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2.1 Strategic Planning

Learning objectives.

  • Explain the differences been HRM and personnel management.
  • Be able to define the steps in HRM strategic planning.

In the past, human resource management (HRM) was called the personnel department. In the past, the personnel department hired people and dealt with the hiring paperwork and processes. It is believed the first human resource department was created in 1901 by the National Cash Register Company (NCR). The company faced a major strike but eventually defeated the union after a lockout. (We address unions in Chapter 12 “Working with Labor Unions” .) After this difficult battle, the company president decided to improve worker relations by organizing a personnel department to handle grievances, discharges, safety concerns, and other employee issues. The department also kept track of new legislation surrounding laws impacting the organization. Many other companies were coming to the same realization that a department was necessary to create employee satisfaction, which resulted in more productivity. In 1913, Henry Ford saw employee turnover at 380 percent and tried to ease the turnover by increasing wages from $2.50 to $5.00, even though $2.50 was fair during this time period (Losey, 2011). Of course, this approach didn’t work for long, and these large companies began to understand they had to do more than hire and fire if they were going to meet customer demand.

More recently, however, the personnel department has divided into human resource management and human resource development, as these functions have evolved over the century. HRM is not only crucial to an organization’s success, but it should be part of the overall company’s strategic plan, because so many businesses today depend on people to earn profits. Strategic planning plays an important role in how productive the organization is.

Table 2.1 Examples of Differences between Personnel Management and HRM

Most people agree that the following duties normally fall under HRM. Each of these aspects has its own part within the overall strategic plan of the organization:

  • Staffing. Staffing includes the development of a strategic plan to determine how many people you might need to hire. Based on the strategic plan, HRM then performs the hiring process to recruit and select the right people for the right jobs. We discuss staffing in greater detail in Chapter 4 “Recruitment” , Chapter 5 “Selection” , and Chapter 6 “Compensation and Benefits” .
  • Basic workplace policies. Development of policies to help reach the strategic plan’s goals is the job of HRM. After the policies have been developed, communication of these policies on safety, security, scheduling, vacation times, and flextime schedules should be developed by the HR department. Of course, the HR managers work closely with supervisors in organizations to develop these policies. Workplace policies will be addressed throughout the book.
  • Compensation and benefits. In addition to paychecks, 401(k) plans, health benefits, and other perks are usually the responsibility of an HR manager. Compensation and benefits are discussed in Chapter 6 “Compensation and Benefits” and Chapter 7 “Retention and Motivation” .
  • Retention. Assessment of employees and strategizing on how to retain the best employees is a task that HR managers oversee, but other managers in the organization will also provide input. Chapter 9 “Successful Employee Communication” , Chapter 10 “Managing Employee Performance” , and Chapter 11 “Employee Assessment” cover different types of retention strategies, from training to assessment.
  • Training and development. Helping new employees develop skills needed for their jobs and helping current employees grow their skills are also tasks for which the HRM department is responsible. Determination of training needs and development and implementation of training programs are important tasks in any organization. Training is discussed in great detail in Chapter 9 “Successful Employee Communication” , including succession planning. Succession planning includes handling the departure of managers and making current employees ready to take on managerial roles when a manager does leave.
  • Regulatory issues and worker safety. Keeping up to date on new regulations relating to employment, health care, and other issues is generally a responsibility that falls on the HRM department. While various laws are discussed throughout the book, unions and safety and health laws in the workplace are covered in Chapter 12 “Working with Labor Unions” and Chapter 13 “Safety and Health at Work” .

In smaller organizations, the manager or owner is likely performing the HRM functions (de Kok & Uhlaner, 2001). They hire people, train them, and determine how much they should be paid. Larger companies ultimately perform the same tasks, but because they have more employees, they can afford to employ specialists, or human resource managers, to handle these areas of the business. As a result, it is highly likely that you, as a manager or entrepreneur, will be performing HRM tasks, hence the value in understanding the strategic components of HRM.

HRM vs. Personnel Management

Human resource strategy is an elaborate and systematic plan of action developed by a human resource department. This definition tells us that an HR strategy includes detailed pathways to implement HRM strategic plans and HR plans. Think of the HRM strategic plan as the major objectives the organization wants to achieve, and the HR plan as the specific activities carried out to achieve the strategic plan. In other words, the strategic plan may include long-term goals, while the HR plan may include short-term objectives that are tied to the overall strategic plan. As mentioned at the beginning of this chapter, human resource departments in the past were called personnel departments. This term implies that the department provided “support” for the rest of the organization. Companies now understand that the human side of the business is the most important asset in any business (especially in this global economy), and therefore HR has much more importance than it did twenty years ago. While personnel management mostly involved activities surrounding the hiring process and legal compliance, human resources involves much more, including strategic planning, which is the focus of this chapter. The Ulrich HR model, a common way to look at HRM strategic planning, provides an overall view of the role of HRM in the organization. His model is said to have started the movement that changed the view of HR; no longer merely a functional area, HR became more of a partnership within the organization. While his model has changed over the years, the current model looks at alignment of HR activities with the overall global business strategy to form a strategic partnership (Ulrich & Brockbank, 2005). His newly revised model looks at five main areas of HR:

  • Strategic partner. Partnership with the entire organization to ensure alignment of the HR function with the needs of the organization.
  • Change agent. The skill to anticipate and respond to change within the HR function, but as a company as a whole.
  • Administrative expert and functional expert. The ability to understand and implement policies, procedures, and processes that relate to the HR strategic plan.
  • Human capital developer. Means to develop talent that is projected to be needed in the future.
  • Employee advocate . Works for employees currently within the organization.

According to Ulrich (Ulrich, 2011), implementation of this model must happen with an understanding of the overall company objectives, problems, challenges, and opportunities. For example, the HR professional must understand the dynamic nature of the HRM environment, such as changes in labor markets, company culture and values, customers, shareholders, and the economy. Once this occurs, HR can determine how best to meet the needs of the organization within these five main areas.

To be successful in writing an HRM strategic plan, one must understand the dynamic external environment

To be successful in writing an HRM strategic plan, one must understand the dynamic external environment.

HRM as a Strategic Component of the Business

(click to see video)

David Ulrich discusses the importance of bringing HR to the table in strategic planning.

Keeping the Ulrich model in mind, consider these four aspects when creating a good HRM strategic plan:

  • Make it applicable. Often people spend an inordinate amount of time developing plans, but the plans sit in a file somewhere and are never actually used. A good strategic plan should be the guiding principles for the HRM function. It should be reviewed and changed as aspects of the business change. Involvement of all members in the HR department (if it’s a larger department) and communication among everyone within the department will make the plan better.
  • Be a strategic partner. Alignment of corporate values in the HRM strategic plan should be a major objective of the plan. In addition, the HRM strategic plan should be aligned with the mission and objectives of the organization as a whole. For example, if the mission of the organization is to promote social responsibility, then the HRM strategic plan should address this in the hiring criteria.
  • Involve people. An HRM strategic plan cannot be written alone. The plan should involve everyone in the organization. For example, as the plan develops, the HR manager should meet with various people in departments and find out what skills the best employees have. Then the HR manager can make sure the people recruited and interviewed have similar qualities as the best people already doing the job. In addition, the HR manager will likely want to meet with the financial department and executives who do the budgeting, so they can determine human resource needs and recruit the right number of people at the right times. In addition, once the HR department determines what is needed, communicating a plan can gain positive feedback that ensures the plan is aligned with the business objectives.
  • Understand how technology can be used. Organizations oftentimes do not have the money or the inclination to research software and find budget-friendly options for implementation. People are sometimes nervous about new technology. However, the best organizations are those that embrace technology and find the right technology uses for their businesses. There are thousands of HRM software options that can make the HRM processes faster, easier, and more effective. Good strategic plans address this aspect.

HR managers know the business and therefore know the needs of the business and can develop a plan to meet those needs. They also stay on top of current events, so they know what is happening globally that could affect their strategic plan. If they find out, for example, that an economic downturn is looming, they will adjust their strategic plan. In other words, the strategic plan needs to be a living document, one that changes as the business and the world changes.

A woman using a desktop computer

A good HRM strategic plan acknowledges and addresses the use of software in HRM operations.

Howard Russell – Lefroy House – CC BY-NC-ND 2.0.

Human Resource Recall

Have you ever looked at your organization’s strategic plan? What areas does the plan address?

The Steps to Strategic Plan Creation

As we addressed in Section 2.1.2 “The Steps to Strategic Plan Creation” , HRM strategic plans must have several elements to be successful. There should be a distinction made here: the HRM strategic plan is different from the HR plan. Think of the HRM strategic plan as the major objectives the organization wants to achieve, while the HR plan consists of the detailed plans to ensure the strategic plan is achieved. Oftentimes the strategic plan is viewed as just another report that must be written. Rather than jumping in and writing it without much thought, it is best to give the plan careful consideration.

The goal of Section 2 “Conduct a Strategic Analysis” is to provide you with some basic elements to consider and research before writing any HRM plans.

Conduct a Strategic Analysis

A strategic analysis looks at three aspects of the individual HRM department:

Understanding of the company mission and values. It is impossible to plan for HRM if one does not know the values and missions of the organization. As we have already addressed in this chapter, it is imperative for the HR manager to align department objectives with organizational objectives. It is worthwhile to sit down with company executives, management, and supervisors to make sure you have a good understanding of the company mission and values.

Another important aspect is the understanding of the organizational life cycle. You may have learned about the life cycle in marketing or other business classes, and this applies to HRM, too. An organizational life cycle refers to the introduction, growth, maturity, and decline of the organization, which can vary over time. For example, when the organization first begins, it is in the introduction phase, and a different staffing, compensation, training, and labor/employee relations strategy may be necessary to align HRM with the organization’s goals. This might be opposed to an organization that is struggling to stay in business and is in the decline phase. That same organization, however, can create a new product, for example, which might again put the organization in the growth phase. Table 2.2 “Lifecycle Stages and HRM Strategy” explains some of the strategies that may be different depending on the organizational life cycle.

Understanding of the HRM department mission and values. HRM departments must develop their own departmental mission and values. These guiding principles for the department will change as the company’s overall mission and values change. Often the mission statement is a list of what the department does, which is less of a strategic approach. Brainstorming about HR goals, values, and priorities is a good way to start. The mission statement should express how an organization’s human resources help that organization meet the business goals. A poor mission statement might read as follows: “The human resource department at Techno, Inc. provides resources to hiring managers and develops compensation plans and other services to assist the employees of our company.”

A strategic statement that expresses how human resources help the organization might read as follows: “HR’s responsibility is to ensure that our human resources are more talented and motivated than our competitors’, giving us a competitive advantage. This will be achieved by monitoring our turnover rates, compensation, and company sales data and comparing that data to our competitors” (Kaufman, 2011). When the mission statement is written in this way, it is easier to take a strategic approach with the HR planning process.

  • Understanding of the challenges facing the department. HRM managers cannot deal with change quickly if they are not able to predict changes. As a result, the HRM manager should know what upcoming challenges may be faced to make plans to deal with those challenges better when they come along. This makes the strategic plan and HRM plan much more usable.

Table 2.2 Lifecycle Stages and HRM Strategy

Source: Seattle University Presentation , accessed July 11, 2011, http://fac-staff.seattleu.edu/gprussia/web/mgt383/HR%20Planning1.ppt .

Identify Strategic HR Issues

In this step, the HRM professionals will analyze the challenges addressed in the first step. For example, the department may see that it is not strategically aligned with the company’s mission and values and opt to make changes to its departmental mission and values as a result of this information.

Many organizations and departments will use a strategic planning tool that identifies strengths, weaknesses, opportunities, and threats (SWOT analysis) to determine some of the issues they are facing. Once this analysis is performed for the business, HR can align itself with the needs of the business by understanding the business strategy. See Table 2.3 “Sample HR Department SWOT Analysis for Techno, Inc.” for an example of how a company’s SWOT analysis can be used to develop a SWOT analysis for the HR department.

Once the alignment of the company SWOT is completed, HR can develop its own SWOT analysis to determine the gaps between HR’s strategic plan and the company’s strategic plan. For example, if the HR manager finds that a department’s strength is its numerous training programs, this is something the organization should continue doing. If a weakness is the organization’s lack of consistent compensation throughout all job titles, then the opportunity to review and revise the compensation policies presents itself. In other words, the company’s SWOT analysis provides a basis to address some of the issues in the organization, but it can be whittled down to also address issues within the department.

Table 2.3 Sample HR Department SWOT Analysis for Techno, Inc.

Prioritize Issues and Actions

Based on the data gathered in the last step, the HRM manager should prioritize the goals and then put action plans together to deal with these challenges. For example, if an organization identifies that they lack a comprehensive training program, plans should be developed that address this need. (Training needs are discussed in Chapter 8 “Training and Development” .) An important aspect of this step is the involvement of the management and executives in the organization. Once you have a list of issues you will address, discuss them with the management and executives, as they may see other issues or other priorities differently than you. Remember, to be effective, HRM must work with the organization and assist the organization in meeting goals. This should be considered in every aspect of HRM planning.

Draw Up an HRM Plan

Once the HRM manager has met with executives and management, and priorities have been agreed upon, the plans are ready to be developed. Detailed development of these plans will be discussed in Section 2.2 “Writing the HRM Plan” . Sometimes companies have great strategic plans, but when the development of the details occurs, it can be difficult to align the strategic plan with the more detailed plans. An HRM manager should always refer to the overall strategic plan before developing the HRM strategic plan and HR plans.

Even if a company does not have an HR department, HRM strategic plans and HR plans should still be developed by management. By developing and monitoring these plans, the organization can ensure the right processes are implemented to meet the ever-changing needs of the organization. The strategic plan looks at the organization as a whole, the HRM strategic plan looks at the department as a whole, and the HR plan addresses specific issues in the human resource department.

Key Takeaways

  • Personnel management and HRM are different ways of looking at the job duties of human resources. Twenty years ago, personnel management focused on administrative aspects. HRM today involves a strategic process, which requires working with other departments, managers, and executives to be effective and meet the needs of the organization.
  • In general, HRM focuses on several main areas, which include staffing, policy development, compensation and benefits, retention issues, training and development, and regulatory issues and worker protection.
  • To be effective, the HR manager needs to utilize technology and involve others.
  • As part of strategic planning, HRM should conduct a strategic analysis, identify HR issues, determine and prioritize actions, and then draw up the HRM plan.
  • What is the difference between HR plans and HRM strategic plans? How are they the same? How are they different?
  • Of the areas of focus in HRM, which one do you think is the most important? Rank them and discuss the reasons for your rankings.

de Kok, J. and Lorraine M. Uhlaner, “Organization Context and Human Resource Management in the Small Firm” (Tinbergen Institute Discussion Papers 01-038/3, Tinbergen Institute, 2001), accessed August 13, 2011, http://ideas.repec.org/s/dgr/uvatin.html .

Kaufman, G., “How to Fix HR,” Harvard Business Review , September 2006, accessed July 11, 2011, http://hbr.org/2006/09/how-to-fix-hr/ar/1 .

Losey, M., “HR Comes of Age,” HR Magazine , March 15, 1998, accessed July 11, 2011, http://findarticles.com/p/articles/mi_m3495/is_n3_v43/ai_20514399 .

Ulrich, D., “Evaluating the Ulrich Model,” Acerta, 2011, accessed July 11, 2011, http://www.goingforhr.be/extras/web-specials/hr-according-to-dave-ulrich#ppt_2135261 .

Ulrich, D. and Wayne Brockbank, The HR Value Proposition (Boston: Harvard Business Press, 2005), 9–14.

Human Resource Management Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Practicing Strategic Human Resources

Overview Background Benefits of HR Strategic Planning Developing a Strategic HR Plan

Assess the Current Situation

Envision the Future

Develop Strategic HR Objectives

Monitor and Evaluate

Additional Resources

This article provides a definition, background, information, resources and suggested reading on how to begin the process of strategic human resources. Topics include the following:

  • Benefits to HR to engage in strategic planning.
  • Developing a strategic HR plan.
  • Assessing the organization's current environment.
  • Creating statements of vision, mission and values.
  • Implementing, monitoring and evaluating the HR strategic plan.

Strategic human resource management involves a future-oriented process of developing and implementing HR programs that address and solve business problems and directly contribute to major long-term business objectives.

HR management was once largely an administrative function focused on day-to-day responsibilities such as employee recruiting and selection and managing employee benefits. Changing labor market conditions and new business thinking call for HR business strategies that include recruiting and retaining the right people, as well as providing ethical and cultural leadership.

Strategic planning presents great challenges and opportunities for HR professionals. Nearly all HR leaders in the largest global companies are involved in strategic decision-making and participate on the organization's strategy team, and a majority of HR professionals report that strategic planning is part of their function. In contrast, HR professionals in many medium and small organizations are not often involved in organizational or functional strategic planning. Consequently, to achieve long-term strategic HR objectives and to be a key player in the organization's strategic planning process, some HR departments may need to convince senior management of the value and contribution HR can provide.

Benefits of HR Strategic Planning

The closer the alignment between HR and an organization's overall business strategy, the better the company's ability to anticipate and respond to customer needs and to maintain competitive advantage. Rigorous research, planning and development involving workforce culture, behaviors and competencies promote the successful execution of business strategy.

Particular benefits of HR strategic planning include the following:

  • Avoiding costly and disruptive surprises that interfere with achieving goals.
  • Addressing key issues in a timely manner to avoid crises.
  • Promoting employee productivity and overall organizational success.
  • Providing a sense of direction to positively affect how work gets done.
  • Keeping employees focused on organizational goals.
  • Providing a strategic focus to guide training and development initiatives.
  • Giving leaders tools to help focus and implement their strategic initiatives.

Developing a Strategic HR Plan

HR's role includes developing a plan of HR initiatives to achieve and promote the behaviors, culture and competencies needed to achieve organizational goals.

Results-oriented goals broadly include the following:

  • Correctly assessing staffing and skills needs and keeping training up-to-date.
  • Developing and maintaining competitive pay and benefits.
  • Managing performance and designing a rewards system that keeps employees motivated.
  • Knowing what competitors are doing to recruit and retain talent.
  • Providing training, including ethics, which reinforces corporate values.

The strategic planning process begins with four critical questions:

  • Where are we now? (Assess the current situation.)
  • Where do we want to be? (Envision and articulate a desired future.)
  • How do we get there? (Formulate and implement a strategy and strategic objectives.)
  • How will we know if we are on track toward our intended destination? (Establish a mechanism to evaluate progress.)

See  HR as Strategic Planning Facilitator .

The following sections examine each step in greater detail.

Being a strategic business partner means carrying out HR activities with the long-range goals of the organization in mind. To do this, HR professionals must do the following:

  • Understand how the various organizational components interact and recognize the long-term implications of HR decisions. The impact of HR decisions must be thoroughly researched and analyzed before changes are implemented.
  • Have a firm grounding in business basics, including finance, marketing, sales, operations and IT. These skills help with budgeting and with maintaining a workforce with the correct mix of skills.
  • Develop and exercise analytic skills directed at "the why" as well as "the what." This may mean spending more time on so-called translational work (such as coaching business leaders, planning and implementing HR practices that effectively execute strategy, and helping teams manage change) than on transactional work (such as recruitment, training, human resource information systems and other traditional HR functions).
  • Conduct a strengths, weaknesses, opportunities and threats (SWOT) analysis of their organizations. The SWOT approach offers a clearer picture of customers, markets and competitors.

What are the basics of environmental scanning as part of the strategic planning process?

What is SWOT analysis, and how does it apply to an HR department?

How to Make Strategic Choices in Uncertain Conditions

Aligning the HR function to the organization's business strategy

For HR departments, intradepartmental strategic planning can be a good way to start the functional alignment process. However, regardless of whether strategic planning begins in the HR department or in another department, or is managed on an organization wide scale, the actions of the HR department will be integral to the success of the strategic plan. Thus, HR professionals must take care to align the HR function with every aspect of the strategic plan, even if the strategic plan does not explicitly address HR issues. Recent SHRM research reveals that HR professionals foresee significant workplace challenges, including rising health care costs, the retirement of large numbers of Baby Boomers and the increased demand for work/life balance. Retention programs, work/life programs, succession planning, and health, safety and security programs are among the HR efforts that are viewed as key workplace challenges through which HR can strategically contribute to organizations. See  Aligning Workforce Strategies with Business Objectives.

The HR alignment process is often driven by workforce composition issues. Although every organization's particular strategic plan is unique, the demographics and other characteristics of the available workforce have a major effect on the way businesses are staffed. In turn, the way organizations are staffed has a significant impact on the execution of the organization's strategy.  

HR professionals should monitor and respond accordingly to factors that may affect workforce composition, including the following:

  • Age. The age of the existing employees, the age of the available workforce, and the patterns of retirement for older workers and for the entrance of younger workers can significantly affect workforce availability.  
  • Current economic conditions. Unemployment rates, natural disasters and political changes can also have an impact the availability of workers.  
  • Globalization. One aspect of globalization that will affect almost all organizations is the increasing diversity of the workforce. Another aspect of globalization is the economic incentive to outsource labor and production activities to wherever such costs are lower. A third, and related, aspect is immigration, both legal and illegal, in the United States and abroad.

Conducting a SWOT analysis

Understanding of the current situation can be enhanced by conducting a SWOT analysis. This analysis includes an internal assessment of the organization's capabilities and limitations as well as an external environmental scan to review its customers, markets and competitors, and to forecast to external opportunities and threats.

What is a S.W.O.T. analysis, and how does it apply to an HR department?

Cultivate Critical Evaluation with a PESTLE Analysis

How To Build On Your Organization's Strengths

Major areas to consider during an external scan include economic, demographic, political, social and technological trends. An analysis of customers, markets and competitors is used to determine how the market is changing, to predict who the future customers will be and to analyze competitors in the marketplace. See Strategic Planning: What are the basics of environmental scanning? and Report: HR Lags in Using Data to Make Decisions .

When conducting a customer/market/competitor analysis, HR professionals should answer the following questions:

  • What business are we in?
  • What is going on in the world in which we do business?
  • What business should we be in?
  • What are our resources?
  • What are our core competencies?
  • Who are our competitors?
  • How will we compete?

When the HR strategic planning team has fully evaluated the current situation, it should consider what the ideal future would look like from an organizational perspective.

The question "Where do we want to be?" can be answered and clearly articulated by creating statements of vision, mission and values. A vision statement provides a description of what an organization wants to become or hopes to accomplish in the future. An effective vision statement paints a mental picture of the organization's preferred future that is inspirational, aspirational, compelling and concise. See  Human Resources Mission Statement Examples .

A values statement describes what the organization believes in and how it will behave. This statement can serve as the organization's moral compass and should be used to guide decision-making and assess actions taken. See  Mission: What Is the Difference Between a Company's Mission, Vision and Values Statements?

Setting strategic objectives is an important part of the strategic planning process. Therefore, these objectives must be aligned with the organization's mission, vision and overall strategy. Strategic objectives will vary from organization to organization.

To identify whether strategic objectives have a solid foundation for success, HR should consider the following questions:

  • Have the benefits of obtaining the defined objectives been outlined and communicated?
  • Are the strategic objectives relevant to the organization's position in the external market? For example, do they consider competitor positions, organizational size and financial strength?
  • Do the strategic objectives recognize the organization's strengths and weaknesses?
  • Do employees throughout the company understand how these objectives affect them and how they contribute independently and collectively to the defined objectives?
  • Are the strategic objectives realistic and feasible? Unrealistic objectives typically result in disappointment for all involved.
  • Have timelines for benchmarking progress and targets for completed objectives been set?
  • Will the organization realistically be able to identify the success or lack of success in the accomplishment of strategic objectives in some quantitative fashion?
  • Can the strategic objectives be linked back to the organization's overall strategy?

As an example, ABC Company may identify in its strategic planning analysis a need to improve the talent acquisition process. The strategic objective to address this issue is to design selection criteria to ensure best-fit hiring while reducing the time-to-fill positions.

Once a key initiative is identified, the organization should do the following:

  • Continuously ensure that the objective and action plan are aligned with the organizational and HR strategy.
  • Identify the primary actions required to achieve the objective.
  • Set milestones for each action, and plan for contingencies.
  • Identify the required resources, including budget and staff.
  • Establish success measures.
  • Communicate key messages.

Ultimately, a strategic objective is only as good as the overall strategic plan.

At this step of the strategic planning process, the focus is on specifying short-term answers to the question "How do we get there?" Specific, concrete short-term objectives that can be completed within six months to a year should be established to answer this question.

Although many organizations engage in strategic planning, very few of them believe they are highly successful at strategy execution. According to a survey by the American Management Association and the Human Resources Institute, only 3 percent of executives polled said their organizations were very successful at executing corporate strategy, whereas 62 percent stated their organizations were moderately successful. However, the companies that reported relatively high success in strategy execution were more likely to realize favorable revenue growth, market share, profitability and customer satisfaction.

Though every organization has its own strategy execution challenges, this study found that mastering the following areas is essential to successfully implementing strategic plans:

  • Clarity of communication.
  • Alignment of practices.
  • Leadership.
  • An adaptive organizational infrastructure.
  • Resource management.

The single greatest barrier to executing strategy is the lack of adequate resources, the study found.

The final step should be establishing a mechanism to monitor and evaluate progress toward the achievement of strategic objectives. Most organizations conduct annual or quarterly strategic reviews for this purpose. These reviews do the following:

  • Determine whether the organization is on track to achieve key objectives.
  • Provide the opportunity to identify and adapt to significant internal or external changes that affect the strategic plan.
  • Update annual action priorities.

Some organizations may find that systems or tools such as balanced scorecards, benchmarking and dashboards are helpful for keeping focus and monitoring results.

How can the balanced scorecard be applied to human resources?

How do I determine which HR metrics to measure and report?

9 Tips for Using HR Metrics Strategically

Artificial Intelligence Can Free HR Professionals to Focus on Strategy

Wilkinson, Michael (2011) The Executive Guide to Facilitating Strategy Atlanta, GA: Leadership Strategies Publishing.

Stroble, K. R., Kurtessis, J. N., Cohen, D. J., & Alexander, A. (2015). Defining HR Success: 9 critical competencies for HR professionals. Alexandria, VA: Society for Human Resource Management.

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Understanding the Importance of Strategic HR Management

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importance of strategic planning in human resource management

In a fast-paced economy, it is crucial for companies across industries to understand and acknowledge the  importance of strategic human resource planning and management  for business success. This article explains the meaning and importance of strategic HR management  for organizations, and  shares four best HR strategies for implementing it.  

  The importance of strategic human resource planning and management cannot be overstated in today’s dynamic and challenging business environment. We’re seeing a lot of change in the talent demand and supply dynamics, and around 45% of employees in 12 countries, including Singapore, have thought about leaving their organization. How can companies deal with this situation,  improve outcomes, and meet organizational goals? The answer lies in strategic HR management .  

What is Strategic HR Management?  

Strategic HR planning and management refers to all the operations and processes that are put in place by an organization to  ensure their human resources are adequately used, in line with organizational goals, and align people resources with  business goals.  

The traditional HR function concentrates on the daily management of employees, whereas strategic HR planning and management as a process focuses on the long-term stewardship of the workforce. It chalks out how employees can help the organization, and what they need to accomplish its long-term goals. This implies that you need to first understand the company's business targets before developing programs and policies to support them.  

Strategic HR planning and management  can is essential for improving employee performance, developing the workforce, and fostering a positive work environment by aligning HR programs and policies with business strategy. Additionally, it can help companies save costs by minimizing attrition and increasing productivity.

Components of Strategic HR Planning and Management  

Strategic HR planning and management typically involves the following:  

The human resources or people of the company

This is the main driver of competitive advantage, derived from the expertise, judgment, right skill sets, and aptitude of your employees.  

Physical assets are also necessary, and comprises the factories or manufacturing plants,  machinery, HR technology platforms, and other such assets. Strategic HR planning involves putting these two pieces together, along with elements  such as a company's ethos,  history (or brand and legacy) to achieve the long-term goals.   

Workforce planning

This is usually the biggest component of strategic HR management . It involves labor planning, recruitment, training and coordination, relocation, advancements, compensation, layoffs, and cutbacks.  It also includes performance management,  skill development,, and logistical concerns like employee housing, travel, and other regulatory requirements.  

3 . Goal setting, and measurement  

The main purpose of human resources, procedures, and routines is to fulfill the goals of the company by conforming to its strategies. The business plan integrates organizational human resource planning , with an emphasis on addressing long-term issues. Purpose takes the shape of key performance indicators (KPIs) to track if everything is working as per plan.  

Workplace relations management

This component of strategic HRM involves creating guidelines around employee grievance redressal, conflict management, labor relations,  dispute resolution processes,  union representation, and other employee communication issues.  

Learn More: 50 Key HRMS Features That You Should Know Of    

What Are the Objectives of Strategic HRM ?  

The importance of strategic human resource planning and management lies in the fact that it fulfills the essential needs of a company. These key objectives of strategic HRM  are to:  

Enable workforce mobility for smarter resource utilization

A key objective of strategic HRM would comprise cross-training, which refers to  preparing employees to carry out duties in other business departments or divisions. Cross-training increases employee mobility by expanding their skills and expertise.  

Expanding the number of job functions that employees can perform improves your business's continuity plan. . Workforce mobility enhances profitability; organizations that can fill vacant roles with existing staff members can minimize the costs related to hiring new workers.  

Support succession plans through continuous performance management

Among the most important objectives of strategic HRM is to ensure that the workforce can meet future staffing expectations. HR teams and line managers evaluate the current condition of abilities and expertise and decide the optimal course of action.  

This includes conducting more frequent performance reviews or offering learning and development options, and succession planning which involves identifying  employees who exhibit potential and aptitude. It then gives them the necessary training and development to transition them into roles with greater or more urgent/advanced/strategic responsibilities within the company. This makes the best use of existing human resources for future positions.  

3 . Improve productivity, efficiency, and performance  

The core objective of strategic HRM is to help the organization perform better as a profitable business. Improving efficiency and performance is a prerequisite for that. Here’s what needs to be done:   

  • Establish performance tracking frameworks and processes to improve employee performance.  
  • Create a productive and positive work environment.  
  • Reduce employee turnover by creating compensation and benefits programs that attract and retain individuals.  

Learn More: 9 Characteristics of HRM that Makes all the Difference    

Importance of Strategic Human Resource Planning: 10 Key Benefits  

Organizations across industries must give  importance to strategic human resource planning and management, because it offers the following benefits:  

1 . More efficient operations  

 Strategic human resource planning is essential to improve efficiency in operations and improvements in productivity. The strategic HRM planning process outlines organizational needs and devises strategies required to minimize resource waste and boost productivity. Strategic HRM facilitates the streamlining of an organization's processes, such that leaders are able to prioritize and arrange work duties.  optimizes processes, which results in employees being more motivated and prepared to achieve organizational goals. This results in overall financial benefits for the company, including increased profits, decreased resource waste, and a greater return on investment.   

2 . Better preparedness for unexpected market conditions  

In a fast-changing market, the importance of strategic human resource planning is that it increases organizational agility. The process of strategic HR management and planning is centered around being preemptive and proactive as opposed to reacting to gaps in leadership. As part of the process, leaders will evaluate the company's targets and take prompt action to recruit the right people. This crucial distinction between proactive and reactive behavior can have a significant impact on an organization's capacity to recognize change and foster innovation.  

 Better employee retention 

Strategic HR management and planning helps ensure that  employee engagement levels are strong and attrition levels are low. This includes planning for employee growth and development, providing exceptional employee experiences, creating compelling benefits and incentive packages, and other such initiatives that help keep attrition rates low. 4. Accurate progress tracking  

Strategic HR management is essential to ensure that the plans put in place are being followed through and executed efficiently.  During the strategic HR planning process, systems and procedures have to be put in place to monitor the progress the company is making toward attaining its strategic objectives and targets.  Constantly monitoring and keeping track of process can help course-correct and tweak processes when necessary to maximize business and employee productivity.  

Better alignment between skill demand and supply

Strategic human resource planning is important to ensure that the demand and supply of skills are balanced. When you consider employees and talent management in the context of strategic business goals, you can more precisely predict your HR requirements.  You will be able to determine whether current employees can assume the duties of fresh positions and roles. Strategic HRM also assists in determining whether the company’s HR practices can accommodate an organization's expansion plans.  

The importance of strategic human resource planning lies in the fact that the company's HR policies have to be in live with, and evolve with its larger business plan.  Strategic HR management and planning ensures that the organization  changes outmoded or ineffective processes, and puts in place those that nurture a more positive work environment and enhance employee relations.  

Learn More: Why the Right HRM Software Makes Organizations Fare Better    

Understanding the Difference Between HRD and HRP  

Strategic HRM encompasses both human resource development (HRD) and human resource planning (HRP), and it is important to know the difference between the two. HRD can be described as the professional growth of an organization's employees. It seeks to enhance the abilities, expertise, understanding, actions, and mindset of an organization's employees.  

HRP, which is also referred to as workforce planning, is the process of putting a plan in place that  maximizes employee effort and thereby creates organizational value. The importance of strategic human resource planning lies in the fact that it ensures a perfect fit between tasks and the right individuals for these – while preventing surpluses and shortfalls.  

Another difference between HRD and HRP is that HRP aligns HR with business goals in the short and mid-term, while HRD enables long-term alignment and sustainability.  

Learn More: The Evolving Role of CEOs in HR    

Conclusion  

To sum up, strategic HR management is a process that helps companies achieve their goals by better by working more efficiently. By taking the time to strategically plan the HR structure and strategy , companies can ensure that they have the right people in place to achieve their goals. While developing a strategic plan can be time-consuming, the benefits outweigh the costs. Cloud-based software suites like Darwinbox simplify organizational human resource planning and end-to-end SHRM by automating repetitive tasks, digitizing paperwork, unlocking analytics, and using the power of AI. Schedule a demo to learn more!  

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Strategic Human Resource Management: What Is It And Why Is It Important?

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Most businesses have some type of human resource management plan — even if it’s just a rudimentary process for hiring and onboarding. But the businesses that want to succeed incorporate strategic human resource management into their workflows.

In this article, the workforce-optimization experts at Sling define this high-level practice, examine why it’s important, and discuss ways to integrate it into your business.

What Is Strategic Human Resource Management?

light bulb against a black chalkboard

Strategic human resource management (or SHRM for short) is a holistic approach to assembling the best team for your business’s growth and success.

To fully understand strategic human resource management, it’s vital that you’re first familiar with regular human resource management. Human resource management (HRM) is the process and practice of recruiting, hiring, and onboarding the best employees for your business.

HRM also includes providing your employees with the training, development, work environment, benefits , and compensation they need to perform at their best amongst their coworkers and within your company in general.

Strategic human resource management takes these activities to the next level by hiring and training employees in alignment with the goals of the business and the vision statement, mission statement , and organizational strategies that guide them.

The formal definition of SHRM is:

The process and practice of attracting, hiring, developing, rewarding, and retaining employees for their benefit and the benefit of each department and the business as a whole.

A human resource department that works under the auspices of SHRM must, by necessity, interact with other divisions within your business in order to:

  • Get to know their unique needs
  • Understand their goals and how they fit in with the goals of the business
  • Create hiring and retention strategies that align with those goals
  • Give those departments what they need to succeed

Strategic human resource management is a more integral, hands-on approach to furthering the interests and abilities of your business.

Why Is Strategic Human Resource Management Important?

two business professionals discussing strategic human resource management using a whiteboard

Strategic human resource management is the foundation of a strong business because, when properly applied, it ensures that the company as a whole is working together to reach its goals. This gives the business a greater chance to succeed.

Think of your business like a racecar and the components of that car like the departments within your business.

The goal of the racecar is to be the first to cross the finish line. If all the components are working at 100 percent, the race is much easier.

But if the tires are a little low on air, the brakes are overworn in spots, and the engine timing isn’t dialed in, the racecar may fall behind.

SHRM, then, is like the mechanic and pit crew that work hard to ensure that the racecar is in the best possible shape to reach the checkered flag before the other cars.

A human resources department practicing SHRM analyzes the performance of each department and how they’re working together with the other parts of the business.

They then identify ways that departments can change in order to get better and hire employees with the right mix of skills and abilities to make that possible.

All of that being said, your business can function without a formal strategic human resource management plan — many companies do and have for a long time.

But those businesses are often practicing SHRM without even realizing it. SHRM is part of their overall strategy, but they call it by some other name or don’t delineate it from regular human resource activities.

And, really, that’s not surprising. It can be a significant challenge to make SHRM a separate part of your organization and to put plans in place to govern the process. But the benefits far outweigh the drawbacks.

For instance, once established, SHRM can help your business:

  • Avoid talent shortage
  • Maintain compliance with government laws and regulations
  • Anticipate workforce needs in a changing market
  • Facilitate staffing changes
  • Remain agile as the market evolves
  • Plan for short-term and long-term growth
  • Improve operations
  • Stay ahead of the technology curve

When you step back and examine your business as a whole, you’ll find that human capital management is one of the most fundamental parts of your operation. Strategic human resource management helps you maximize its incredible potential.

Objectives Of Strategic Human Resource Management

Type writer typing goals

As we mentioned earlier, strategic human resource management is about assembling the best team for your business’s growth and success. At its most basic, the objective of the process is to match the right employees with the right jobs in your organization.

Your HR department can do this while interviewing prospective employees or even during the performance review of a long-time team member who is reaching out for more responsibility.

ADD_THIS_TEXT But the goals of SHRM don’t stop there. Other SHRM objectives include:

  • Anticipating job and skill changes
  • Implementing a successful onboarding process
  • Adapting to rapid technology changes
  • Improving business operations
  • Complying with local, state, and federal regulations
  • Powering product innovation
  • Facilitating growth
  • Mitigating risk
  • Preventing talent shortage or surplus
  • Adjusting to a more globalized economy
  • Preparing for generational and cultural shifts

As you can see, SHMR is integral to the successful operation of your business and its growth over both the short and long term.

Because this process is connected to every aspect of your business , you may feel overwhelmed by the prospect of creating a new SHRM strategy.

Don’t let this prevent you from implementing a system that can revolutionize the way your business operates — both now and in the future.

Keep in mind that strategic human resource management doesn’t have to address all of the objectives on this list from the moment it goes into effect. Start small and expand into different areas once you’ve addressed one or two objectives.

SHRM Vs. HRP Vs. Organizational Strategy

strategic human resource management

Before we move on to the nuts and bolts of the strategic human resource management process, it’s important to understand where SHRM falls in the grand scheme of your business.

SHRM is part of the larger category of business activity known as human resources (HR). HR is a foundational component of your business that deals with what is, perhaps, the most important asset of all: people.

Human resources also includes such activities as human resource planning (HRP) and, at a higher level, even dovetails into organizational strategy.

How does it all fit together to make your company successful? It helps to visualize various activities on a scale from “simple” to “complex” (or, perhaps, practical to theoretical). Let’s start at the bottom and work our way up.

Earlier in this article, we discussed one of the most basic functions of human resources: matching the right person with the right job. From there, we move up the “complexity” scale to Human Resource Planning (HRP).

HRP is the ongoing process of systematically planning ahead to optimize and maximize the hiring and retention of high-quality employees . Essentially, then, HRP is about looking at the hiring process as a whole and improving the way your business matches employees to jobs.

Further up the human resources scale, we come to SHRM, which is, as we’ve discussed, a holistic approach to assembling the best team for your business’s growth and success.

At first glance, it may appear that HRP and SHRM are the same activity under a different name. They seem so similar because one is actually part of the other.

In this case, HRP is a small part of SHRM. Viewed from a different perspective, SHRM contains and governs HRP.

It’s very much like a set of nesting dolls: the smaller one (HRP) fits nicely into the next largest (SHRM), which, in turn, fits into the next largest, and so on.

For practical purposes, it helps to think about HRP as part of the frontline, boots-on-the-ground application, while SHRM is the guiding principle behind those applications.

In other words, SHRM is the why to HRP’s what .

Another way to think about SHRM and HRP is to view your business as a large, complicated machine.

HRP is one component (a gear, for example) that works with other similar components (e.g., production, logistics, shipping, management, etc.) to keep the machine running.

Strategic human resource management, on the other hand, takes a step back and analyzes the machine itself.

SHRM looks at the performance of each component (each department in your business), how they work together to make everything run smoothly, and what the business as a whole can do to improve.

But is SHRM the final step in the process? Is it the force that guides everything else? No, it’s not. Above SHRM lies your business’s organizational strategy.

strategic human resource management

Organizational strategy , at its most basic, is a plan that specifies how your business will allocate resources to support infrastructure, production, marketing, inventory , and other business activities.

How does this affect SHRM? Think of it like this: Organizational strategy directs SHRM directs HRP . In many ways, the strategy side of your business mirrors the relationship between SHRM and HRP.

Organizational strategy is subdivided into three distinct categories: corporate strategy, business strategy, and functional strategy. Just like SHRM and HRP, each level is a part of the one above it.

Corporate level strategy is the main purpose of your business — it’s the destination toward which your business is moving.

Business level strategy is the bridge between corporate level strategy and much of the “boots-on-the-ground” activity that occurs in functional level strategy.

Functional level strategy is the specific actions and benchmarks you assign to departments and individuals that move your business toward the goals created by your corporate level strategy. They are a direct offshoot of your business level strategies.

With those categories in mind, you start to see the bigger picture of your business: SHRM is a component of your business level strategy, while HRP is a component of your functional level strategy.

So, how do we get from the theory of SHRM to the practice of SHRM? In other words, where does the rubber meet the road? We’ll address that issue in the next section.

Strategic Human Resource Management Planning Process

coworkers using graphs and charts to plan strategic human resource management

1) Understand Your Business Goals

Before you can implement SHRM, you must understand your business goals.

Whether it’s increased market penetration, expansion into new markets, or a stronger bottom line, once you set goals, you can formulate strategies ( functional , business , and corporate ) to make those objectives possible.

With this road map in mind, your HR department can then begin the process of implementing strategic human resource management.

2) Evaluate Your Team

When you’ve established where you want your business to go — via the goals and strategies created in step one — you can evaluate your current team to see how their skills contribute to the objectives you’ve set.

It’s also essential to identify the team members who are interested in receiving training in new aspects of your business

A great time to assess all of these details is during your periodic performance reviews .

3) Analyze Your HR Capabilities

Analyzing your HR capabilities is vital if you want your new strategies to succeed.

Is your HR department equipped and prepared to perform the job of strategic human resource management? Do the team members there have enough knowledge and training?

If not, you may need to make some changes within the department, provide on-the-job training , or bring in new talent to facilitate the transition.

4) Examine Each Department

Once your HR department is ready, it’s time to turn them loose to examine the other departments that make up your business with an eye toward bringing them all into alignment with your goals and strategies.

The purpose of this examination is to discover each department’s unique needs and how HR can provide talent to bring performance up to 100 percent.

5) Begin Hiring To Satisfy Departmental Needs

With department needs in mind, Human Resources can then begin hiring to satisfy those requirements.

Some departments may need specific skills, while other departments may need team members who fit more readily into the existing company culture .

With strategic human resource management, your business can hire the best employees to take your company to the next level and beyond.

The Challenges Of Strategic Human Resource Management

As beneficial and powerful as strategic human resource management is, it’s not without its challenges.

First and foremost, SHRM relies on forecasting. And, no matter how much data you have on hand, or how much experience you have in the business, forecasting is always an imperfect art and is never 100% accurate.

Similarly, you can never account for the ups and downs of the market and the rapid change that could happen at any time without warning.

As such, there will always be some error built into your strategic human resource management. That error will affect the other steps on this list for the good or the bad (depending on how accurate your forecast is). The trick is to make sure that the good always exceeds the bad.

Realistically, though, errors in forecasting can’t be helped. All you can do is give it your best shot. If you do discover errors in your forecasting, you can always return to step one and start the process over with the new information.

Other challenges of the strategic human resource management process include:

  • A resistant workforce
  • Inefficient information systems
  • Overall cost
  • Time and effort

That said, when you are aware of those challenges going in, you can take steps to overcome them right away so that you can get to the benefits sooner.

Scheduling, Communication, And SHRM

Sling's scheduling feature for strategic human resource management

Scheduling is a key part of strategic human resource management. And in the 21st century, the best schedules are created with help from dedicated software like Sling .

Whether your business has one shift or three, offers flextime or a compressed workweek , or works a 9-to-5 work schedule or a 9/80 work schedule , Sling can help simplify the schedule-creation process.

Communication is another component of SHRM.

mobile Sling app

It doesn’t matter if that communication revolves around scheduling, inventory , clocking in and out, ethics , or customer service. The better you communicate with your employees the stronger your team will be.

We developed the Sling app to streamline communication as well as make scheduling, tracking labor, finding substitutes, assigning tasks, and building employee engagement extremely simple.

There are so many ways Sling can help improve your strategic human resource management that we don’t have room to talk about them here. So instead of reading about it, why not try it out?

Sign up for a free account and see for yourself how Sling can help you implement the necessary strategies to make your business successful.

For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com today.

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This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.

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Welcome to the HR Revolution: Strategic Human Resources Management

By Joe Weller | September 26, 2017 (updated November 19, 2021)

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People are the most valued assets of any organization because they individually and collectively contribute to achieving objectives. But in a time of rapid change, how do you plan and make strategic human resources choices that will propel your organization toward its goals?

In this article, we define and discuss the roles and significance of strategic human resource management. In addition, three experts, including a business owner with HR expertise, an academic, and a specialist in organizational design, share their perspectives on the value of strategic human resource management, its function in change management, and best practices to help you continually improve and gain a competitive edge.

What Is Strategic Human Resource Management?

Strategic human resource management is an approach to the practice of human resources that addresses business challenges and makes a direct contribution to long-term objectives. The primary principle of strategic human resource management is to improve business performance and uphold a culture that inspires innovation and works unremittingly to gain a competitive advantage. It’s a step above traditional human resources and has a wider reach throughout the organization. 

Strategic human resource management has no set definition nor one specific model that practitioners follow. There are organizations, like the American College of Healthcare Executives (ACHE) , that suggest best practices for their own profession. 

The framework that does apply universally to the discipline of strategic human resource management is the link between it and the overall business strategy.

Strategic Human Resource Management’s Relationship to Business Strategy

SHRM Relationship to Business Strategy

Reaching ultimate business goals requires leadership. Strategic human resource management encompasses the traditional human resources functions of recruiting, screening, interviewing, and hiring employees, but also works with the overall organizational strategy to achieve success.

The Roots of Strategic Human Resource Management

importance of strategic planning in human resource management

Mitchell Langbert, Ph.D. , is Associate Professor of Business at Brooklyn College. Langbert’s experience includes positions with Fortune -ranked firms and the New York State Assembly Ways and Means Committee. His areas of expertise and research focus on human resource management, business ethics, and higher education issues. Widely published, Langbert has been an expert witness in human resource legal cases, including In re Tittle et. al. v. Enron et. al .

Langbert says that strategic human resource management grew out of important social and historical events: “Industrial psychologists and reformers laid the groundwork for human resource management in the early twentieth century. A few of the developments that led to an interest in Human Resource Management include the development of psychological, especially IQ testing during World War I, the social work and YMCA movements that helped immigrant workers adjust to industrial life, and the threat of labor unions and strikes.”

HR managers saw themselves as having a unique role. “They often viewed themselves as psychologists, or as specialists outside the mainstream of the business” says Langbert. “Recall, in the 1947 film Miracle on 34th Street , the HR manager who fancies himself a psychologist and ham-handedly attempts to commit Santa Claus.”

Langbert continues, “In his classic book on business strategy, Competitive Strategy , Michael Porter points out that in the development of strategic advantage, human resources is an essential element. Take, for example, Japanese auto companies. They rose to ascendancy in the 1970s through long-term thinking about human resource management (e.g., lifetime employment). They continued to rise in the 1980s and 90s through the total quality management movement as well as through the use of organizational culture that had become dominant.”

How did we get to strategic human resource management? Langbert says, “The increasing emphasis on technology and services has further enhanced the importance of HR as a strategic variable.”

Strategic Human Resource Management Is About Working Hand in Hand with the C-Suite

importance of strategic planning in human resource management

Kimmie Marek is Chief Creative Officer and Co-Owner of 7 Charming Sisters , a jewelry company. She uses her Professional in Human Resources (PHR) degree to grow her business. In her view, “Strategic human resources management is all about forecasting and partnering with other departments to get ahead of current operations.”

She adds, “Historically, HR has been reactive. Directives would come from the top and HR would need to adjust accordingly. In Strategic Human Resource Management, HR has a seat at the table and works hand in hand with Chief Operations Executives to forecast staffing needs, pipeline succession, and other HR wheelhouses to determine how to support the organization proactively.”

Growth Mindset Framework and Strategic Human Resource Management

importance of strategic planning in human resource management

Reed Deshler , a former HR executive, is an Organization Design and Change Leader with AlignOrg Solutions and author of Mastering the Cube: Overcoming Stumbling Blocks and Building an Organization That Works . Reed has facilitated many companies’ strategic plans. These plans have led to greater operational efficiencies and cost savings. 

In his article, “How HR Executives Can Enhance Strategic Management Processes,” Deshler writes, “Effective HR executives should be growth mindset catalysts and multiply such thinking wherever they are involved. In many ways, HR executives can ‘set the perfect stage’ for the organization to realize the most meaningful change.” He adds, “Done right, their conscious structuring of the perfect environment can lead a team to greater overall success.”

Efficient HR Functions Support Strategic Human Resource Management

Managing basic human resources functions is an essential element of overall organizational success and an indispensable component of effective strategic human resource management. For information and free templates to keep your human resources running smoothly, read Top Excel Templates for Human Resources . The article includes useful tools, like the one below, concerning a staffing/recruiting plan:

Staffing Plan

Strategic Planning in Human Resource Management

HR leaders in successful international companies, like Starbucks and Coca-Cola, make proactive decisions and are an integral part of the organization's strategy team. A majority of these leaders state that strategic planning is part of their role. Deshler notes that startups and smaller organizations should pay attention: If big players use the strategic human resource management approach, they too may want to use strategic human resource management to help their businesses thrive.

Creating your strategic human resource management approach begins with writing a plan based on your organization’s strategic goal. Start with a SWOT analysis (strengths, weaknesses, opportunities, and threats).

SWOT Analysis Strategy Template

Understanding strengths, weaknesses, opportunities, and threats is the basis of every strategic plan. Seeing these factors side by side clarifies what to address to formulate a powerful strategic human resource management plan.

SWOT Analysis Strategic Template

‌ Download SWOT Analysis Strategy Template - Excel 

As you continue to work on your written plan, focus on gaps that exist in the organization’s current situation, and create your strategy with a focus on your mission and an eye toward the future. For best results, involve line managers in the process.

Strategic Human Resource Management Plan Template

Organize your strategic HR plan and share it with team members for their input. Add your completed SWOT analysis. Use the template as is, or modify it based on your requirements, and translate your strategies into measurable action plans. This simple layout makes it easy for stakeholders to review critical information.

HR strategic plan excel template

‌ ‌Download HR Strategic Plan Template

Roles in Strategic Resource Management and the New Economy

“ In Human Resource Champions (1996), David Ulrich argues that there are four HR roles: strategic player, administrative expert, employee champion, and change agent,” says Langbert. “The traditional psychologist and union avoidance are implied in the administrative expert and employee champion roles.”

According to Langbert, in the new economy, there are different considerations: “The strategic player and change agent roles suggest that HR managers need to collaborate with both line managers and employees. They need to think about and design HR systems that match culture, technological process, and organizational structure with the aim of supporting top management’s strategic thinking.”

Langbert provides examples: “In cost-competitive firms like Wal-Mart, HR needs to think about cost minimization. In the differentiation and focus companies of the new economy (businesses that Warren Buffett would say have a wide moat), HR needs to help identify training, selection, and performance management systems that support top management’s objectives to innovate, focus on customer needs, improve processes, and improve service.”

The Benefits and Competitive Advantages of Strategic Human Resource Management

The greatest benefit of strategic human resource management is also its purpose: to improve organizational performance by integrating and aligning with business strategy.

“Strategic human resource management is certainly a competitive advantage. In manufacturing firms, quality processes depend on stable HR systems. In service companies, HR provides training, rewards, performance management, and employee selection support that enable businesses to serve customers best. Great hotels, whether high-end ones like the Four Seasons chain or more modest ones like Hampton Inn, utilize quality processes that depend on training, support, employee selection, and rewards,” says Lambert.

By creating systems to achieve better organizational performance, strategic human resource management promotes the following benefits:

  • HR-Related Outcomes: Lower turnover, reduced absenteeism, increased job satisfaction, and higher employee commitment
  • Organizational Outcomes: Heightened productivity, quality, service, efficiencies, and customer satisfaction
  • Financial Outcomes: Higher profits, sales, return on assets, and return on investment
  • Capital Market Outcomes: Increased market share, stock price, and growth

Deshler says that a company can achieve these benefits only if the strategic human resource management aligns with the business strategy. “Strategic human resource management by itself is not a competitive advantage for most organizations — in fact, this is where I believe we sometimes go wrong. Strategic human resource management work is strategic when it enables the strategy of the business. Too many HR executives have pursued programs and HR capabilities that the company didn’t want or need. Of course, we are well-intended as we recommend and build strategic human resource management capabilities, but a careful eye must be kept on how these capabilities will enable business strategy,” he emphasizes.   Research ( The Impact of Strategic Human Resource Management on Organizational Performance , The Importance of Human Resource Management in Strategic Sustainability: An Art and Science Perspective , and The Role of Strategic Human Resource Management in Creation of Competitive Advantages ) offers evidence that using progressive HR approaches achieves significantly better financial results.

The Difference Between Traditional HR and Strategic HRM

The Role of Strategic Human Resource Management in Strategic Change

The primary goal of change management is to successfully implement new processes, products, and business strategies while minimizing adverse outcomes. Strategic human resource management and strategic change are tightly interconnected. 

“Changes in policies, process, products, markets, culture, or mission depend on HR on many levels. New approaches often require new ways of thinking about compensation and rewards, for instance,” says Langbert. “A shift to a more dynamic style of doing business might demand the implementation of at-risk pay. New technologies require training programs. Top management needs to think about cultural issues, impacts on employee morale, how layoffs will affect the culture and morale, and similar problems.”   Deshler offers his perspective on what it takes to move change forward: “Change is constantly happening in every organization, but most organizations lack robust organizational capabilities around change. Yes, there might be some change experts on the team, or there might be some tools lying around, but to build a truly strategic change capability, HR leaders need to be thinking about how they will create a change platform that combines traditional change management and program management. A change platform not only has a model for change and some tools, but also has a mechanism for training leaders and practitioners, temporary structures and roles to drive the change, project timelines and risks/issues, and means of measuring progress. Without all of these elements, strategic change results can be spotty.”

Organizational Change Management Communications Plan

Keeping team members informed about impending changes makes transitions smoother and less stressful. Use this template to keep track of the communications process and ensure that you stay on schedule. 

Change Management Communications Plan

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Change Impact Assessment Template

Every change impacts team members and business performance. Before you initiate changes, impact assessment will help you determine how alterations may affect team members, processes, and systems. Examine impact timing, risks to consider, and actions that may help mitigate the impact. Use this template on its own to assess changes, or add it to an overall HR plan.

Change Impact Assessment

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Excel | Smartsheet

Change Management Policy Template

This template provides an outline for change management, from clarifying the type and scope of changes, to identifying the roles and responsibilities for affected team members, to assessing risk factors. Include detailed information on the control process you will employ and the procedures to follow.

Change Management Policy

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Transition Plan Template

When moving team members to fill different roles in your organization, a written transition plan can reduce information loss. This template helps the person previously in the role connect with and train the new team member. Input start and end dates, tasks, goals, assumptions, and more.

Transition Plan Template

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Barriers to Strategic Human Resource Management

HR departments may need to overcome their ideas and discomfort to achieve long-term goals. As Deshler notes, “Change is difficult. Strategic human resource management has been trending upward for decades but continues to challenge HR professionals due to their resistance and other forces.”   Here are the resistance factors you may encounter:

  • Fear of Failure:  Strategic human resource management is a significant shift for the people in organizations, particularly because of metrics and the need for transparency. Senior-level managers may resist taking strategic steps because of a fear of incompetence. There may also be a fear of victimization in the wake of potential failure.
  • Lack of Commitment/Cooperation: A status-quo approach from employees is a barrier to change. You may not have buy-in from all of the senior management team. Unresolved interdepartmental conflicts may make it difficult to adopt a new approach. There may also be leadership conflict over the question of authority.
  • Resource Challenges: There may be real or perceived time and resource limits.
  • Outside Pressures: Immediate economic and market pressures may prevent the adoption of strategic human resource management. The organization may be vulnerable to legislative changes. The resistance may also come from labor unions.

How can you overcome these barriers? Effectively communicating the benefits and strong leadership from senior management can remove the fear of failure and lack of commitment and cooperation. To deal with resource challenges, senior management can provide appropriate budgets and reassign tasks to make strategic human resource management feasible. It may not be possible to mitigate outside pressures immediately, but planning can take place to set up for the future.   You can also overcome the resistance to change through the use of best practices discussed in the following section.

Best Practices in Strategic Human Resource Management

Every organization needs to create its own detailed best practices since, by its very nature, strategic human resource management planning should be tailored to each specific organization.

Marek believes that metrics are a must: “Some key metrics a strategic HR professional must always analyze are turnover, available workforce, growth needs, current staffing needs, and at-risk employee positions. In the event of a turnover, at-risk employee groups must always have a pipeline succession in place to fill key positions.”

To help provide a framework, here are actions to consider as you refine your process: 

Strategic Human Resource Management Best Practices Checklist

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Retention and Onboarding in Strategic Human Resource Management

Hiring the right team members is time consuming and expensive, so retention is a major factor in meeting business goals. Onboarding, or organizational socialization, is a best practice that helps new hires at all levels learn the ropes. Learn more by reading Employee Onboarding Processes: Plans, Best Practices, Flowcharts .

Onboarding Plan Template

Use this template to generate an overall plan for activities to complete at each stage of onboarding. Note contacts in the far-left column. The remainder of the spreadsheet shows the onboarding tasks assigned to each contact throughout the year. Add or remove columns as needed to create your comprehensive onboarding plan.

Onboarding Plan Template

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Executive Onboarding Template

While it’s important for an executive in a new position to hit the ground running, their onboarding process is often more complex and individualized than that for a new hourly employee. Due to the potential financial risk an organization faces if the hire doesn’t work out, it’s essential to follow a careful onboarding process. Based on skills, goals, and identified areas for growth, this template includes input from the individual to help tailor the onboarding process.

Executive Onboarding Plan

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Onboarding Feedback Form

For many processes, honest feedback provides the best path to continuous improvement. An onboarding survey will provide insights on what is and isn’t working in your existing process and will help you reach your goals for productivity, performance, and employee retention.

Onboarding Feedback Form

‌ Download Onboarding Feedback Form  

Trends and Predictions for the Future of Strategic Human Resource Management

Deshler says, “There are two trends I see in strategic human resource management. The first is that strategic change is occurring more often and in more areas simultaneously. HR executives and practitioners need to think about how they lead when there are numerous simultaneous changes. The second is that organizations are adopting more agile ways of working — a great opportunity. It means that HR leaders and practitioners think differently about the speed at which they design and implement strategic human resource management programs. They will have to get used to less precision and have more comfort with delivering ‘minimally viable products."

Where is strategic human resource management headed? Langbert predicts, “Technological innovation will continue apace, as will the need for training. Diversity has many benefits, but it also requires management and support. Employee benefits will remain a sensitive area as the aging population makes increasing demands on firms’ benefits programs. The economy will be a competitive place, and customer service and interpersonal skills training will be in demand. Back in the early days of the internet, some of my students thought that technology would reduce the need for interpersonal and other management skills. The reverse is true. As technology becomes ever more sophisticated, the need for technologically adept, highly motivated workers will become even greater. Managers will need to grapple with discontinuity and change, and HR will continue to play an increasingly sophisticated role.”   Strategic Human Resource Management Leadership Skills Can Take Professionals to a New Level   Being a Chief Human Resources Officer requires a high level of sophistication and a wide variety of skills: commercial acumen, comprehension of cultural differences, awareness of shifting demographics, change management talents, and the ability to act as an advisor to executives and the board. These capabilities are vital in the new economy and are more frequently leading to president and CEO roles . A Harvard Business Review article, “ The New Path to the C-Suite ,” notes that CHROs have what it takes to make it to the top office in the company, and research by Korn-Ferry found that strategic human resource management skills may be the future’s professional stepping stone to the top business leadership roles.

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strategic human resource planning process

4 steps to strategic human resource planning

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4 steps to strategic human resources planning

  • Assess current HR capacity
  • Forecast HR requirements
  • Develop talent strategies
  • Review and evaluate

It’s easy to understand the importance of the human resource management planning process—the process by which organizations determine how to properly staff to meet business needs and customer demands. But despite its obvious importance, many organizations do not have a strategic human resource planning process in place, with many HR professionals reporting their departments need to improve strategic alignment.

If you’ve considered developing an HR planning process, you’re in the right place. This article will explain what human resource planning entails and how to document your strategic plan. With this knowledge under your belt, you’ll be filling positions and growing as a company in no time.

steps to strategic human resources planning

Introduction to strategic human resource planning

In order to improve the strategic alignment of staff and other resources, it’s essential to understand how to create a strategic HR planning process. At its most basic level, strategic human resource planning ensures adequate staffing to meet your organization’s operational goals, matching the right people with the right skills at the right time.

It’s important to ask where your organization stands currently and where it is going for your plan to remain flexible. Each company’s plan will look slightly different depending on its current and future needs, but there is a basic structure that you can follow to ensure you’re on the right track.

The strategic human resource planning process begins with an assessment of your current staff, evaluating whether it fits the organization’s needs. After that, you can move on to forecasting future staffing needs based on business goals. From there, you’ll need to align your organization’s strategy with employment planning and implement a plan to not only to hire new employees but also to retain and properly train the new hires—and your current employees—based on business changes.

Read on to understand human resource planning in more detail.

1. Assess current HR capacity

The first step in the human resource planning process is to assess your current staff. Before making any moves to hire new employees for your organization, it’s important to understand the talent you already have at your disposal. Develop a skills inventory for each of your current employees.

You can do this in a number of ways, such as asking employees to self-evaluate with a questionnaire, looking over past performance reviews, or using an approach that combines the two. Use the template below to visualize that data.

skills inventory by department

2. Forecast HR requirements

Once you have a full inventory of the resources you already have at your disposal, it’s time to begin forecasting future needs. Will your company need to grow its human resources in number? Will you need to stick to your current staff but improve their productivity through efficiency or new skills training? Are there potential employees available in the marketplace?

It is important to assess both your company’s demand for qualified employees and the supply of those employees either within the organization or outside of it. You’ll need to carefully manage that supply and demand.

Demand forecasting

Demand forecasting is the detailed process of determining future human resources needs in terms of quantity—the number of employees needed—and quality—the caliber of talent required to meet the company's current and future needs.

Supply forecasting

Supply forecasting determines the current resources available to meet the demands. With your previous skills inventory, you’ll know which employees in your organization are available to meet your current demand. You’ll also want to look outside of the organization for potential hires that can meet the needs not fulfilled by employees already present in the organization.

Need advice on calculating your staffing needs and developing a staffing plan?

Matching demand and supply

Matching the demand and supply is where the hiring process gets tricky—and where the rest of the human resources management planning process comes into place. You’ll develop a plan to link your organization’s demand for quality staff with the supply available in the market. You can achieve this by training current employees, hiring new employees, or combining the two approaches.

skills supply and demand chart

3. Develop talent strategies

overview of the talent development process

Recruitment

In the recruitment phase of the talent development process , you begin the search for applicants that match the skills your company needs. This phase can involve posting on job websites, searching social networks like LinkedIn for qualified potential employees, and encouraging current employees to recommend people they know who might be a good fit.

Once you have connected with a pool of qualified applicants, conduct interviews and skills evaluations to determine the best fit for your organization. If you have properly forecasted supply and demand, you should have no trouble finding the right people for the right roles.

Decide the final candidates for the open positions and extend offers.

Bring clarity to the hiring process to find the best candidates for your company.

Training and development

After hiring your new employees, it's time to bring them on board. Organize training to get them up to speed on your company’s procedures. Encourage them to continue to develop their skills to fit your company’s needs as they change. Find more ideas on how to develop your own employee onboarding process , and then get started with this onboarding timeline template. 

timeline for onboarding

Employee remuneration and benefits administration

Keep your current employees and new hires happy by offering competitive salary and benefit packages and by properly rewarding employees who go above and beyond. Retaining good employees will save your company a lot of time and money in the long run.

Performance management

Institute regular performance reviews for all employees. Identify successes and areas of improvement. Keep employees performing well with incentives for good performance.

Employee relations

A strong company culture is integral in attracting top talent. Beyond that, make sure your company is maintaining a safe work environment for all, focusing on employee health, safety, and quality of work life.

4. Review and evaluate

Once your human resource process plan has been in place for a set amount of time, you can evaluate whether the plan has helped the company to achieve its goals in factors like production, profit, employee retention, and employee satisfaction. If everything is running smoothly, continue with the plan, but if there are roadblocks along the way, you can always change up different aspects to better suit your company’s needs.

Why document your strategic HR plan

Now that you know the steps to strategic human resource planning, it's time to adapt those steps to your own organization and determine how to execute.

There are a number of reasons to document your strategic human resources plan, particularly in a visual format like a flowchart. Through documentation, you standardize the process, enabling repeated success. Documentation also allows for better evaluation, so you know what parts of your plan need work. In addition, a properly documented plan allows you to better communicate the plan throughout the organization, including how everyone, from the top down, can contribute to make sure the plan works. 

Document every step of the process, from beginning to end, and find room for improvement in your human resources process along the way.

strategic human resource plan

Start creating your own strategic human resource plan with this template.

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

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Home › Strategic Human Resources Management › What is Strategic Human Resource Management?

What is Strategic Human Resource Management?

Certified HR Professional

TABLE OF CONTENTS

Strategic human resource management is a process that helps the human resources department maximize the potential of its workforce through strategic planning, talent management, leadership development, organizational design, and performance management.

In the past, strategic HR management was an administrative function. Today, HR managers play a critical role in ensuring that the organization has the right people that help improve business performance and ensure that it delivers on its mission.

It means that HR professionals need to understand its goals and objectives. How they can best help the organization achieve those goals, and what actions will allow them to do so. This article will help you better understand what strategic human resource management is and how a smart plan can bring tremendous value to the organization.

If you’re interested in learning more via video, then watch below. Otherwise, skip ahead.

CMMS Software

What are Strategic HR Management Goals?

Strategic human resource management involves developing and implementing strategies for attracting, retaining, motivating, and managing talented individuals who contribute to the organization’s success. HRM also includes policies and practices designed to ensure fairness in employment relations.

Strategic human resource management aims to achieve a competitive advantage by creating value for customers, shareholders, employees, and other stakeholders. The term “strategy” refers to the organization’s overall plan of action to create value. It is not just one thing; it is a combination of many things, including:

  • Actions are taken by the organization to meet customer needs
  • Policies and procedures used to manage the organization
  • Processes used to produce goods or services
  • Marketing activities used to sell products and services
  • Financial decisions made to fund operations
  • Organizational structure
  • The technology used to support business processes
  • People-related issues such as recruitment, selection, training, compensation, benefits, and performance management
  • Legal requirements and regulations affecting the organization

How Can Businesses Benefit from HR Strategic Planning?

Businesses benefit from strategic human resources management because it allows human resource departments to make better decisions. For example, companies can develop plans to improve productivity, reduce costs, increase profits, and enhance employee satisfaction. The sales and HR departments play a role in determining whether the company should expand into new markets, acquire another company, or merge with another business.

HR strategic context

If you want to attract more customers, understand what your target market wants and how you can provide it. It would be best if you also decided which marketing methods would work best.

To retain current customers, you must first find out why they buy from you instead of competitors. Then you must figure out ways to keep them satisfied. You may even wish to consider offering discounts or gifts to reward loyal customers.

You must also think about motivating your employees to perform well and stay productive. If you want to hire more qualified candidates, you must first understand the qualities you are looking for in potential hires. You must also decide if you’re going to use job descriptions or conduct interviews when hiring.

Once you have determined your priorities, you can begin to implement changes to improve results.

Strategic Human Resources Management Benefits

Strategic HR involves careful consideration and analysis. Due to that, here are specific benefits of human resource strategic planning for businesses:

  • Identify areas of weakness and strengths
  • Develop strategies to address these weaknesses and strengths
  • Establish sub-goals and objectives to measure progress toward the end goal
  • Make sure there is alignment between business strategy and human resources strategy
  • Ensure that all aspects of the organization revolve around the same set of goals and objectives
  • Create a culture of continuous improvement
  • Evaluate the effectiveness of programs and policies
  • Increased job satisfaction
  • Employee retention

Check our certified HR courses if you want to learn more about developing and implementing a strategic HR management plan. Master HR management and how to get the best out of your employees.

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7 Steps to Creating a Strategic HR Plan

One of the main functions of HR is to provide an effective organization’s workforce management. It includes operational and strategic management and developing a plan that helps employees evolve. To do this, you need to start by determining the purpose of your human resource strategy.

Next, you need to look at the organizational structure of your company. How many levels are there? Do you have a different human resources department within each class? Are some divisions larger than others?

Some of the target outcomes for human resources planning include the following:

  • Increase profitability through a strategic HR planning process
  • Improve customer service
  • Enhance employee morale and motivation
  • Provide training and development opportunities
  • Reduce turnover rates
  • Maintain high-quality standards

Once you have these outcomes in mind, you can follow the following steps in developing a strategic HR department.

1. Define Goals

Defining goals helps you focus on a more strategic human resource management strategy. It gives you direction and provides a framework for measuring success. A goal is an objective you hope to achieve within a specific time frame. It’s something you want to accomplish. A plan is usually quantifiable. For example, you might say, “I want to increase my sales revenue by 20% to achieve a competitive advantage.”

Goals break down into sub-goals. The intermediate goals help you reach the ultimate goal. Additionally, they provide milestones in the strategic HR planning process. For example, if your ultimate goal is to increase sales revenue by 20%, then your intermediate goals can be:

  • Achieve a 5% increase in sales revenue over last year.
  • Achieve a 10% increase in sales revenue from January to June.
  • Achieve a 15% increase in sales revenue during July.

It’s also essential to develop a SWOT analysis when defining your strategic HRM goals. The SWOT analysis helps identify any potential threats or obstacles that may hinder organizational success.

When conducting a SWOT analysis of your HR strategy, consider the following questions:

  • What are your strengths?
  • What are your weaknesses?
  • Where are your opportunities?
  • What are your threats?

Answering these questions will help you define business goals and improve business performance.

2. Determine Objectives

Objectives are measurable actions you take to meet your goals. They are how you achieve your goals.

Your objectives should be realistic. They should not be too ambitious. If they are too complicated, you may fail. You also don’t want them to be so easy that you will never succeed.

You should have a working strategic human resource management process to define specific human resource objectives for your business. Some examples include:

  • Increase the number of new hires by 50%.
  • Increase the average length of employment by three months.
  • Reduce the percentage of employees who leave their jobs by 25%.
  • Eliminate the use of temporary workers.
  • Increase the number and proportion of women in management positions.
  • Increase the proportion of senior managers with MBA degrees.

Your HR objectives should align with your overall company objectives. For example, if your company wants to increase its market share, setting up similar goals makes sense. Additionally, you should align all your HR objectives to your company’s financial objectives.

Keep in mind that the more tangible your objectives are, the easier it will be to measure progress.

3. Create Strategies

Strategic human resource management is all about the strategies you intend to use to achieve your objectives. They are the methods you’ll use to get there. There are many different strategies available. However, there are three main types.

conflict management strategies

  • Change Strategy  – This involves changing the current status quo or making changes that are already underway.
  • Reinforcement Strategy  – Involves reinforcing existing practices and policies.
  • Innovation Strategy  – Introduces new ideas and processes.

Your organization’s strengths and weaknesses are the foundation for your strategic human resource management. There isn’t a single best tactic. Instead, the best strategy depends on the situation.

4. Develop Tactics

Develop HR techniques you’ll use to implement your strategies. There are two kinds of tactics:

  • Direct Tactics  – These involve implementing your strategies immediately. Examples include hiring additional staff, promoting more people, giving raises to employees, and employee retention strategies.
  • Indirect Tactics  – These involve using other resources to support your strategies. Examples include advertising, training, outsourcing services, etc.

When developing strategic human resource management tactics, think about the results you expect from each tactic. Do you need immediate results? Or can you wait until later? How much money will you need? How much time do you have before you need to start seeing results?

It would be best to keep in mind that you can only do what you have authority over. So, if you’re trying to promote employees but they report directly to someone else, you won’t be able to do anything about it.

5. Plan Implementation

Planning is determining when, where, and how to execute each tactic. Planning includes deciding whether to act now, wait until later, or do nothing.

While implementing, it’s essential to closely monitor different factors that may affect the composition of a workplace. These factors include:

  • Age  – Older employees tend to have more significant experience than younger ones. Younger employees are usually less experienced. It can be hard to find good talent among young people.
  • Gender  – Women typically make up about half of the workforce. Men generally make up the rest. Companies with a higher proportion of female employees tend to have better performance.
  • Race  – People of color tend to earn lower salaries than white men. In addition, they are less likely to receive promotions.

6. Monitor Performance

Monitoring results is the process of evaluating what has happened after implementation. Monitoring includes measuring performance against pre-determined benchmarks. It also includes assessing the impact of any changes made by strategic HR management to improve effectiveness.

Monitoring performance is an ongoing activity. It requires constant attention. Monitoring helps determine what works and what doesn’t.

There are several tools you can use, including:

  • Observation

7. Evaluate Performance

Evaluating performance is critical in any HR department. It is the process of comparing actual results to expected outcomes. Evaluation can be done by analyzing data collected through monitoring and evaluation.

Evaluating your performance is crucial because it lets you know if your strategies are working. If not, then you need to change them. For example, if your HR strategies aren’t producing desired results, you might consider changing your approach, including outsourcing strategic human resource services.

Including strategic human resource management in the overall business strategy help with creating a productive environment, but it also helps with other crucial aspects such as retaining employees.

If the human resource department succeeds in creating an effective strategy, it brings value to the organization.

Take time to create the human resource management strategy. Having the right plan creates a streamlined process that’s easy to follow. Good luck.

If you are new to human resources and are looking to break into an HR role, we recommend taking our HR Certification Courses , where you will learn how to build your skillset in human resources, build your human resources network, craft a great HR resume, and create a successful job search strategy.

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Why Is Strategic Planning Important?

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  • 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

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What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

  • The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
  • Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
  • Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

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Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

importance of strategic planning in human resource management

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Strategic Human Resources Management: Everything you Need to Know

Strategic Human Resources Management: Everything you Need to Know

What is strategic Human Resources Management(SHRM)?

Strategic human resources management(SHRM) is a process or system of linking human resources practices to achieving key organizational outcomes. In strategic SHRM, the focus of human resources practices is not on HR per se but on the organization's bigger and more strategic goals. The focus is developing HR interventions and practices that positively impact the organization's higher-level goals and targets. Dave Ulrich often summarises this thrust as "HR for business" and not "HR for HR". In summary, the success of human resources practices should be measured on strategic business outcomes and not human resources outcomes.

Gartner indicates, "Only 32% of HR leaders state that their HR strategic planning process is fully integrated with the business' planning process."

Strategic Human Resources Management (SHRM) involves aligning HR policies and practices with an organization's strategic goals. Hayati (2021) emphasizes the importance of HR professionals understanding the strategic value of HR activities, while Gashi (2013) notes that SHRM and Strategic Human Capital Management (SHCM) are similar but differ in their focus on treating employees as assets.

In SHRM, HR professionals work closely with top-level management to develop and implement HR strategies that support the organization's mission, vision, and values.

Related:  What are the 5 Steps of Strategic Human Resource Management? ​

The transition of Human Resources Management to Strategic Human Resources Management

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This handbook summarises the transition HR needs to move to strategic human resources management. The role of HR Management has undergone a significant transformation in recent years. Previously, HR primarily served as a support function for managers and the organization, focusing on maintaining a positive social environment. However, with increased market competition, the expectations for HR have changed. It now plays a strategic role in the organization, with top management looking to HR to take full responsibility for people management. The employees themselves have become crucial to the success of modern and innovative organizations, leading to an increased emphasis on effective HR management. As a result, HR has evolved to strategically align its strategies with the overall business strategy, translating it into competitive HR strategies. This has become a challenging strategic mission for HR teams as they identify key business challenges and develop appropriate HR policies and practices.

Strategic Human Resources Management: What are the pillars?

This article presents insights from five case studies conducted in leading firms regarding effective people management. The findings highlight three key conclusions. Firstly, a successful HR function is built upon a business strategy that recognizes the value of people as a competitive advantage and fosters a management culture that embraces this belief. Secondly, a value-added HR function prioritizes operational excellence, providing excellent client service to individual employees and managers while minimizing costs. Lastly, an effective HR function requires managers who understand the human capital implications of business challenges and can utilize or adapt the HR system to address these issues. These insights emphasize the importance of aligning HR practices with strategic goals and cultivating a culture that values and leverages human capital for organizational success.

A study examining 115 Fortune 500 companies' subsidiaries found that most had successfully integrated their HRM (Human Resource Management) and strategic planning systems. The study revealed that HRM issues were explicitly addressed in the strategic plans, with HRM executives actively involved as "strategic partners" in the planning process. Moreover, the importance of HRM in implementing business strategies was widely recognized. However, the study did not find a direct relationship between the degree of integration and short-term firm performance. It suggests that time lags may play a role in this regard. These findings have implications for organizations, highlighting the significance of integrating HRM and strategic planning while considering potential time-related factors for optimal performance.

According to a report by Gartner, HR leaders face a historic amount of disruption, and their timeline from planning to action keeps shrinking while the imperatives increase. Gartner surveyed more than 800 HR leaders about their top 5 priorities for 2023.  At the top of their list is leader and manager effectiveness, but many HR leaders will also prioritize change management, employee experience, recruiting and the future of work. ​

Strategic human resources management and organizational performance

There is enough research evidence to show that strategic human resources management(SHRM) impacts business outcomes. Many research papers suggest that strategic human resource management practices are a source of competitive advantage and improve organizational performance. Hassan (2006) found that high-performance management practices are associated with economic gains. Enz (2000) identified five types of HR practices that can improve morale, reduce turnover, increase productivity, and boost guest satisfaction: leader development, training and knowledge building, employee empowerment, employee recognition, and cost management. Bakshi (2014) emphasized the need for horizontal and vertical organizational fit when implementing HR practices.

This study explored the connection between human resource practices, employee quit rates, and organizational performance in the service sector. The findings revealed that call centers prioritizing high skills, employee participation in decision-making and teams, and human resource incentives like high relative pay and employment security experienced lower quit rates and higher sales growth. The study also found that quit rates partially mediated the relationship between human resource practices and sales growth. Additionally, the impact of these relationships was influenced by the specific customer segment served. These insights highlight the importance of effective human resource practices in fostering employee retention and driving organizational success in the service sector.

A field study of 136 technology companies found that commitment-based human resource practices positively influenced the organizational social climate of trust, cooperation, and shared codes and language. The above practices impacted the firm's capability to exchange and combine the knowledge. The study revealed that this relationship predicted the company's revenue from new products and services and sales growth.

In this paper , the Strategic HR Bundles are statistically significant in business performance. Fifteen bundles were identified, with six positively impacting performance and one negatively impacting it. These findings highlight the strategic use of human resources for sustainable competitive advantage. The results are a blueprint for evaluating and adopting organizational practices to achieve performance goals. The bundles with significant relationships include the training Bundle, Share-Options Bundle, Profit-Sharing Bundle, Organization of Work Bundle and the Wider-Jobs Bundle.

Strategic Human resources management: Who is handling it?

​ Bhatnagar (2004) found a moderate quality of strategic HR roles in Indian organizations, while Holland (2005) found that HR professionals in Australian organizations have strengthened their strategic positioning but may face career path restrictions and inadequate measures of HR's contribution to the bottom line. Dainty (2011) explored the skills required for HR professionals to operate strategically in Australia and found that while many skills can be developed, some areas still need improvement. Khatri (2002) examined strategic HR issues in an Asian context and found that top management enlightenment and level of HR competencies determine the role and status of the HR function in organizations and that HR strategy affects both vertical and horizontal fits of the HR function.

Steps to Strategic Human Resources Management

Research consensus suggests that strategic human resource management involves a three-stage process of strategy formulation, implementation, and evaluation ( Krishnan 2004 ). HR professionals play a key role in each of these stages. The literature also suggests that organizational factors can enable or deter the success of each stage. McCowan (1999) provides an example of a company's HR strategy, which includes building employee capabilities and commitment, improving HR function capabilities, and developing innovative partnerships with business leaders. Lengnick-Hall (1988) proposes a typology that posits a reciprocal interdependence between a firm's business and human resources strategies. Finally, Hayati (2021) highlights the importance of HR professionals understanding various activities with strategic value and the need for creativity and innovation in achieving organizational performance.

The link between strategic human resources management and organizational strategy

The relationship between human resource management practices and business strategy has been a topic of interest in empirical research. A study was conducted using data collected from 200 Spanish companies . The findings of this study reveal significant associations between certain human resource practices and the adopted business strategies within these companies.

The reported results confirm some of the previously established relationships and provide valuable insights into the dynamic nature of human resource management practices in alignment with business strategy. These findings highlight the importance of strategic HRM in driving organizational success and competitiveness.

Furthermore, this research opens up avenues for future investigation in understanding the nuanced interplay between human resource practices and different business strategies. By delving deeper into these associations, researchers can uncover new dimensions and explore how HRM practices can be tailored to specific strategic orientations for optimal outcomes.

Many research papers show a strong relationship between business strategy and HR strategy and that HR can be a new basis for sustainable competitive gain and can play a significant role in achieving business strategies. This paper highlights the importance of strategic alignment, which enables continuous monitoring, review, and appraisal of strategy according to environmental changes and helps to ensure quality, up-to-date information for management. The paper emphasizes the need for HR departments to be involved in strategic planning and to align their strategies with the overall business strategy.

The Human Resources Strategic Planning Process

According to Gartner , setting a strategy is just the beginning. It is crucial to turn that strategy into a strategic HR plan and successfully execute it. However, this process often fails due to various reasons. One common reason is the lack of visibility into business goals. Without a clear understanding of the organization's objectives, aligning HR initiatives with the overall strategy becomes difficult.

  • Align with business strategy: Human resources strategy should always respond to and align with the overall business strategy. This alignment should occur upward, aligning with business priorities, and downward, aligning with functional priorities. In today's world, where talent is increasingly important, HR strategy should inform and influence the broader business strategy.
  • Establish goals as part of the strategy: It is important to define what constitutes long-term success for the HR function and prioritize goals that support the enterprise strategy. This may involve creating a prioritized list of initiatives and HR goals and evaluating the gaps between the current state and mission-critical initiatives.
  • Set criteria for measuring successful strategy execution and adaptation: Once goals have been established, it is crucial to identify key performance measures that describe the current level of HR function performance. These measures should be specific, quantifiable, and tied to the overall strategy. By setting criteria for measuring success, organizations can track progress and make necessary adaptations to ensure effective strategy execution.

Developing an HR strategy aligned to the business strategy and the Gartner guidelines above makes business sense.

Strategic human resources management: The challenges

There are several challenges in implementing strategic human resources management. Graziani (2020) found that cultural, political, and sectorial factors can interfere with implementing public enterprises' strategic human resource management policies. Stojanović (2022) highlights the importance of employee performance, engagement, and communication in strategic human resource management. McMahan (1998) suggests that employee involvement, diversity, and international issues present important challenges for current and future research in strategic human resource management. Armstrong (2000) provides practical guidance on implementing HR strategies in a real-world context, including human capital management, corporate social responsibility, and talent management. Overall, the papers suggest that implementing strategic human resources management can be complex and challenging, requiring attention to cultural, political, and sectorial factors and factoring in employee engagement and diversity.

Frequently Asked Questions on Strategic Human Resources Management

What is meant by strategic human resource management.

The CIPD gives a concise definition as follows: "Strategic human resource management (strategic HRM) provides a framework linking people management and development practices to long-term business goals and outcomes. It focuses on longer-term resourcing issues and other HR strategies, such as reward or performance, determining how they are integrated into the overall business strategy."

Strategic human resources management aligns human resources initiatives and practices to the organization's strategic outcomes. What is evident from this definition is that when strategic human resources management is at play, the impact is assessed on strategic organizational outcomes. Such human resources initiatives focus on business outcomes instead of HR outcomes.

What is strategic human resource management, with example?

Strategic human resources management links HR initiatives to key business outcomes. The following research papers provide evidence of strategic human resource management (SHRM) in various contexts. Mabey (1995) presents case studies of SHRM in British Aerospace, National and Provincial, IBC, and Grampian Health Authority. Hemmati (2012) presents a case study of a commercial organization in Malaysia and recommends HR strategies to emphasize competitive advantages. Karami (2004) explores the relationship between strategic management and employee relations in the electronic manufacturing industry and concludes that HR involvement in developing and implementing business strategy leads to organizational effectiveness. Kumar (2014) examines the impact of SHRM on achieving organizational goals and objectives in selected public sector companies in India and finds a weak relationship between SHRM and outcome assessments. The papers collectively suggest that SHRM is present in various industries and can contribute to organizational effectiveness and competitive advantage.

What are the 4 types of HR strategy?

Four research papers present different perspectives on HR strategy. Khatri (2002) found that the companies studied pursued four types of HR strategies: informal and not communicated; informal and communicated; formal but not communicated; and formal and communicated. Gholamzadeh (2013) proposed an integrative HR strategy model that includes four main strategies: paternalistic, commitment, free-agent, and secondary. Wright (1991) derived six basic HR strategies for managing competencies and behaviour: Competence Acquisition, Competence Utilization, Competence Retention, Competence Displacement, Behavior Control, and Behavior Coordination. Anthony (2001) presented a comprehensive overview of HR strategy, including strategies for acquisition and placement, maximizing productivity, maintaining human resources, and strategic separation. So far, research findings suggest that there are multiple types of HR strategies and that the choice of strategy depends on factors such as company culture, labor market, and strategic goals.

What are the 7 steps to strategic human resource management?

Garner recommends the following steps to strategic human resources management.

1. Understand your organization's strategy and goals

To build an effective HR strategy, it is crucial to have a deep understanding of your organization's mission, strategy, and business goals. This alignment between HR strategy and the overall objectives of the organization not only ensures that the HR function contributes to desired business outcomes but provides a solid business case for future HR initiatives. To achieve this alignment, HR leaders should collaborate closely with senior business leaders to clarify the organization's priorities for the HR function. Here are some tips to help align HR strategy with business priorities:

  • Establish a direct line of communication with the CEO through formal or informal meetings. These one-on-one discussions provide an opportunity to understand the CEO's priorities and current strategic focus. By staying informed about the CEO's vision, HR leaders can tailor their strategies to support the organization's overall direction.
  • Collaborate closely with the Chief Financial Officer (CFO) by actively engaging in financial updates and reviewing profit-and-loss statements. By participating in regular business reviews and discussing financial priorities and initiatives, HR leaders can gain insights into the financial aspects of the organization's strategy. This partnership allows a better understanding of how HR initiatives can contribute to financial success.
  • Review quarterly market analysis reports and actively discuss market research findings. Understanding market trends and their impact on the organization is crucial for developing an HR strategy that aligns with business priorities. By staying informed about market conditions, HR leaders can identify opportunities and challenges that may influence their strategic decisions.

2. Identify Capabilities and Skills for Future

To ensure effective strategy implementation, HR leaders should discuss with each business unit or function leaders to understand how their priorities impact workforce requirements. By conversing with the heads of each function, HR can assess the specific implications of the strategy on individual functions and identify the support and resources required from HR in the future. This dialogue should encompass inquiries such as: What talent-related conditions are necessary for the organization to achieve its objectives? Which initiatives, if implemented, would significantly expedite goal attainment or enhance the organization's strategic execution capabilities? When considering various talent risks, what is each risk's potential impact and likelihood of occurrence? Lastly, which talent-related challenges do leaders and employees acknowledge as crucial for the organization's success?

3. Evaluate Current Capabilities and Skills

Evaluating current capabilities and skills helps HR leaders understand talent implications and identify gaps between present and future organizational needs. This assessment helps identify talent objectives for the HR strategy.

4. Develop HR Goals and Criteria for Success

It is crucial to establish goals and criteria for measurement. When setting goals, it is important to define long-term success for the HR function and prioritize these goals based on their alignment with the organization's strategy.

5. Communicate Your HR Strategy

Craft a focused and succinct statement that captures the essence of the strategy and outlines the primary objectives that the HR function will prioritize in the upcoming year. Customize the communication for each stakeholder group to see what they need to do to support the strategy.

​ Trost (2019) suggests starting with the corporate strategy, purpose, competitive advantage and desired understanding of leadership and organization before addressing HR-specific challenges and topics. Ulrich (1998) argues that HR should become a partner in strategy execution, an expert in work organization and execution, a champion for employees, and an agent of continual change. 

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Importance of Strategic Human Resource Management

Human resource management is becoming an important part of organization as it works with the management of human in an organization. It is getting more popularity day by day. But, without developing proper strategies, all efforts remain ineffective. The HR strategies are developed by human resource department of an organization.

What is Human Resource Strategy?

The HR strategy is the tactics or set of actions that help the organization to achieve its strategic goals on short term and long term basis. It helps better sustainability by utilizing human resource efficiently.  The strategy helps to utilize the strengths of the human power and overcome the weaknesses as well.

In a broad sense, the organizational strategies are divided into three parts. First one is corporate strategy, second one is competitive strategy, and the third one is functional level strategy. HR strategies are also divided into these three parts. Those strategies are actually aligned with the organization strategies.

In one sentence, strategic HRM aligns all its strategies with organization’s goals.

Communication of Goals and Objectives

The goals and objective are very important for an organization. These goals are not communicated without the help of strategic human resource. If the goals are not properly translated and communicated, then the people who are employed for those will not be able to perform well in the business operation. As a result, the goals may not be achieved in the given time. In this place, strategic HR plays an important role.

Setting Efficient People to Achieve Specific Goals

The human resource department is responsible for the recruitment of the employees for an organization. They always hire people for different departments of the organization. As a result, they become very knowledgeable about the people they are hiring. So, they also know the capabilities of the people. Specific goals are given to the capable employees with the help of strategic human resource.

Forecasting Future Human Needs

In accordance with corporate, competitive, and functional needs, strategic human resources forecast the organization’s future human resource needs, such as  time off management software . By this, strategic HRM reduces manages the chance of shortage of future human supply. It helps the organization to be consistent in the way of their operation.

Selecting and Utilizing Motivational Tools

A person in an organization may not be motivated by the tool used to motivate others. That means, different type persons required different types of motivational tools. Some people may be motivated by permanent salary increment and some are motivated by a small incentive periodically. For some people, money are not motivating factors anymore. They perhaps need promotion and social recognition to become more motivated. Strategic HR finds out what person needs what to remain motivated that helps organization achieve its goals.

Measuring Performance by the help of HRM

HRM is responsible to measure the performance of employees. The employees are given rewards according to the result of output an employee has given. Strategic human resource selects the right methods of performance measurement. The performance is compared with the expected performance. If any further training or education needed, HR executes that. Without efficient strategic HR, the selection of training or the measurement cannot be determined.

Charting Your Company’s Diversity Progress

In today’s business world, investors, leaders, and potential collaborators are giving more consideration to a business’s values and culture as markers of long-term stability. They are doing so by evaluating a company’s strengths using the DEI (diversity, equity and inclusion) parameter. That is also why HR managers need to pay attention to attracting the best employees, securing important contracts and gain industry recognition. Companies should monitor their global workforce using an HR analytics suite . This will ensure they are recruiting fairly, compensating equitably, and being socially responsible.

Strategic Planning in Human Resource Management

Organizations make plans. Plan is actually a set of actions that will take place in the future. It helps to reduce organizational risks. HR strategy will help to create future plans of human resources of the organization. This will be done to achieve long term organizational goals.

Why an organization needs HR Strategies?

Corporate goals are aligned with strategic HRM . To achieve organizational goal, the organization needs to hire efficient people who will be able to achieve those goals. So, HR determines what type of skilled people will need to be hired in the top level. The top level people basically make main decisions of the organization. 

One of the top strategies of HR is to set viable goals that are actually reachable and measurable.  Because, when goals are measurable and reachable, they are easy to achieve. So, strategic HR sets reachable goals for individuals.

Strategic people of human resource explain and elaborate the target goals to the employees. By that, the employees who execute the operations get a clear understanding of the goals. When goals are clears and the strategies are understandable, those are easy to accomplish.

Strategic HR makes an organization by hiring competitive people. It also measures the skills of the employees in the organization. If it is found that the employees are not competitive, they are trained further to be more competitive. By that, strategic HR makes the organization more competitive.

Strategic HRM is actually the set of tactics that drives the people of the organization toward the paths that helps organizational operations to run accurately. In every organization, strategic HR plays an important role. It is actually the heart of human resource management. These sets of strategies are developed beforehand. So that, the strategic team knows what are needed to be done next. By this, the risks are minimized and the efficiency of human resource is ensured in an organization.

In Conclusion

In the Importance of SHRM, we have tried to explain the points from different perspectives. Without strategic human resource management, an organization will not be able to cope up with the competition in the business field. Strategic HRM aligns corporate strategy with the corporate human management. In the competitive level, HR strategies help to become more competitive. And in the functional level, strategic HR works as communicator to interpret target goals and how to achieve them. For these reasons, HR Strategies are very much important in an organization. 

SHEIKH FAIZUL HAQUE

Sheikh Faizul Haque is an internet entrepreneur and the founder of The Strategy Watch ; Graduated from North South University with a double major in Accounting & Finance in Bangladesh.

With a strong interest in developing and improving Business Strategy and to Conduct Business Analysis.

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The Role of Strategic Human Resource Management In Businesses

Many businesses these days recognize the importance of human resources management in achieving organizational success. After all, your employees are your most valuable asset . Many organizations still don’t quite understand the role strategic human resource management (SHRM) can play in their company. In this blog post, we’ll discuss what strategic HR is and how it can benefit your business.

We’ll also provide some tips on how to make sure your HR functions are performing optimally. So, if you’re looking to get the most out of your workforce, read on!

Defining Strategic Human Resource Management

Strategic human resource management can be defined as “the proactive planning and development of an organization’s most valued assets – its people.

It is a long-term, continuous process that aligns HR programs and initiatives with the company’s business goals .” In other words, it’s all about making sure your HR practices are aligned with your overall business strategy by taking a holistic view of your workforce and understanding how they fit into your larger picture.

There are many benefits to implementing strategic HR in your organization. Perhaps the most important business strategy is how you attract and retain top talent. With the right strategies in place, you can ensure that you’re attracting high-quality candidates who will be a good fit for your company. Strategic HRM can also help you develop your employees and ensure they have the skills and knowledge they need to be successful.

Another key benefit of strategic human resource management is that it can improve communication and collaboration between different departments within your organization. Lastly, Strategic HRM utilizes the talent and opportunity within the human resources department to make other departments stronger and more effective.

The Components Of Strategic Human Resource Management

There are four main components of strategic human resource management:

  • Strategic planning
  • HR policies and programs
  • Communication
  • Employee development & performance management

Each of these areas is important in its own right, but they must all work together to create a cohesive SHRM system.

Strategic Planning:  The first step in any strategic human resource management initiative is to develop a clear understanding of your business goals. What are you trying to achieve? How will your workforce help you get there? Once you have answers to these questions, you can begin to develop strategies for attracting, developing, and retaining the talent you need.

One thing to note is that strategic human resource management does not work independently. The HR department, for example, communicates with other departments in an organization to understand their goals and then develops plans that are consistent with those objectives as well as the broader company. As a result, the goals of a human resource department reflect and support the goals of the rest of the organization.

HR Policies and Programs:  The next step is to put policies and programs in place that support your business goals. This might include things like employee onboarding, training and development, compensation and benefits, and performance management.

Employee Development:  Once you have the right policies and programs in place, it’s time to start developing your employees. This means providing them with the skills and knowledge they need to be successful in their roles. It also involves helping them grow and progress in their careers.

Performance Management:  The final piece of the strategic human resource management puzzle is performance management . This is all about setting clear expectations for employees and then measuring their performance against those expectations. Performance management can help you identify areas where employees need improvement and identify top performers who should be rewarded for their efforts.

Evaluating The Effectiveness Of Strategic Human Resource Management

Once you’ve put a strategic human resource management system in place, it’s important to evaluate its effectiveness with HR Analytics. There are a few key metrics a firm can use to do this:

Employee satisfaction:  Do your employees feel like they’re being valued and supported ? Are they happy with their jobs? Employees are no longer looking for games and beer in the breakroom. The feeling of being truly valued cannot be bought. Employees need to feel this from their managers and senior leadership to have full buy-in. Use surveys and other feedback mechanisms to get insights into how employees are feeling.

Employee engagement:  Are your employees engaged with their work? Do they feel like their talents are being used effectively? Again, surveys and feedback can help you gauge employee engagement levels. Utilizing HR business partners to be present in the day-to-day business can also help you gather and measure this metric.

Employee Retention rates:  Are you losing good employees? If so, why?  Strategic human resource management can help you identify the root causes of turnover and put policies in place to reduce it and help with retaining employees.

Productivity:  Is your workforce as productive as it could be? Strategic HRM can help you identify areas where employees are struggling and put solutions in place to improve productivity.

By tracking these metrics, you can get a good idea of how well your strategic human resource management system is working. The role of strategic human resource management in business is clear. By attracting, developing, and retaining top talent, SHRM can help businesses achieve their goals. If you’re not already implementing SHRM in your organization, now is the time to start.

Need Help With Strategic Human Resources Management For Your Business?

Strategic human resource management is essential for any business that wants to be successful. By attracting, developing, and retaining top talent, SHRM can help businesses achieve their goals.

As we stated earlier, if you’re not already implementing strategic human resource management in your organization, now is the time to start. We offer practical HR solutions that are built to address those challenges for you. Our solutions are delivered through human resource Outsourcing, HR Project Support, Adding to your internal HR team, Conformity, Organizational Design, Culture Change, or Interim In-Person Assistance.

And with over 45 years of combined Human Resources expertise across a variety of sectors, including government contracting, publishing, media, technology, and consulting, our HR professionals are highly knowledgeable in all elements of HR and business strategy. You get the benefit of a full team of strategic HR specialists without having to pay for the overhead that comes with employing a whole-time staff, by having a strategic partner do it for you.

Human Resources Services We Offer

Below are some of the strategic human resource services we offer:

  • Negotiate competitive offers
  • Develop and support engaging new employee on-boarding and orientation
  • Facilitate employee off-boarding and exit interviews
  • Design strategic employee communications
  • Develop policies and procedures for employee management
  • Develop, document, and maintain processes on for the human resources function
  • Comply with federal, state, and local laws
  • Design benefit plan, which includes working with benefit broker, managing benefit cost, hosting open enrollment, maintaining all required documents, sending required notices, and developing a benefit plan to attract and retain talent
  • Manage benefit administration
  • Provide compensation thresholds (target salaries) by conducting a salary analysis of the current market
  • Develop and manage all performance improvement and employee development plans
  • Manage Worker’s compensation incidents
  • Develop and implement performance reviews
  • Develop and implement training as needed
  • Manage all employee relation issues with appropriate internal staff
  • Facilitate conflict resolution with managers and employees
  • Coach managers and employees on employee and performance issues
  • Drive employee performance improvement processes
  • Collaborate with leadership on the designing, planning, and implementing employee relations programs, policies, and procedures
  • Manage human resources best practices around employee relation issue compliance
  • Implement harassment and discrimination prevention

Why You Need An Experienced Team To Handle Your SHRM

Without an experienced team to help with your SHRM, you’re bound to face a plethora of problems. Some of these barriers include:

Lack of understanding:  There is still a lack of understanding about what SHRM is and how it can benefit businesses. This lack of understanding can make it difficult to get buy-in from senior leaders.

Resistance to change:  Many businesses are resistant to change, including changes to how HR is managed. Businesses may be hesitant to invest in new strategic HR planning process processes because they’re not sure if they’ll work or if they’ll be worth the investment.

Lack of top management support:  Strategic HR requires buy-in from the top. Without it, HR initiatives will be seen as a waste of time and money.

Lack of resources:  Strategic HR requires dedicated resources, including staff, budget, and technology. If your organization doesn’t have the resources to invest in SHRM, you won’t be able to implement it effectively.

Lack of data:  Strategic HR relies heavily on data. If your organization doesn’t have accurate data on things like employee turnover, engagement, and skills gaps, you won’t be able to make informed decisions about your workforce.

Lack of alignment:  Strategic HR requires alignment between the HR function and the business goals of the organization. If there’s misalignment, HR initiatives will be less effective.

The Future Of Strategic Human Resource Management

Strategic human resource management is constantly evolving. This is because as the business world changes, so too must SHRM. New technologies, global expansion, and the ever-changing workforce are all having an impact on the way SHRM is practiced.

To stay ahead of the curve, our team ensures to keep up with the latest trends in SHRM. Here are a few things to watch out for in the coming years:

The rise of artificial intelligence:  Artificial intelligence is starting to have a major impact on HR. AI can be used for recruiting, business performance management, and employee development.

The gig economy:  The gig economy is growing rapidly, and it’s having a big impact on the way businesses operate. More and more people are working as contractors, which in turn, changes how HR functions. How do you incorporate this type of labor into your general workforce?

The war for talent:  With unemployment rates at historic lows, businesses face a serious talent shortage. This is making it more important than ever to attract and retain top employees.

Reach Out To Us Today

If you need help with Strategic Human Resources Management or any other human resources function, reach out to us today . We would be happy to talk with you about your specific needs and see how we can help.

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The importance of strategic human resource management

  — April 17th, 2019

The importance of strategic human resource management

Where once the human resources department was focused solely on recruitment and staff training, it has now emerged as a powerhouse, capable of leading an organization into what has become a challenging, fast-moving, digital-first business landscape. Forward-looking organizations are giving their HR leaders a seat at the boardroom table and the ear of the C suite, enabling them to take a more proactive approach to human resources – strategic human resource management.

The Ultimate Guide to employee communication goals and KPIs for HR management

Strategic human resource management connects people with organizational goals.

With strategic human resource management, the HR department is building the link between an organization's most valuable asset – its people – and the strategic direction of the company. Strategic human resource management is directly concerned with growing the business, adapting organizational culture in line with today's workplace and developing competitive advantage.

Although it sounds like a simple objective, growing a business has become ever more difficult in light of several emerging trends – competitive labor market, digital disruption, and social change. But this is where strategic human resource management comes into its own.

Building a balanced and change-ready workplace

As organizations embark on digital transformation projects they need a workforce that's equipped to work effectively in this new environment. An interesting Forbes article makes the point that HR managers have " the ability to grease the wheels to ensure employees are able to change more rapidly ". Learning and development initiatives will be instrumental in bringing employees up to speed on innovation and change in the workplace. This change-ready workforce will, in turn, be well placed to embrace digital transformation and in some scenarios even inspire or lead change themselves.

Corporate culture has hit the headlines repeatedly over the past couple of years in light of gender equality and the #metoo movement. In the midst of this cultural awakening, the role of the human resources team has never been more strategic. Balancing the workplace and eliminating friction can have a positive impact on staff retention figures, but more than that, a McKinsey report concluded that firms in the top-quartile for gender diversity on their executive teams are 21 percent more likely to have above-average profitability.

HR leaders have identified their chief areas of focus for 2019 as building critical skills and competencies for the organization, strengthening the current and future leadership bench and improving the employee experience.

Getting the right people in place at the right time

We've already mentioned how important it is to equip today's workforce for the digital workplace, but equally important is to have the right leaders at an organization. The Gartner survey revealed that 47% of HR managers said their organization struggles to develop effective leaders, 45% reported their leadership bench lacked diversity and 45% said their succession management processes didn’t yield the right leaders at the right time.

Rather than reacting to vacancies at the leadership level, strategic human resources management is about being proactive. Strategic HR managers will assess the organization's goals and take early steps to get the right people in place. This critical difference between reactive and proactive can play a vital role in an organization's ability to identify change and embrace innovation and avoid being ' Amazoned '.

Developing employee engagement

Today's workforce is less engaged than any previous generation. Gartner's Global Talent Monitor  reveals that just 8% of the global labor force reported high discretionary effort (going above and beyond at work) and a high intent to stay at their job.

Effective strategic human resource management can take on these record low engagement levels with clever initiatives. Software company Intuit, for example, launched its Spotlight program which shines a light on employees who have stood out for some reason – performance, dedication, innovation. The employee is rewarded through gift cards or charitable donations in their name. Notably, a study conducted by the Stanford Graduate School of Business showed that 93% of employees felt that receiving Spotlight awards helped to motivate them to maintain a high level of performance.

In many ways, strategic human resource management can deliver a significant competitive advantage to an organization. Demand-driven recruitment, a gender-balanced workplace, high employee motivation, and a strong leadership team all combine to create an organization that's ready to embrace change.

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Importance of Human Resource Planning

  • Post author: Anuj Kumar
  • Post published: 14 July 2022
  • Post category: Human Resource Management
  • Post comments: 1 Comment

Table of Contents

  • 1.1 Future Personnel Needs
  • 1.2 Part of Strategic Planning
  • 1.3 Creating Highly Talented Personnel
  • 1.4 International Strategies
  • 1.5 Foundation for Personnel Functions
  • 1.6 Increasing Investments in Human Resources
  • 1.7 Resistance to Change
  • 1.8 Uniting the Viewpoint of Line and Staff Managers
  • 1.9 Succession Planning
  • 1.10 Other Benefits
  • 2.1 What are the five importance of human resources?
  • 2.2 Reason for current interest and importance in HRP?
  • 2.3 Why HR Planning???

Importance of Human Resource Planning

Human resource planning is the subsystem in total organizational planning. Organizational planning includes managerial activities that set the company’s objective for the future and determines the appropriate means for achieving those objectives. Following are the importance of human resource planning :

Future Personnel Needs

Part of strategic planning, creating highly talented personnel, international strategies, foundation for personnel functions, increasing investments in human resources, resistance to change, uniting the viewpoint of line and staff managers, succession planning, other benefits.

10 Importance of Human Resource Planning

Human resource planning is significant because it helps to determine the future personnel needs of the organization. If an organization is facing the problem of either surplus or deficiency in staff strength, then it is the result of the absence of effective Human Resource Planning .

All public sector enterprises find themselves overstaffed now as they never had any planning for personnel requirements and went on a recruitment spree till the late 1980s. The problem of excess staff has become such a prominent problem that many private sector units are resorting to VRS’s‘ voluntary retirement scheme’.

The excess of labor problem would have been there if the organization had a good HRP system. An effective HR Planning system will also enable the organization to have good succession planning.

Human Resource Planning has become an integral part of strategic planning. HR Planning provides inputs in the strategy formulation process in terms of deciding whether the organization has got the right kind of human resources to carry out the given strategy.

Human Resource Planning is also necessary during the implementation stage in the form of deciding to make resource allocation decisions related to organization structure, process, and human resources. In some organizations, HRP plays a significant role as strategic planning and HR issues are perceived as inherent in business management.

Even though India has a great pool of educated unemployed, it is the discretion of the HR manager that will enable the company to recruit the right person with the right skills for the organization. Even the existing staff hope the job so frequently that organization faces a frequent shortage of manpower.

Manpower planning in the form of skill development is required to help the organization in dealing with this problem of skilled manpower shortage.

An international expansion strategy of an organization is facilitated to a great extent by HRP. The HR department’s ability to fill key jobs with foreign nationals and reassignment of employees from within or across national borders is a major challenge that is being faced by international business.

With the growing trend toward global operation, the need for HRP will as well be the need to integrate HRP more closely with the organization’s strategic plans. Without effective HRP and subsequent attention to employee recruitment, selection, placement, and development, career planning, the growing competition for foreign executives may lead to expensive and strategically descriptive turnover among key decision makers.

HRP provides essential information for designing and implementing personnel functions, such as recruitment, selection, training and development, and personnel movements like transfers, promotions, and layoffs.

Organizations are making increasing investments in human resource development compelling the increased need for HRP. Organizations are realizing that human assets can increase in value more than physical assets. An employee who gradually develops his/ her skills and abilities becomes a valuable asset to the organization.

Organizations can make investments in their personnel either through direct training or job assignment and the rupee value of such a trained, flexible, motivated productive workforce is difficult to determine. Top officials have started acknowledging that the quality of the workforce is responsible for both the short-term and long-term performance of the organization.

Employees are always reluctant whenever they hear about change and even about job rotation. Organizations cannot shift one employee from one department to another without any specific planning. Even for carrying out job rotation (shifting one employee from one department to another), there is a need to plan well ahead and match the skills required and existing skills of the employees.

HRP helps to unite the viewpoints of line and staff managers. Though HRP is initiated and executed by the corporate staff, it requires the input and cooperation of all managers within an organization. Each department manager knows about the issues faced by his department more than anyone else. So communication between HR staff and line managers is essential for the success of HR Planning and development.

Human Resource Planning prepares people for future challenges. The ‘stars’ are picked up, trained, assessed, and assisted continuously so that when the time comes such trained employees can quickly take the responsibilities and position of their boss or seniors as and when the situation arrives.

These are other benefits of human resource planning :

  • HRP helps in judging the effectiveness of manpower policies and programs of management.
  • It develops awareness of the effective utilization of human resources for the overall development of the organization.
  • It facilitates the selection and training of employees with adequate knowledge, experience, and aptitudes so as to carry on and achieve the organizational objectives.
  • HRP encourages the company to review and modify its human resource policies and practices and to examine the way of utilizing the human resources for better utilization.

FAQ Related to Importance of Human Resource Planning

What are the five importance of human resources.

These are the five importance of human resources: 1. Future Personnel Needs 2. Part of Strategic Planning 3. Creating Highly Talented Personnel 4. International Strategies 5. Foundation for Personnel Functions.

Reason for current interest and importance in HRP?

You all know the challenges the business is facing due to turbulent and hostile environmental forces (e.g. technology, social, economic, and political upheaval) impinging on a single one of them.

Why HR Planning???

You all must have understood the importance of planning in general. In designing an environment for the effective performance of individuals working together in groups, a manager’s most essential task is to see that everyone understands the group’s purposes and objectives and its methods of attaining them. If group effort is to be effective, people must know what they are expected to accomplish. This is the purpose of planning! It is the most basic of the managerial functions (refurbish the text on POSDCoRB!). It bridges the gap from where we are to where we want to be. It makes it possible for things to happen which would otherwise not happen. Thus, in the context of Human Resources, planning is a must ‘cause (here I can enumerate many! But, I expect you to come up with an explanatory example for each. Right??)

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A Study of the Impact of Strategic Human Resource Management on Organizational Resilience

Jingjing yu.

1 Business School, Shandong University, Weihai 264209, China

Lingling Yuan

Guosheng han.

2 School of Economics and Management, Harbin Institute of Technology, Weihai 264200, China

3 School of Public Health and Management, Binzhou Medical University, Yantai 264003, China

Organizational resilience is a key capability for modern firms to survive and thrive in the VUCA environment. The purpose of this study is to investigate the mechanism of strategic human resource management on organizational resilience and the mediating and moderating roles of self-efficacy and self-management, respectively, in the relationship between the two. A total of 379 valid questionnaires were obtained from employees of Chinese companies in August 2022, and the data were analyzed using SPSS 22.0 and Amos. The results showed that strategic HRM can effectively contribute to organizational resilience; self-efficacy plays a mediating role in the relationship between strategic HRM and organizational resilience; self-management can effectively contribute to the impact of self-efficacy on organizational resilience; and self-management can hinder the ability of strategic HRM to contribute to organizational resilience. This paper breaks with the previous literature that studied organizational resilience from a single perspective by studying organizational resilience from the perspective of strategic human resource management (SHRM) and verifies that SHRM can be a possible path for Chinese firms to improve organizational resilience.

1. Introduction

In recent years, unexpected events such as natural disasters, financial crises, industrial accidents, trade embargoes, and even terrorist attacks have occurred frequently, and sudden “black swans” and “gray rhinoceroses” have led to a business environment that has become more full of volatility, uncertainty, complexity, and ambiguity (VUCA) [ 1 , 2 ]. The still-unresolved novel coronavirus epidemic has caused more than 40% of Chinese companies to lose money or suffer severe losses, and employees to lose their jobs or take pay cuts [ 3 ], which has a major negative impact on China’s social and economic development. It also revealed that many Chinese companies are “rigid” but “not resilient”. Organizational resilience is the core capability of today’s enterprises to cope with crises in a volatile, uncertain, complex, and ambiguous (VUCA) market environment. It helps companies to remain sensitive and adaptable to the external environment and to recover and bounce back quickly from the challenging impact of adverse events. Additionally, in the process of reflection and improvement, it goes against the trend to become the key to gain core competitiveness and even steady progress [ 4 , 5 , 6 ]. Thus, how to enhance organizational resilience in a dynamically changing business environment has become a hot topic for entrepreneurs and scholars to address [ 7 ].

A review of the literature related to organizational resilience at home and abroad reveals that the current research on organizational resilience in China is still in its infancy. The research is mainly concerned with the elaboration of the concept and principles of organizational resilience, and the scarce literature on the antecedents of organizational resilience are studied from one aspect, such as management methods, human capital, social capital, business environment, organizational system, etc. [ 8 ]. Organizational resilience is a reflection of an enterprise’s comprehensive ability to cope with an uncertain environment, and the study of a single factor cannot comprehensively explain the formation of the mechanism of resilience in an enterprise and cannot well integrate the impact of the interaction of various factors on organizational resilience, which lacks operability in enterprise practice and cannot effectively help enterprises to improve organizational resilience [ 9 ]. At present, there is an urgent need to study the formation mechanism of organizational resilience from a holistic perspective considering the comprehensive effect of each antecedent factor and provide a theoretical basis for Chinese enterprises to improve organizational resilience. Strategic human resource management is a system, process, or measure consisting of a series of temporal activities taken in order to fit with the organization’s strategy and long-term development goals and thus maintain competitive advantage. Lengnick-Hall [ 10 ] believes that organizational resilience works through the knowledge, skills, abilities, and other attributes of people within an organization, and that strategic human resource management can be achieved by changing management styles, processes, practices, and HR policies, etc. to develop these qualities in employees to enhance organizational resilience.

In exploring the role of modeling the relationship between strategic human resource management and organizational resilience, this paper found the “key” of self-efficacy, drawing on the literature on emotional competence. All HR policies and plans in an organization require employees to take specific actions to achieve the desired goals. Thus, self-efficacy, an essential emotional competency on the part of employees, is critical to the effectiveness of plan implementation. Early warning capability, flexibility during a crisis, and learning and growth capability following a crisis are three core competencies included in organizational resilience [ 11 ]. Self-efficacy refers to a strong belief in one’s own ability to comply with a corporate strategy, which enables employees to relieve psychological pressure in time, stabilize the psychological reactions of personnel to adversity, actively obtain environmental resources and external support to optimize human resource allocation, and integrate human resource management practices with corporate strategy organically by focusing on internal personnel selection and appointment, performance evaluation and assessment, and external active recruitment; this approach allows organizations to shape a corporate culture of overcoming difficulties, create dynamic and flexible adaptation mechanisms, construct internal knowledge structures, and actively seek foreign environmental resources, thereby enhancing corporate resilience capabilities by providing solutions to crises and addressing corporate structural problems [ 12 ]. Thus, self-efficacy is an essential perspective for the study of organizational resilience that can explain why strategic HRM are able to influence organizational resilience capabilities; therefore, this study intends to discuss the relationship between strategic HRM and organizational resilience as mediated by self-efficacy.

In addition, we cannot ignore the key issue that strategic HRM must be implemented and accomplished through corporate employees no matter what policies are formulated, and corporate organizational resilience capabilities must also function through corporate employees as mediators. Thus, studying the mechanism of strategic HRM’s effect on organizational resilience is inevitably influenced by employees’ work style. As a result of the rapid development of the economy and excellent material abundance of China, employees’ sense of autonomy and their self-working ability are becoming increasingly prominent. According to the traditional HRM model, it is difficult for leaders to supervise and constrain employees. It is more practical to study the effects of strategic HRM with respect to enhancing organizational adaptability and flexibility to the environment from the perspective of employees’ sense of autonomous work. Therefore, this paper uses self-management as a moderating variable to determine whether self-management plays a moderating role in the relationship between strategic HRM and organizational resilience.

According to a report by Fortune magazine, the average life expectancy of small enterprises in China is 2.5 years, and the average life expectancy of large enterprises is 7-8 years, which is far behind those of European and American countries. From the side, it shows that Chinese enterprises lack the ability of resilience to cope with the crisis. Especially under the impact of the novel coronavirus epidemic, many enterprises have experienced serious losses or even bankruptcy, resulting in employee pay cuts and unemployment, adding a heavy burden to China’s social stability and economic development. In summary, this paper takes conservation of resources theory and self-cognitive theory as the theoretical basis and empirically investigates the intrinsic mechanism of strategic human resource management on organizational resilience. It provides references for Chinese companies to enhance organizational resilience.

The main contributions of this study include two main aspects. On the one hand, this study can enrich the literature related to the study of strategic human resource management and organizational resilience; on the other hand, the research results of this paper can guide the managers of Chinese enterprises to formulate strategic human resource planning, coordinate all resources of human, financial and material resources, optimize enterprise processes, improve enterprise management policies, increase enterprise innovation, etc., so as to enhance organizational resilience.

2. Literature Review and Research Hypothesis

2.1. strategic human resource management and organizational resilience.

Strategic HRM was developed to facilitate the strategic management of organizations, and Wright and McMahan [ 13 ] give a more representative definition of this concept. They consider strategic HRM to represent an organization’s plans for human resource deployment and behavioral norms with the aim of achieving the organization’s goals. This definition emphasizes both the vertical and horizontal fit of strategic HRM: vertically, strategic HRM refers to the match between and mutual adaptation of HRM practices and the organization’s strategic management process, whereas horizontally, strategic HRM emphasizes the coherence among various HRM practices based on the planned action model. The vertical and horizontal fit of strategic HRM ensures that HRM is fully integrated into strategic planning to guarantee that HR policies and practices are generally accepted and widely used by managers and employees, such that companies can obtain inimitable or alternative competitive advantages by leveraging their HR strengths [ 9 , 14 ]. According to conservation of resources theory, strategic HRM, as a strategic organizational resource, represents an organic combination the talent resource elements in an organization as well as the allocation of resources among members of the organization; thus, strategic HRM emphasizes the flexible adjustment of staffing policies and practices, training and development programs, performance standards, selection criteria, and rewards and punishments in response to changes in external contexts, thus providing strategic tools to promote resource integration, crisis prevention and control, and learning and innovation in organizations [ 15 ].

The concept of resilience originated in the fields of physics, ecology, and environmental science, and Meyer [ 16 ] first introduced this concept into the field of management, thereby opening up a new chapter in the study of organizational resilience, which was quickly and widely studied in the fields of crisis management, disaster management, and high-reliability organizations. Previous research on organizational resilience has been focused on two main research perspectives: the rebound perspective and the rebound + overtake perspective [ 10 ]. The rebound perspective views organizational resilience simply as the ability of the organization to recover from an accident, stress, or crisis to return its original state, i.e., the ability of an organization to take countermeasures to return to its precrisis level of performance. The rebound + overtake perspective views organizational resilience not merely as the organization’s ability to respond to challenges and changes to return to its original state but also as the organization’s ability to develop new capabilities or create new opportunities for the organization to continue to thrive and grow [ 17 ]. This paper considers organizational resilience to be a dynamic and flexible organizational capacity that allows organizations to survive, adapt, recover, and even return to prosperity in an adverse environment. Lengnick [ 18 ] claimed that organizational resilience capacity is rooted in the psychology and behavior of individual employees. Employees’ knowledge, skills, and strengths regarding their values, mindsets, levels of stress tolerance, and innovation abilities are essential sources of organizational resilience [ 18 , 19 ]. These employee qualities and capabilities are closely related to the individual’s ability to adapt to dynamic environments and to develop creative solutions to resolve crises. Employee resilience is an important source of and foundation for organizational resilience; thus, organizations can enhance their organizational resilience capabilities by developing employee resilience.

In this paper, we argue that strategic HRM can influence individual resilience and thus enhance organizational resilience via the development of HRM policies and practices that match both the external environment and organizational goals [ 20 ]. Specifically, the effects of HRM policies and practices on organizational resilience can be elaborated in terms of three aspects of human resources: human capital, social capital, and psychological capital [ 15 ].

First, human capital primarily includes the physical quality and physical health of employees on the one hand and the knowledge, skills, and experience possessed by employees on the other hand. In a crisis, members of an organization can make timely judgments and actions based on the knowledge, skills, and experience they possess to change the organization’s passive situation as much as possible, thus influencing its resilience [ 19 ]. The exchange of knowledge and experience among organizational members and their interactions can promote the formation of the collective cognition of the organization. This collective cognitive ability encourages organizational members to cooperate tacitly, trust each other, and unite in the face of adversity, thus developing the unique organizational ability of the enterprise to cope with crises and affecting the organizational resilience ability [ 21 ].

Second, social capital is a potential resource possessed by the organization within the social network system, which is essentially an environmental factor that is mainly divided into internal environmental factors (e.g., colleague relationships, learning atmosphere, team spirit) and external environmental factors (e.g., partnership with suppliers or distributors, flexible external information system) [ 22 ]. Social capital can increase the levels of coordination and cooperation that employees exhibit in their work, which in turn increase the motivation and efficiency of the organization with respect to coping with a crisis. Moreover, social capital can be used to obtain resources and information from the external environment that are critical for crisis resolution and the reallocation of resources both inside and outside the organization, thus enhancing organizational resilience and mitigating the negative impacts of the crisis for the organization.

Finally, employees with high psychological capital can withstand the tremendous pressure entailed by a crisis and face challenges and changes with a positive and confident attitude, create a good organizational climate, and apply their knowledge and skills based on the local conditions to create opportunities for the organization to survive and grow in the face of adversity, which has a significant impact on the organization’s ability to enhance its resilience and obtain competitive advantage [ 23 ]. In addition, previous studies have demonstrated that strategic HRM that is well matched with the organizational environment, strategic planning, and corporate culture is closely related to organizational resilience. For example, Shafer et al. [ 23 ] found that when organizational HR practices are aligned with organizational values, organizations can promote organizational agility through staffing policies, personnel training, career development programs, and performance standards, thereby enhancing organizational resilience. Okuwa [ 24 ] found positive relationships among training, human resource development, and organizational resilience. Mienipre [ 25 ] found that talent management was significantly correlated with organizational risk monitoring and crisis response capacity. In summary, the following hypothesis is proposed.

Strategic human resource management has a positive effect on organizational resilience.

2.2. The Mediating Role of Self-Efficacy

The concept of self-efficacy was introduced by Bandura [ 26 ], an American psychologist who believed that self-efficacy represents an individual’s subjective evaluation and perception of his or her abilities, which in turn influences the individual’s behavioral choices, beliefs regarding success, and level of effort, and can to some extent determine the individual’s ability to fulfill the requirements of a particular job; that is, self-efficacy is dynamic and can change due to different levels of access to external resources, the acquisition of new knowledge and skills, or an increase in experience. According to previous studies, the factors affecting self-efficacy mainly include the following. (1) Individuals’ ability levels are evaluated prior to performing certain activities; individuals evaluate their own ability based on their past successes or failures, such that individuals who exhibit a strong sense of self-efficacy do not deny their ability due to occasional failures but rather search for the causes of environmental factors, strategies, and experiences and adjust their future actions accordingly. (2) Individuals who observe the behavior of others and encounter people with similar abilities who have achieved success can greatly enhance their own self-efficacy and increase their firm belief in achieving success. (3) Individuals receive evaluations, encouragement, and self-motivation from others. Evaluations or encouragement based on the facts of the situation can increase the individual’s belief in his or her ability to accomplish the goal. (4) The individual’s own emotional and physiological state also affects self-efficacy, such as the ability to remain calm under tremendous pressure, avoid exhibiting arrogance, analyze the pros and cons of the actual situation, and make the most appropriate decision, which can increase the individual’s ability to accomplish the goal as well as his or her sense of self-efficacy [ 26 ].

Self-efficacy is an important component of human capabilities that can influence individuals’ perceptions, ways of thinking, motivation, and actions [ 27 ]; in addition, it varies with people’s knowledge and external environment [ 28 ]. Thus, organizations can improve employees’ self-efficacy by implementing human resource practices such as communication, training, sharing successful experiences, and providing opportunities for success. For example, organizations can increase employees’ relevant work experience by providing training and organizational learning [ 29 ]. When employees are trained in job-related practices, they are able to acquire relevant job knowledge and information that can enhance their self-efficacy to perform their jobs competently. Second, employees’ self-efficacy can be stimulated by sharing the successful experiences of colleagues with similar abilities to enhance their beliefs in their ability to overcome specific job difficulties and their efforts to do so, thus moderating the empowerment of employees and providing them with opportunities to grow and succeed to ensure that employees feel supported by the organization and trusted by their leaders; this approach increases employees’ sense of organizational belonging and self-efficacy, thus allowing the organization to take full advantage of employees’ knowledge and skills and to face challenges and cope with stress actively. Strategic human resource management refers to the alignment of organizational strategic planning with human resources, which is used to guide human resource practice activities and is frequently considered to be an essential factor influencing the cognitive, motivational, and affective processes of self-efficacy [ 30 ]. Organizations can ensure sound planning and develop action plans for future operations by engaging in HR activities such as training, sharing successful experiences, role models or motivation, and developing employees’ confidence in dealing with dynamic environmental challenges and complex work. In summary, the following hypothesis is proposed.

Strategic HRM has a positive effect on self-efficacy.

According to conservation of resources theory, self-efficacy, as an essential psychological resource, is closely related to employees’ self-beliefs and can motivate them to accept challenges and persevere in the task of accomplishing their work goals [ 31 ]. Thus, when facing complex tasks, on the one hand, self-efficacy can strengthen employees’ determination and confidence to complete tasks and allow them to unite their colleagues actively, integrate relevant resources and information, and courageously face difficulties and challenges [ 32 ]; on the other hand, self-efficacy can motivate employees to self-regulate in a timely manner, relieve tension and anxiety, and reallocate resources and set goals based on the specific situational conditions at hand to ensure that difficulties can be broken down into simple goals and achievable work objectives [ 33 , 34 , 35 ]. In addition, employees who exhibit a high sense of self-efficacy are skilled at using new methods and ideas to solve unconventional problems, thus enabling the organization to find alternative ways of surviving situations of adversity and contributing to the organization’s resilience [ 35 ]. In conclusion, self-efficacy enables employees to believe in their ability to work in situations of adversity, recover quickly from anxiety, and invest the necessary effort and creativity to accomplish challenging tasks. Therefore, the following hypotheses are proposed.

Self-efficacy has a positive effect on organizational resilience.

Self-efficacy plays a mediating role in the relationship between strategic human resource management and organizational resilience.

2.3. The Moderating Role of Self-Management

According to self-cognitive theory, individuals have certain values, beliefs, knowledge systems, and behavioral norms. Individuals form their unique control systems based on these internal resources and accordingly set goals, engage in self-assessment, and exhibit self-motivation as a means of guiding their work activities, i.e., self-management [ 36 ]. The awareness of the practice community that organizational control and supervision must be achieved by influencing the self-management system to achieve this goal, i.e., by harmonizing organizational control and individual motivational orientation, is increasing [ 37 ]. Self-management refers to the process by which employees set goals, take positive actions, and engage in a series of behaviors, including self-monitoring and evaluation as well as self-reward and punishment, to promote their own intrinsic self-worth based on their personal needs. Self-management results from the interaction of individual cognition, behavior, and the external environment. Bandura [ 38 ], in developing social cognitive theory, proposed that individuals exhibit self-rationality, that is, that the individual’s response to the external world is not mechanical and passive but rather represents a form of goal-oriented behavior following self-regulation of and self-reflection on their activities; in addition, the achievement of such a goal can allow the individual to obtain self-worth and meaning (such as monetary or spiritual rewards, social needs, or self-actualization). Bandura’s model of individual self-management [ 39 ] includes three components: self-observation, self-assessment, and self-response. The process of self-observation involves actively identifying the quality, quantity, and frequency of the performance accomplishment of other individuals and comparing those individuals with oneself to make an objective assessment of one’s own work ability; the process of self-assessment entails comparing one’s actual performance with the company’s performance standards, thereby assessing one’s own performance and developing strategies for improvement; and the process of self-reaction implies rewarding and punishing oneself according to the results of the assessment as well as reflecting on and improving oneself continuously.

According to conservation of resources theory, organizational resilience is an essential intangible resource that allows the organization to survive and develop in adverse situations, thus enabling organizations to make decisive decisions in dynamic situations, flexibly deploy their internal and external resources, and take appropriate actions to ensure that the organization is always able to adapt to the business environment and obtain competitive advantage [ 11 ]. In times of crisis, only if the organization is united, determined, and confident can it seize the fleeting moment, make decisive decisions, and act efficiently to take full advantage of its own resilience. A high level of self-management ability on the part of employees, with good self-cognitive ability and the ability to obtain and process environmental information to ensure that they can quickly judge the situation in times of crisis and work in an orderly manner based on the situation, is target management. Thus, a high level of self-management can increase employees’ sense of psychological security and self-efficacy in times of crisis, thereby enhancing the resilience of the organization. Specifically, on the one hand, the process of self-management is driven by employees’ intrinsic values, and the achievement of the organization’s goals is a testament to employees’ self-worth [ 40 ]. Employees view the challenges presented by adversity as opportunities to prove their own ability and value. They view work as their responsibility and believe in accomplishing challenging goals by taking full advantage of their professional skills and creativity and working with other members of the organization to deal with environmental challenges and smoothly survive crises, thereby enhancing organizational resilience. On the other hand, employees with high levels of self-management are skilled at assessing their own abilities and performance levels or those of others as well as setting reasonable work goals and developing reasonable action strategies based on the resources and information that they obtain because employees who are skilled at self-management tend to take the initiative to collect and process environmental information, remain sensitive to the external environment and organizational operations, and ensure that they are always needed by the organization as a means of maintaining their competitive positions in the organization. In times of crisis, when the organizational landscape changes, employees quickly orient themselves to their goals with self-management ability, integrate their accessible resources, develop reasonable action plans and smoothly execute them, reduce their confusion and anxiety, increase their self-efficacy, and take full advantage of organizational resilience [ 41 ]. In conclusion, self-management can enhance the contribution of self-efficacy to organizational resilience. In summary, the following hypothesis is proposed.

Self-management plays a positive role in regulating the impact of self-efficacy on organizational resilience.

Previous studies have shown that the application of self-management in organizations can reduce the costs of business supervision and management and improve business performance and employee well-being, among other effects [ 42 ]. However, self-management is not effective in all situations [ 43 ]. Employee self-management is based on mutual trust between leaders and employees, such that leaders trust employees to be capable of accomplishing the established goals, and employees trust that they will receive set rewards for accomplishing such goals [ 44 ]. However, critical moments that require companies to demonstrate their resilience to cope with difficult times can lead to changes in companies’ human resource management plans and thus in their goals and development direction as well as the reshuffling of personnel rights and interests within such companies. In this situation, employee self-management hinders the ability of strategic human resource management to promote the company’s organizational resilience capabilities. Specifically, first, according to conservation of resources theory, the achievement of self-management goals requires the input of individual and organizational resources [ 45 ]. Crises cause the achievement of goals to be rife with uncertainty. Employees have negative attitudes toward the implementation of the company’s strategic human resource plan and corporate goals due to their desire to prevent their resources from being lost. In addition, organizational resources become scarcer and more difficult to acquire in a crisis. Employees tend to compete for internal resources to maintain their existing resources and rights, which strains the relationships among people within the organization and is not conducive to communication, cooperation, and knowledge sharing among members of the organization. In contrast, organizational resilience requires a high degree of team cohesion, mutual trust, assistance, and cooperation and thus is not conducive to organizational resilience. Second, the adjustment of strategic HR policies in times of crisis can lead to the reformulation of individual goal management. Employees’ internal self-actualization and self-growth are essential drivers of self-management goals. Once corporate goals deviate from individual goals, employees’ actions may impede or even prevent the implementation of strategic HRM plans, thus rendering the organization unable to deploy people and resources rapidly and perhaps even causing the organization to miss the best time to act, which is not conducive to the development of organizational resilience [ 46 ]. Finally, strategic HRM is a management approach that aligns HRM with corporate strategy. Corporate strategy often takes the form of management involving multiple goals, such as corporate performance, social responsibility, and brand image. The complexity of work and teamwork cause corporate goals to become indistinguishable or unclear, which makes it difficult for employees to set and implement their personal self-management goals, thereby causing them to become confused and uncomfortable and to experience self-doubt or negative emotions, which is not conducive to the development of organizational resilience. In summary, the following hypothesis is proposed.

Self-management negatively affects the impact of strategic human resource management on organizational resilience.

In summary, based on conservation of resources theory and self-cognitive theory, this paper constructs a moderated mediation model, as shown in Figure 1 , and examines the relationships among strategic human resource management, self-efficacy and self-management, and organizational resilience.

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Hypothetical model of the mediating effect of self-efficacy and the moderating effect of self-management.

3. Methodology

3.1. study sample.

This study was conducted to investigate the organizational resilience of enterprises within China. In order to guarantee the accuracy, reliability of data, and wide distribution of the research sample, this study follows the principle of randomness to select the employees of enterprises with different industries, ages, education levels, positions, and income statuses in several cities within China. Due to the special national conditions of China, there are major disparities in the development levels of various regions, so the sample source of this paper includes developed large cities, such as Beijing, Shanghai, Shenzhen, Guangzhou, etc., medium development level cities, such as Jinan, Qingdao, Dongguan, Huizhou, Haikou, Lanzhou, etc., and developing small cities, such as Jiuquan, Weihai, Hami, etc. For the convenience of sample collection, a combination of online and on-site distribution was chosen for this study. In order to guarantee the authenticity and accuracy of the acquired data, a partial reverse setting of the question items was used. It was filled out voluntarily and anonymously to reduce the concerns of those who filled it out. A lottery link was also included with the questionnaire to incentivize the completion of the questionnaire. A total of 441 questionnaires were collected for one month starting from August 2022, excluding invalid questionnaires that were completed too quickly, filled out incorrectly, had omitted answers, or were duplicates. 379 valid questionnaires were obtained, for a return rate of 86%. The gender distribution of the sample was 53% males and 47% females; the age distribution included 16.9% of participants aged 25 and below, 37.2% aged 26–35, 28.5% aged 36–45, 14.8% aged 46–55, and 2.6% aged 55 and above; the education distribution included 20.6% of participants with a high school/junior college education, 43.3% with bachelor’s degrees, 10.3% with master’s degrees, and 2.1% with doctoral degrees.

3.2. Variable Measurement

All variables included in this study questionnaire were measured using the seven-point scale developed by Richter. All the scales used in this paper are well-established scales with good reliability and validity that have been validated many times in the Chinese cultural context. Additionally, a small sample of 73 people was taken for pre-study. Afterwards, two professors and three PhD and MSc students in the field of business management and human resource management examined and adjusted the new questionnaire according to the research questions, validity, and reliability of the questionnaire results, Chinese cultural background, and readability.

Organizational resilience: this variable was measured using a 15-item organizational resilience scale developed by Xiu’e Zhang et al. [ 47 ] in the context of China. This scale contains items such as “ability to adapt and creatively solve problems when a crisis occurs” and “ability to access needed resources quickly to address challenges in times of crisis”.

Strategic human resource management: this variable is assessed using a 19-item scale based on Delery’s Strategic Human Resource Management Scale [ 48 ], adapted to the Chinese cultural context, which contains items such as “Individuals in this job have clear career paths within the organization“ and “Individuals in this job have very little future within this organization (reverse-coded)“.

Self-management: this variable is assessed using a 10-item scale based on Renn ‘s self-management scale [ 49 ], adapted to the Chinese cultural context, including “I set specific goals for myself at work”, “I establish challenging goals for myself at work”, and “I clearly define goals for myself at work”.

Self-efficacy: this variable was measured using an eight-item scale developed by Chen et al. [ 50 ]. This scale contains items such as “I will be able to achieve most of the goals that I have set for myself” and “When facing difficult tasks, I am certain that I will accomplish them”.

Control variables: this paper investigates the effects of organizational human resource management policies, self-efficacy, and self-management on organizational resilience from the perspective of human resource management. To make the questionnaire data as accurate as possible, the gender, age, and education of employees are used as control variables in this paper to reduce the influence of errors on the analysis of the relationships among variables.

4.1. Common Method Biases Test

This study draws on Podsakoff et al. [ 51 ] to procedurally reduce homogeneous method bias by selecting different spatial survey respondents, anonymous surveys, and partial question item reversal settings at the time of data acquisition. Harman one-way analysis of variance was used to measure the presence of severe common method bias. The results of the SPSS 22.0 test revealed a total of six factors with eigenvalues greater than one for the unrotated exploratory factor analysis. Additionally, the maximum factor variance explained was 28.22%, which was much less than 40%; thus, there was no serious common method bias in this study.

4.2. Reliability and Validity Tests

First, this study used SPSS 22.0 and AMOS statistical software to analyze the data from 379 samples. Internal consistency tests were conducted based on the criteria of whether the coefficient of internal consistency was greater than 0.7 and whether the coefficient of internal consistency would increase after the deletion of a question item. The test results are described in Table 1 . The Cronbach’s α values of all variables are above 0.90, and the deletion of any question item does not increase the Cronbach’s α value significantly, indicating that the variables have good internal consistency. The CR values are all greater than 0.90, and the AVE values are all greater than 0.55. This indicates that the variables have good composite reliability.

Reliability test results for each variable.

Note: SHRM represents Strategic Human Resource Management; SM represents Self-Management; SE represents Self-Efficacy; OR represents Organizational Resilience.

Second, this study developed confirmatory factor analysis models for strategic human resource management, self-management, self-efficacy, and organizational resilience and conducted confirmatory factor analysis on the research models using AMOS. The results showed that all model indicators met the statistical benchmark values (χ 2 /df = 2.658, RMSEA = 0.066, CFI = 0.905, IFI = 0.905), thus indicating that the model goodness of fit well. In addition, the fit indices of the randomly selected two-factor model and those of one-factor and three-factor models were compared, as shown in Table 2 . The results showed that the fit indices of the original model were significantly better than those of the one-factor, two-factor, and three-factor models, thus indicating that the original model had good discriminant validity.

Results of validation factor analysis.

Note: *** denotes p < 0.001.

4.3. Descriptive Statistics and Correlation Analysis

The mean and standard deviation of each variable as well as the correlations among all the variables were analyzed using SPSS 22.0, and the results of this analysis are shown in Table 3 . There was a positive and strong correlation between strategic HRM on the one hand and organizational resilience (r = 0.722, p < 0.01) and self-efficacy on the other (r = 0.676, p < 0.01); the relationship between self-efficacy and organizational resilience (r = 0.711, p < 0.01) also exhibited a positive and robust correlation, thereby providing preliminary evidence to support the research hypotheses.

Means, variances, and correlation coefficients of the variables.

Note: ** denotes p < 0.01; SHRM represents Strategic Human Resource Management; SM represents Self-Management; SE represents Self-Efficacy; OR represents Organizational Resilience.

4.4. Test of Mediation Model with Moderation

In this paper, we refer to Wen [ 52 ] with the moderated mediation model test method to test the mediation model first, and, on the basis of significant mediation effect, we conduct the moderated mediation model significance test to verify whether each model proposed in this paper is significant.

First, this study tested the mediating effect on the relationship between self-efficacy on strategic HRM and organizational resilience using Model 4 (mediating model) in the SPSS macro developed by Hayes [ 53 ]. The results of this test are shown in Table 4 . Strategic HRM has a significant positive effect on organizational resilience (B = 0.711, t = 19.952, p < 0.001); strategic HRM has a significant positive effect on self-efficacy (B = 0.568, t = 17.180, p < 0.001); and self-efficacy has a significant positive effect on organizational resilience (B = 0.459, t = 9.098, p < 0.001). In addition, the upper and lower limits of the bootstrap 95% confidence intervals pertaining to the direct effect of strategic HRM on organizational resilience and the mediating effect of self-efficacy do not contain 0, as shown in Table 5 , thus indicating that strategic HRM affects organizational resilience not only directly but also indirectly via the mediating effect of self-efficacy, with the direct and indirect effects accounting for 63% and 37% of the total utility, respectively.

Mediated model test of self-efficacy.

Note: * denotes p < 0.05; *** denotes p < 0.001; SHRM represents Strategic Human Resource Management; SM represents Self-Management; SE represents Self Efficacy; OR represents Organizational Resilience.

Decomposition of total utility, direct effects, and mediating effects.

Second, the moderated mediation model was tested using Model 15 in the SPSS macro prepared by Hayes (2012) [ 53 ]. The results of the test are shown in Table 6 and Table 7 . After including self-management in the model, the product term of strategic HRM and self-management has a negative effect on organizational resilience (B = −0.144, t = 6.617, p = 0.01). Furthermore, the moderating effect of self-management contains 0 between the upper and lower limits of the bootstrap 95% confidence intervals at the eff1 (M − 1SD) level. In comparison, this effect does not contain 0 between the upper and lower limits of the bootstrap 95% confidence intervals at the eff1 (M + 1SD) level, thus indicating the significant moderating effect of self-management. The product term of self-efficacy and self-management positively affected organizational resilience (B = 0.137, t = 6.617, p = 0.001). Further simple slope analysis indicated that the effect of strategic HRM on organizational resilience tends to decrease gradually as the level of self-management increases and that the effect of self-efficacy on organizational resilience tends to increase in this context, as shown in Figure 2 a,b.

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( a ) The moderating role of self-management in the relationship between strategic human resource management and organizational resilience; ( b ) the moderating role of self-management in the relationship between self-efficacy and organizational resilience.

Mediated model tests with moderation.

Note: * denotes p < 0.05; ** denotes p < 0.01; *** denotes p < 0.001; SHRM represents Strategic Human Resource Management; SM represents Self-Management; SE represents Self-Efficacy; OR represents Organizational Resilience.

Direct and mediated effects at different levels of self-management.

5. Discussion

Based on the conservation of resources theory and self-cognitive theory, this study takes employees in Chinese culture as the research object and explores the mechanism and boundary conditions of strategic human resource management on organizational resilience. The three aspects of human capital, social capital, and psychological capital are explained to ensure that the human resources of a company fit with the corporate strategy to ensure that the strategic goals of the company match with the external environment, and that the internal resources are rationally allocated to promote the organizational resilience. Self-efficacy, as an emotional ability, is an employee’s attitude and belief about the company’s ability to cope with crises. Organizational resilience is a corporate soft capability embedded in employees’ knowledge, skills, and traits. Thus, employees’ beliefs about achieving strategic human resource management goals will influence employees’ performance in times of crisis and thus the ability to perform with organizational resilience. Therefore, the potential impact of self-efficacy on the performance of organizational resilience capabilities cannot be ignored. The impact of self-management on organizational resilience is uncertain. Self-management can enhance the positive impact of strategic HRM on organizational resilience but hinders the positive impact of self-efficacy on organizational resilience.

  • (1) Hypothesis 1, that strategic HRM in the Chinese context facilitates organizational resilience, was confirmed. Facing a VUCA environment, business operations are fraught with many uncertainties, a point which is especially salient to this study since it was conducted in the middle of the novel coronavirus pandemic, which has had a massive impact on the global economy and people’s lives. To address this major crisis that can reshape the global economic landscape, it is imperative for companies to adjust their corporate strategies and long-term development plans, encourage their employees to respond to the associated challenges actively, and transform the crisis into an opportunity for growth. The empirical study of strategic human resource management and organizational resilience in the face of crisis shows that strategic human resource management can actively transform corporate development strategies, reorganize and reallocate corporate human resources, lead companies to adapt to changes quickly, act flexibly and innovate actively, and have a positive effect on the improvement of organizational resilience. Accordingly, strategic human resource management is an effective way in which enterprises can ensure their survival and obtain competitive advantages in the face of a crisis.
  • (2) This study tested hypothesis 2, that strategic human resource management has a positive effect on self-efficacy, hypothesis 3, that self-efficacy has a positive effect on organizational resilience, and hypothesis 4, that self-efficacy mediates the effect of strategic human resource management on organizational resilience. Based on the argument that strategic human resource management positively affects organizational resilience, this study further argues that strategic human resource management can enhance organizational resilience by increasing employees’ self-efficacy. Self-efficacy refers to an employee’s strong belief in his or her own ability to do his or her job and accomplish the associated tasks. Self-efficacy enables employees to act rationally in times of crisis, to believe that the company has the strength to deal with the crisis, to respond positively to the company’s HR policies and practices, to unite with colleagues, and to dare to solve corporate problems in innovative ways. Self-efficacy enables the company’s strategic human resource management policies and practices to be implemented quickly throughout the company, thereby enhancing the company’s operations and flexibility in times of crisis and enabling the organization to recover quickly from a crisis and respond to a variety of environmental challenges, thus enhancing the organizational resilience that allows the organization to deal with complex environments.
  • (3) Hypothesis 5 was tested, that is, the positive moderating role of self-management in the effect of self-efficacy on organizational resilience. Self-management has a nonnegligible impact on the effect of self-efficacy on organizational resilience. The achievement of corporate strategic goals is ultimately based the actions taken by employees at work, and the self-management ability of employees is related to the efficiency and effectiveness of policy implementation. Employee self-management motivates employees to combine corporate goals with their own internal needs, set their own goals, actively access and use external information and resources, assess the gaps between goals and actual performance as well as the difficulties associated with crossing those gaps, and choose creative action paths to achieve their goals. Thus, self-management ability can enhance the organization’s sensitivity to the external environment, thus allowing the organization to prepare for crises in advance to ensure that employees can act with plans and goals in times of crisis, thereby enhancing their self-efficacy and making full use of their creativity and professional skills; given such preparation, the organization can smoothly survive the crisis and continue normal operations or even increase the prosperity of the enterprise.
  • (4) Hypothesis 6 was also tested, that is, the negative moderating role of self-management in the effect of strategic HRM on organizational resilience. Self-management negatively influences the impact of strategic human resources on organizational resilience. Previous research on self-management has focused on the positive effects of self-management on business management, such as its effects on business performance, employee satisfaction, employee happiness, and creativity. However, this study finds that employee self-management capabilities at the strategic level may be detrimental to organizational resilience. The original driving force behind the role of self-management is rooted in the deep-seated needs of employees. In times of crisis, if adjustments to corporate strategies and resource reorganizations deviate from the goal of self-management, employee self-management may impede or jeopardize the implementation and achievement of corporate strategic goals. Self-management causes the organization to become slow to act, rigid in its operations, and inflexible and insensitive in times of crisis, and it is detrimental to the development of organizational resilience.

Based on these findings, this paper argues that strategic human resource management is conducive to the enhancement of organizational resilience and is a possible way in which organizations can cope with potential crises and turbulent business environments. Strategic HRM allows companies to create innovations in their organizational staffing structures and systems actively, thereby enhancing the ability to self-repair and self-rebound at the organizational level; it allows companies to respond to the diverse and constantly changing needs of the market and customers and enhance the adaptability and flexibility of the organization, which is crucial for the organization’s competitiveness in the market.

6. Conclusions

Strategic human resource management facilitates organizational resilience capacity enhancement and is a possible path for organizations to respond to potential crises and turbulent business environments. Strategic HRM facilitates companies to actively innovate their organizational staff structure and system, enhance the ability to repair and rebound at the organizational level, respond to the diversified and changing needs of the market and customers, and enhance the adaptability and flexibility of the organization to the market. This is the reason why many companies are consciously implementing strategic human resource management. Thus, strategic HRM is a possible path for Chinese companies to enhance organizational resilience.

6.1. Theoretical Contributions

  • (1) This paper expands the conservation of resources theory and discusses important antecedent variables that facilitate the organization’s ability to exhibit organizational resilience. Organizational resilience is an essential resource and capability that allows companies to adapt to changes actively following a crisis, seek opportunities for survival and innovation, and overcome difficulties and achieve counter prosperity. In a dynamic and changing business environment and given human-centered management trends, it is crucial to clarify the manner in which strategic human resource management can enhance organizational resilience. Managing and utilizing the company’s employees well in a manner that takes advantage of the company’s talent and allows the company to cope with an unpredictable business environment has become a hot topic for both corporate managers and academic researchers. This paper focuses on the ways in which a human resource management model that fits with corporate strategy can enhance employees’ self-efficacy and thus organizational resilience, thereby providing a new perspective on the relationship between strategic human resource management and organizational resilience, theoretically considering possible ways of enhancing organizational resilience, and helping expand research on the mechanisms underlying the impact of strategic human resources.
  • (2) This paper validates the important influence effect of self-efficacy, and it explores the relationship between strategic human resource management, self-efficacy, and organizational resilience from the perspective of conservation of resources theory and self-cognitive theory, using strategic human resource management as an antecedent variable of self-efficacy, which helps to understand the intrinsic correlation between strategic human resource management, self-efficacy, and organizational resilience in depth. The mechanisms of how strategic HRM affects organizational resilience have been unclear in past previous research. This paper explores the “black box” of the relationship between the mechanisms of strategic HRM’s impacts on organizational resilience through the self-efficacy variable and highlights the vital role and value of self-efficacy in organizational resilience.
  • (3) This paper analyzes the theoretical mechanisms and boundary conditions according to which organizational resilience can function in crises. Regardless of the uniqueness and effectiveness of the strategies and responses that are adopted by enterprises, these strategies and responses must be implemented and facilitated by employees. Therefore, in times of crisis, enterprises should pay more attention to employees’ psychology, attitudes, and abilities, stimulate their creativity and motivation, and take the best path of action. Therefore, this paper includes self-management as a moderating variable to deepen our understanding of organizational resilience at the enterprise human resource management level. Through theoretical extrapolation and empirical research, the paper reveals that employees’ self-management is not conducive to the promotional effect of strategic HRM on organizational resilience, a conclusion which differs from the findings of many previous studies regarding the positive effects of self-management on enterprises; the paper thus argues that the promotional effect of self-management on enterprise management must have an appropriate background and conditions.

6.2. Practical Implications

Previous research has failed to answer the question of why some companies can transform themselves and survive when faced with a significant crisis, whereas others fall apart. This paper has significant practical value for understanding the ways in which strategic human resource management can help companies survive and grow in a dynamic environment by enhancing organizational resilience when faced with a crisis and uncertainty.

First, enterprises should actively guarantee that their corporate strategies match their human resource management to ensure that human resources can serve as critical capital to help enterprises survive the crisis and achieve their strategic goals smoothly. The novel coronavirus epidemic is a significant test of enterprise human resource management and continuous operation and development. Companies should optimize their corporate strategies and human resource structures continuously as part of their daily operations and should focus on the power of talent. When facing a crisis, companies should be skilled at exploring the potential opportunities associated with the challenges, thereby improving the cohesiveness of employees, taking full advantage of the creativity of employees, and skillfully using the company’s potential resources so that the company can endure the crisis smoothly; accordingly, the company should actively reflect on the problems and loopholes in the company’s operation after the crisis, further adjust the company’s strategic layout, and be fully prepared to deal with possible crises in the future.

Second, the enterprise should focus on improving employees’ self-efficacy and enhancing their work execution and enthusiasm. Employees are the primary capital of an enterprise and represent the only driving force for the creation of value. In an enterprise, human resource management should focus on adopting people-oriented management policies, cultivating employees’ self-efficacy, and allowing employees to realize that the enterprise values them. This paper explores the role of self-efficacy in enhancing organizational resilience from a practical perspective and shows that the enhancement and utilization of the enterprise’s organizational resilience capability ultimately depends on the power of its employees.

Finally, the enterprise should focus on employees’ self-management capabilities and simultaneously enhance its own internal management capabilities. Previous research has illustrated a variety of benefits of employee self-management on corporate performance. However, based on both theoretical extrapolation and practical research, this paper demonstrates that self-management is not beneficial to organizational development under all conditions. Only when employees’ self-goals and organizational goals are aligned do employees exert their utmost efforts to accomplish overall corporate goals. In management practice, managers should focus on employees’ career development plans and intrinsic needs to ensure that the organization’s strategy matches their jobs and to guarantee that their jobs meet their intrinsic needs.

6.3. Limitations and Prospects

This study employs a combination of theoretical derivation and empirical research. It achieves some success regarding both the theoretical and practical aspects of organizational resilience research, but it also faces certain limitations. First, this paper uses only the questionnaire method to obtain sample data, i.e., it relies on a single data source. Future research can employ experimental, interview, and other methods combined with a questionnaire to improve data accuracy. Second, the data used in this study were obtained from employees’ self-reports, and no attention was given to temporal changes when the respondents completed the questionnaires. Although this paper examined the possibility of common method bias using Harman’s one-way analysis of variance method, the results of which were within an acceptable range, the effect of common method bias could not be avoided entirely. Future studies can reduce common method bias by obtaining objective data from companies or enhancing the design of the study. Finally, this study explored only the mediating variable of self-efficacy. Future research can explore other mediating variables associated with the relationship between strategic HRM and organizational resilience from other perspectives with the aim of gradually improving the research on the mechanism underlying the effects of strategic HRM and organizational resilience.

Funding Statement

This research was funded by Natural Science Foundation of China grant number 42201224 and the Innovative Team Development Project of Inner Mongolia Higher Education Institutions, grant number: NMGIRT2206.

Author Contributions

Conceptualization, J.Y. and L.Y.; methodology, L.Y.; software, L.Y.; investigation, L.Y.; resources, P.L.; data curation, H.L.; writing—review and editing, G.H.; visualization, H.L.; supervision, G.H.; project administration, G.H.; funding acquisition, P.L. All authors have read and agreed to the published version of the manuscript.

Institutional Review Board Statement

Ethics Committee of Shandong University (Project identification code: 3885535).

Conflicts of Interest

The authors declare no conflict of interest.

Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

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Strategic importance of Human Resource Planning

Human resources planning (HRP) is the process of forecasting future human resources requirements to ensure that the organization will have the required number of employees with the necessary skills to meet its strategic objectives. HRP is a proactive process, which both anticipates and influences an organization ’s future by systematically forecasting the supply of and demand for employees under changing conditions and by developing plans and activities to satisfy these needs. Effective HRP helps an organization achieve its strategic goals and objectives, achieve economies in hiring new workers, make major labour market demands more successfully, anticipate and avoid shortages and surpluses of human resources , as well as control or reduce labour costs.

HRP has recently become a key strategic priority not just for HR departments but for strategic business planners as well. The existing labour shortage in Canada is forecast to increase to 1 million workers over the next 15 years.1 Currently, Canada is in the beginning stages of a major labour shortage. As the baby boom generation begins to retire, there are not enough candidates to fill vacant positions. On average, two out of every three job openings over the next decade will be focused on replacing retiring workers. In addition, fertility rates in Canada continue to decline, resulting in fewer possible workers for the future labour force. Combined, these conditions create a situation of fierce labour competition, further increasing the importance of effective HRP. Figure 5.1 highlights occupations that are currently facing a labour shortage or ones that are expected to face a labour shortage by 2015. HRP will be absolutely essential for successful strategy implementation.

As illustrated in Figure 5.2, key steps in the HRP process include analyzing forecasted labour supply, forecasting labour demands, and then planning and implementing HR programs to balance supply and demand.

Lack of or inadequate human resources planning within an organization can result in significant costs when unstaffed positions create costly inefficiencies and when severance pay is required for large numbers of employees being laid off. It can also create situations in which one department is laying off employees while another is hiring individuals with similar skills , which can reduce morale or productivity and can often result in turnover . The greater concern is that ineffective HRP can lead to an organization ’s inability to accomplish short-term operational plans or long-range strategic plans.

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