Strategic management has become increasingly important in human resources because today, organizations are operating in a knowledge economy that demands employees to contribute ideas and participate in implementing the firm’s strategies (Holbeche, 2009). Therefore, strategic management has become a strategic partner as it identifies the skills, which employees require, and then provides employees with the structures and training appropriate to develop and use these competencies. The HR department must align all the components of HR (job design, employee selection, placement and compensation) with the firm’s strategies ( Mihelič, 2017). This allows the company to hire the right people for the right positions and reward them properly for their contributions in furthering the achievement of the firm’s objectives.
The increasing role of strategic management in HR gave birth to a new field known as strategic human resource management. SHRM refers to how an organization plans to achieve its goals and objectives through its human resources by way of integrating HR policies, HR strategies, and practices (Holbeche, 2009). SHRM focuses on formulating strategic priorities and practicing strategic choice. It also concerns with the implementation of strategies and the strategic behavior of HR managers who work with other managers daily to see that the organization achieves its goals and values are practiced.
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SHRM forms the basis for the development of methodologies used to management people in the long term (Bliss, 2006). This helps an organization to attain a competitive advantage. In HR, strategic management serves a perspective on how a company should address the success factors and critical issues of its people (Bliss, 2006). For instance, it provides strategic decisions whose focus is long term and influences the company’s performance either in its failure or in success. The purpose of strategic management in HR is to build special capabilities through guaranteeing that the business has all it requires from motivated, devoted, skilled and highly professional staff to develop and sustain a competitive edge in its respective industry (Mihelič, 2017). It aims to offer guidance and direction for individuals within a firm, particularly in a turbulent business climate, through enacting numerous HR policies and programs. Also, when it comes to HR, strategic management takes into consideration the benefits and interests of all stakeholders in an organization (Bliss, 2006). This implies that besides the workforce, the owners, management, and customers of the firm are also important people that a firm must consider in its strategies before implementation.
SHRM is divided into soft and hard (Stroble et al. 2015). The soft SHRM focuses on the employees’ wellbeing, security, work/life balances, and the internal organizational communication processes. The hard SHRM considers before any strategic policy or decision implementation, the profits likely to accrue as a result of investing in human resources (Bliss, 2006). In essence, firms adhering to an effective strategy and rallying its people to accomplish business goals must hire and retain skilled human resources through the use of soft SHRM. But, many firms tend to prioritize hard SHRM, and this cannot be perceived negatively based on business circumstances. However, research demonstrates that effective SHRM combines the soft and hard components to attain a balance for all stakeholders to benefit (Mihelič, 2017).
Recently, typically, all organizations have acknowledged the important role played by strategic management in HR. However, the key distinction between those who fail and those who succeed is that the manner in which strategic management is carried out and practiced marks the difference between failure and success. Definitely, a few firms have not realized the importance of incorporating strategic management in their HR practices. For these firms to achieve success and enjoy longer-term visibility in their markets, they ought to recognize the advantages of strategic management in HR.
References
Bliss, W. (2006). Business literacy for HR professionals: Essentials of strategy. Boston. Massachusetts.: SHRM/Harvard Business School Press.
Holbeche, L. (2009). Aligning human resources and business strategy . Oxford, England: Butterworth-Heinemann.
Mihelič, K. K. (January 01, 2017). Talent management is a strategic priority of HR specialists and senior leaders. The Slovenia Times, 14.
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.
