Strategic human resource management: A guide for success

According to a Gartner survey, 70% of CEOs expect HR to play a leading role in business strategy. HR departments are at their best when they become a part of the bigger picture: improving the employee experience which, in turn, drives companies forward. 

While there’s no shortage of important administrative tasks people teams need to handle, strategic human resource management challenges them to look beyond manual work and partner with executives to meet long-term business goals. 

Read on for what you need to know about the strategic HR framework, why companies that use it can flourish, and how HR teams can relieve their administrative burdens, freeing up the time and resources they need to give long-term business goals the attention they deserve. 

What is strategic human resource management?

Strategic human resource management refers to the processes that align a company’s personnel with long-term business objectives. This framework differs from traditional HR management, which is typically thought of as an administrative function involving tasks like onboarding new hires with compliant paperwork, registering employees for payroll taxes, and administering benefits.

Strategic human resource management, by contrast, bridges the gap between day-to-day people operations and the company’s long term goals. Example programs include: 

• Performance management: Measuring quality of work and monitoring employee engagement
• Professional development: Administering training and providing resources to improve performance and help employees navigate their career trajectory
• Compensation: Creating total compensation packages—including salary, benefits, and equity—that attract and retain top talent
• Company culture initiatives: Implementing rewards that create a positive work environment, nurture relationships with team members, and celebrate company values

Why is strategic human resource management important?

By focusing on how today’s talent can meet tomorrow’s challenges, strategic human resource management helps companies run faster, smarter, and better. Here’s how.

Aligning talent with business goals

Strategic human resource management helps monitor whether HR policies and procedures establish a throughline between the employee experience and organizational goals. This, in turn, allows businesses to adjust to market changes and workforce transitions, support employees as the company evolves, and develop individual team members so they can progress throughout their careers. 

Enhancing employee performance

A strategic HR function allows businesses to implement surveys, check-ins, and manager reviews that improve employee productivity. 

Instead of just focusing on administrative tasks like onboarding and payroll, HR leaders can strategize on how to keep employees engaged, measure how they add value, and proactively address any skills or knowledge gaps. You can also use people analytics to track talent effectiveness across the employee lifecycle, gauge your workforce’s wellbeing, and tie promotions and raises to outstanding performance. 

Supporting organizational growth

Strategic human resource management can also forecast your company’s future workforce needs and help support growth plans. When HR professionals, recruiters, managers, and the C-suite are all aligned on your business’ short and long term goals, you open the door for better headcount planning that allows your workforce to stay adequately staffed and within budget. You can also decide when to launch into new markets, whether to ramp up hiring, and how to structure compensation and benefits to attract marquee talent. 

Addressing workforce challenges with strategic human resource management

Strategic HR helps people departments venture beyond administrative tedium and drive real business outcomes for their companies. Here are some common workplace obstacles strategic human resource management can help address. 

Managing remote and hybrid workforces

While business leaders may want their workforce in the office, employees often value the flexibility of hybrid work. Strategic HR can help navigate the remote vs. in-person conundrum.

Instead of demanding a one-size-fits-all policy, HR teams can gauge employee sentiment about where-to-work preferences, taking into account family or commuting considerations and assessing which aspects of their role can be done in vs. outside of the office. 

You can also use HR analytics to manage performance throughout your workforce, emphasizing the importance of an employee’s quality of work instead of mandating that everyone’s in the office Monday to Friday. Additionally, you can tailor policies according to which roles benefit from more face-to-face interaction vs. which are remote-friendly without any productivity drop offs. 

Retaining top talent

Replacing an employee often costs double their salary, and prematurely losing stellar talent can be a huge blow to both workplace productivity and company culture. But your best employees—always eager to take on more work—may also be the most susceptible to burnout. 

Strategic human resource planning can help ward off excessive churn. For one, it allows teams to leverage HR data from surveys of employees who left the company, taking note of why they moved on. You can also see whether employees are taking PTO and, if not, consider initiatives like “team PTO” days where everyone can enjoy a day off without fear of an overflowing inbox once they log back in.

Training effective leaders

Manager training has been 2024’s biggest priority for HR leaders. Standout individual contributors often get promoted into managerial roles that require new skills; failing to train them may impact retention and cost your company money. 

Strategic HR can provide new managers with skills training, performance review templates, and development courses that help them become effective leaders. This way, HR teams can teach department leaders about the downstream impact of their managerial decisions (like workload expectations), provide tools to make thoughtful staffing choices, and help them nurture strong work relationships with employees through check-ins and feedback loops.

4 tips to create a strategic human resource management plan

How exactly do HR teams become strategic business partners within their organization? Here are some best practices for strategic HR management that can give companies a competitive advantage while running more effectively. 

Determine business goals and what you need to meet them

Start by specifying your company’s primary strategic objectives. Think about strengths and weaknesses of your business, resources you have now and plan to need later, and the workforce skills necessary for meeting long-term goals. 

The better you can articulate your company’s goals and vision, the easier time you’ll have aligning them with your human capital strategy. After clarifying your objectives, develop your roadmap for getting there. For this strategic plan, think about your budget and how it’ll change as you scale or develop new products, where to direct recruitment resources to find the best talent, and which skills gaps you want to close with your headcount plan.  

Make the most of your employee data

Putting your workforce data to use is often the key differentiator in demonstrating HR teams’ strategic value. After all, you need to prove that investing in high-performing talent contributes to the bottom line. 

Look at all your workforce management processes across HR, finance, and payroll to see what data you have access to and which insights you can glean. Keep in mind that if you have a system with advanced workforce analytics capabilities, you’ll have an easier time connecting disparate data points, monitoring attrition rates, and aligning finance, HR, and recruiting teams on headcount targets.

Look for HR software that automates administrative work

One of the best ways to store your data is through software like an HCM, which provides a centralized repository of employee information. But your best options take things a step further by powering HR automations that effortlessly handle time-consuming manual work like onboarding, state tax registration, and compliance monitoring on your company’s behalf. This way, HR spends less time on administrative work and more time on strategic initiatives.

Focus on the entire employee lifecycle

HR challenges are often viewed in isolation from the rest of the employee lifecycle. In reality, all the disparate parts of the employee experience are interconnected. Performance issues may be a symptom of a stale recruiting strategy, for instance. And retention may be a problem because you didn’t provide mentorship opportunities during onboarding. 

If human resources departments take holistic approaches across the different stages—recruiting, onboarding, management, and retention—they can cultivate a more talented workforce. In the process, they’ll become more of a strategic partner with company leadership.  

Examples of strategic human resource management in action

Strategic human resource management isn’t just an abstract concept. Some of the world’s top companies put the process to real use to reduce turnover, boost employee satisfaction, and develop better managers. Here’s a quick glimpse of HR strategy examples in practice. 

• Google: The ubiquitous tech company conducted a long-term study called Project Oxygen to uncover traits that make effective managers. After searching for those traits, Google filled skills gaps while increasing employee satisfaction and performance. 
• Hilton: The hotel chain created a new performance management rubric known as a “balanced scorecard” to encourage a culture of constructive feedback across the company while tracking KPIs like revenue maximization, customer loyalty, and employee satisfaction. 
• Nissan: The Japanese auto manufacturer implemented a framework that encourages employees to brainstorm new ways to improve old processes, giving them autonomy to solve problems in their own way. Under this framework known as Kaizen (Japanese for “improvement”), Nissan saw productivity, safety, and quality gains across its manufacturing processes.  

Enhance your strategic human resource management with Rippling

The biggest barrier to strategic human resource management is the neverending manual work involved with hiring, managing, and paying employees. The more time HR teams spend on administrative duties, the less time they’ll have for strategic initiatives that drive businesses forward. In fact, 45% of HR leaders say their teams spend more than half their time on admin tasks.

But these administrative tasks, while monotonous, are important. Rippling automatically handles many of them, freeing up time that HR leaders can focus toward the bigger picture. 

As the top-rated HCM, Rippling offers a full suite of HR solutions—including (but not limited to) an HRIS, Time & Attendance, Benefits Administration, and Performance Management. And since every Rippling product is built with a single source of truth for employee data, the all-in-one platform can unify all your workforce management processes—HR, payroll, IT, and spend—in a single system. 

What does that mean for you and your team? Onboarding workflows automatically trigger actions like setting new hires up on payroll (including registering for applicable state taxes), administering secure laptops with pre-configured apps, and issuing corporate cards. 

With Rippling, employees have the resources they need to succeed on the job without HR teams wading through endless busy work. The upshot: more time to focus on strategic initiatives. People leaders at startups like MyPlanAdvocate and Clicklease joined Rippling, offloaded hours of manual work, and transformed the role of HR by solidifying themselves as strategic business partners at their company.

This blog is based on information available to Rippling as of September 11, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.