How can HR strategies help an organization to create competitive advantage?

Introduction

Strategic human resource management is the connection between a company’s human resources and its strategies, objectives, and goals. The aim of strategic human resource management is to:

• Advance flexibility, innovation, and competitive advantage.
• Develop a fit for purpose organizational culture.
• Improve business performance.

In order for strategic human resource management to be effective, human resources (HR) must play a vital role as a strategic partner when company policies are created and implemented. Strategic HR can be demonstrated throughout different activities, such as hiring, training, and rewarding employees.

Strategic HR involves looking at ways that human resources can make a direct impact on a company’s growth. HR personnel need to adopt a strategic approach to developing and retaining employees to meet the needs of the company’s long-term plans.

Why is SHRM important?

Companies are more likely to be successful when all teams are working towards the same objectives. Strategic HR carries out analysis of employees and determines the actions required to increase their value to the company. Strategic human resource management also uses the results of this analysis to develop HR techniques to address employee weaknesses.

The following are the benefits of strategic human resource management:

·       Increased job satisfaction.

·       Better work culture.

·       Improved rates of customer satisfaction.

·       Efficient resource management.

·       A proactive approach to managing employees.

·       Boost productivity.

Framework for Strategic Human Resource Management

Strategic Human Resource Management is key for the retention and development of quality staff. It is likely that employees will feel valued and want to stay with a company that places a premium on employee retention and engagement. Before you implement strategic human resource management, you will need to create a strategic HR planning process using the steps below:

1.    Develop a thorough understanding of your company’s objectives

2.    Evaluate your HR capability

3.    Analyze your current HR capacity in light of your goals

4.    Estimate your company’s future HR requirements

5.    Determine the tools required for employees to complete the job

6.    Implement the human resource management strategy

7.    Evaluation and corrective action

1. 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 of your company. You will 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.

2. 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 assess 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!

3. 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.

4. 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 is 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 is being sufficiently utilized.

·       Whether current HR personnel and practices can accommodate the company’s growth.

5. 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 is crucial to utilize workforce management software. This software manages important HR functions such as scheduling, holiday entitlement, and sick leave management.

Deputy provides the functionality to effortlessly manage your employees’ hours and time. This enables your employees to focus on the tasks identified in the strategic HR plan that have a direct impact on growing your company. Sign up for a free trial and see how Deputy can support your strategic human resources management.

6. Implement the human resource management strategy:

After the analysis and forecast of your company’s HR requirements have been completed, it is time to start the process of expanding your workforce and developing current workers to equip your company for future growth. You can achieve the implementation of your human resource management strategy by doing the following:

·       Start with the recruitment stage – At this point, HR professionals begin searching for candidates who possess skills that have been identified during the HR strategic planning process.

·       Organize a selection process – Interviews and other selection criteria take place at this time. Interview questions such as “what are your salary requirements?” and relevant tests will be used to assess whether the candidate is suitable to carry out the role.

·       Begin hiring applicants – Your Company will make the candidate a job offers after all appropriate checks have been carried out.

·       Design onboarding and training – Employee onboarding is a key determining factor as to whether an employee remains with a company. Comprehensive onboarding and training package must be put in place to increase employee retention. Once you have onboard your employees well, another important step to retaining them is to keep them engaged! Easier said than done, but our guide on employee engagement will help! You can download it by clicking the button below:

7. 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 identify areas for improvement. The review should be measured against whether changes are helping your company to achieve its goals. Corrective action must be taken if strategic human resource management is failing to meet its objectives.

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