- SHRM is the process where HR supports company objectives through specific strategies and practices, optimizing internal areas like talent management, leadership development, and performance management.
- Traditional HR is reactive, while SHRM is proactive, aligning deeply with company objectives and having measurable goals instead of tasks.
- Knowing the company, SHRM aligns HR activities, develops tactics and strategies, and executes the plan, continuously monitoring and adjusting as needed.
- Lightsource Global is a leading EOR service provider applying SHRM principles, seamlessly connecting international companies with top-tier U.S. talent. Contact us today to get started!
Human Resources is an essential area for all companies since it’s in charge of managing everything related to employees. However, in recent decades, the relationship between companies and their HR team has had to evolve. Employee management is now part of the company’s overall growth strategy.
This is called Strategic Human Resource Management, and it’s the contribution of the HR area to the growth of the company and the achievement of business goals.
This blog will give you a complete guide on how to start implementing SHRM in your company and what steps you must follow so that HR can play a primary role in your growth.
What Is Strategic Human Resource or SHRM?
SHRM was developed in the 1990s, through the work of different authors who helped shape the concept, how it worked, and how it interacted with the rest of the company.
Today, SHRM is the process through which a company’s HR team supports its objectives with strategies and practices specific to its area. These strategies are designed to maximize the potential of internal areas such as strategic planning, talent management, leadership development, organizational design, and performance management.
These practices include hiring, promoting, and rewarding employees, building and maintaining high-performance work cultures, and organizational design to add value and achieve a competitive advantage.
However, SHRM is not a methodology with instructions, but a series of practices implemented in companies based on analyzing their strengths and weaknesses.
“Strategic HR is part of examining how human capital might directly influence a team’s growth.”– knowledgehut.com
What Is the Difference Between HR and SHRM?
Traditionally, HR is considered an administrative team only necessary to comply with labor laws. However, this vision has had to change with the arrival of Strategic Human Resource Management.
The main differences are HR’s relationship with the company and employees.
Traditional HR is reactive, meaning it does not foresee the future; it solves issues but does not plan. Work is based on tasks to be accomplished, but the impacts are never analyzed. On the other hand, strategic HR knows the company in depth and is aligned with its objectives.
Therefore, it must plan its actions, anticipating changes and unforeseen events. Likewise, it does not have tasks; it has goals, which can be measured to see their impact within the organization.
What are Strategic HR Management Goals?
The objective of SHRM is to support business goals through practices specific to the human resources area, such as strategic hiring or training programs to achieve high-quality performance
These are some of the SHRM goals as part of a SHRM plan:
- Connecting employees to organizational goals: Good SHRM management motivates employees to achieve the company’s objectives, making them feel like it is a goal for them. In this way, the performance and motivation of employees is greater.
- Gain a competitive advantage: Knowing exactly where the organization wants to go allows HR to focus on the skills and capabilities people need to do their work. SHRM can generate a more competent and skilled workforce through effective talent management, training, and a development policy.
- Adapt to change: SHRM means continually looking to the future, allowing organizations to anticipate and adapt quickly. Plans can be adjusted to accommodate technological advances, market changes, or new workforce demographics.
How Can Businesses Benefit from HR Strategic Planning?
SHRM allows companies to make decisions considering all areas involved, even when an objective does not affect HR directly. For example, if you want to release a new product, it is important to consider whether you have the human and economic resources and how success will be measured.
SHRM is how a company can evaluate its workforce and see if this resource is up to its needs.
“An organization’s [human resource management] policies and practices must fit with its strategy in its competitive environment and with the immediate business conditions that it faces.”– Michael Beer, author of the book “Managing Human Assets”.
Strategic Human Resource Management Best Practices for Your HR Plan
How do you start making a SHRM plan?
1. Know Your Company’s Goals and Abilities
Often, managers or business owners believe that they have more and better resources than they have or underestimate their assets. A good strategy for this is to make a SWOT analysis using the following questions:
- What are your strengths?
- What are your weaknesses?
- Where are your opportunities?
- What are your threats?
When you are clear about the current state of your company, you can start asking yourself other questions to understand the business on a deeper level:
- What are the long-term objectives of the organization?
- What are your current resources?
- What skills does your workforce currently have? Are there gaps?
With this information, you can now articulate your objectives in the short, medium, and long term. The best way to do this is in the form of OKR or Objectives and Key Results, which you can divide into smaller objectives or actions known as KPIs or Key Performance Indicators.
The advantage of these methodologies is that they will allow you to quantitatively measure whether you are achieving the set objective and whether the different areas are doing their part.
2. Align HR Activities With the Strategy
Since you are clear about your company’s objectives, strengths, and weaknesses, it is important to include your HR team in the strategy so that they can take the necessary actions.
These human resources activities must favor the different areas that affect the objectives, such as recruitment, selection, performance management, compensation and benefits, and more.
For example, if you identify a skill that your team lacks, you should look for that skill in your new hires, but you should also train your current employees; this way, you can make up for the lack of that knowledge more quickly and align your entire workforce.
3. Develop Implementation Tactics and Strategies
Since you know your company and how it works, it is easier to think about what strategies you will implement and the tactics you will use. Here are some strategies:
- Change Strategy: This means changing the current status quo or speeding up already underway changes.
- Reinforcement Strategy: Involves reinforcing existing practices and policies.
- Innovation Strategy: Introducing new ideas and processes.
In terms of tactics used to implement your strategies, these are the two most common options:
- 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 you think about which one you want to implement, focus on the result you expect from them.
4. Execute Your Plan
Finally, start executing your SHRM plan. Remember that you should monitor the results. See if it is progressing as you thought or if you should adjust or pivot the whole strategy. Plans are not written in stone and can change at any time. You must be ready for that possibility as well.
Meet Lightsource Global: Real HR Solutions
At Lightsource Global, we are a leading provider of employer-of-record (EOR) services, seamlessly connecting international companies with top-tier U.S. talent and incorporating a Strategic Human Resources Management approach that aligns with your organizational objectives.
Our innovative solutions eliminate the complexities of establishing a physical presence or acquiring an Employer Identification Number (EIN) for hiring in the U.S., allowing you to access the U.S. market quickly.
With a commitment to compliance and accuracy, our services span EOR, payroll processing, benefits administration, and comprehensive Human Resources outsourcing. Our experienced team, well-versed in U.S. labor practices, ensures your employees are paid on time and following local, state, and federal regulations.
At Lightsource Global, we offer unparalleled versatility, enabling you to design a workforce strategy that fosters success. Choose us as your bold partner, delivering real HR solutions and opening the door to unparalleled HR recruiting and outsourcing experiences.