these ideals across all your HR practices. If your organization emphasizes collaboration and teamwork, your SHRM initiatives could include team-based performance evaluations, cross-functional projects, and awards that celebrate collective achievements. Aligning your HR practices with your company’s core values contributes to a cohesive work environment where employees are organically motivated to realize your organization’s vision.
4. Implement HR technology
The breadth and scale of SHRM means that your company should rely on modern HR platforms to avoid overwhelming and confusing both HR professionals and other employees. To match the wide-ranging nature of SHRM, start with an HR solution with capabilities that address every aspect of the employee experience. Look for a platform that includes employee engagement tools along with data collection, reporting, and analytics features that let you keep track of employee sentiment in real time. Ensure it includes employee recognition capabilities that make showing appreciation fun and engaging as well, along with a rewards catalog that makes it possible for every employee to receive gifts and experiences that actually excite them.
Enable strategic human resource management today
The Achievers Employee Experience Platform is designed to help you implement SHRM initiatives that meet the needs of your changing workforce. It starts with Achievers Listen, a voice of the employee solution that lets your organization quickly uncover and act on employee insights, thanks to a digital feedback toolkit backed by workplace science. And with Achievers Recognize and Reward, you can leverage the primary driver of employee engagement — recognition — by empowering every team member to show their appreciation anytime, anywhere through messages of thanks and a rewards marketplace with over 3 million options to choose from.
See how the Achievers Employee Experience Platform can streamline the path to SHRM at your company with a free demo.
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