What is Strategic Human Resource Management (SHRM) and Why is it Important?

What is Strategic Human Resource Management (SHRM) and Why is it Important? | Human Resource Management | Emeritus

In recent decades, especially in the digital era, it was being felt that HR was at risk of being relegated to a role separate from those that are integrated into core business goals. Moreover, the complexities of operations with rapidly changing work conventions made the HR leaders focus on playing a major role in enhancing workplace productivity to help the businesses gain an edge in the market. This is where the concept of Strategic Human Resource Management (SHRM) comes into the picture. It is a modern approach to human resource management which distinguishes itself from the routine HR practices of organizations.

What is Strategic Human Resource Management (SHRM)?

 Strategic Human Resource Management (SHRM) is a process of managing human resources that links the workforce with the core strategies, objectives, and goals of an organization. It focuses on the following aspects of HR operations:

  • Ensuring practices that foster flexibility and give a competitive advantage to the organization
  • Building a cultural fit for the organization
  • Ensuring superior business performance

Since it is essentially a contemporary approach to human resource management, the HR department has to play a key role in making SHRM successful. HR managers need to gain a deeper understanding of SHRM in order to be an active partners in creating company policies and implementing them.

Strategic HR management can be integrated into various functions including hiring, training, and rewarding the workforce for their performance. The SHRM approach finds ways for the HR personnel to make a positive and direct contribution to the company’s growth. There has to be a strategic plan related to every employee’s development and retention in sync with the long-term business goals.

In the modern world, especially in the post-pandemic era, it is not easy for all businesses to overcome HR challenges. There are various components of the HR ecosystem that can be confusing for employers and lead to ineffective decisions. Consequently, there could also be a loss of productivity and a slow down of business growth.

Strategic Human Resource Management: An Integrated Approach

Unlike a conventional system, companies that apply strategic human resource management principles, don’t have HR as a department that is separate from other verticals such as IT, operations, or marketing. Rather, they work in tandem with other departments to create an understanding of their goals. This helps in building strategies that are well aligned with those goals and overall objectives of the company. Through such an integrated HR management, the human resource department becomes a key enabler of the business growth, and not just a mandatory service that is limited to hiring and paying the employees. Further, the strategic human resource management also focuses on better utilization of talent and opportunities available within the department to benefit other departments.

Importance of Strategic Human Resource Management (SHRM)

Businesses that ensure collaboration amongst all teams, and synchronized working towards common objectives, succeed faster. By applying strategic HR practices, employees can be analysed and the actions that will lead to value addition for the company, can be identified. If a company’s HR personnel don’t know much about strategic human resource management, they can enrol for HR courses online to understand the concepts thoroughly and implement the same in the organization. There are various benefits of applying strategic human resource management for any business. These include:

  • Increased job satisfaction
  • Better work culture
  • Improved rates of customer satisfaction
  • Efficient resource management
  • A proactive approach to managing employees
  • Productivity boost

However, to effectively implement SHRM, the business leader(s) and the HR head should be on the same page, or else there could be several challenges faced, such as:

  • Cross-cultural issues and lack of engagement between stakeholders
  • Global operations leading to disconnect
  • Changing business leadership in companies that undergo M & A
  • Changes in the business environment such as the pandemic outbreak
  • Changes in technology used

How Does SHRM Work?

Strategic Human Resource Management is essential for retaining the best talent and developing human resources. It focuses on making employees feel valued and engaged so that they are motivated to stay with the company. However, before moving forward, you will need to create a strategic HR planning process following these steps.

  • Cultivate an in-depth understanding of the organization’s objectives
  • Assess the capabilities of the HR team
  • Analyse the existing HR strength in view of your objectives
  • Assess the HR needs for the business as it grows
  • Find out what technology or resources employees need to perform well
  • Deploy the human resource management strategy devised on basis of above evaluation
  • Check for effectiveness and take corrective actions wherever needed

Irrespective of the field or industry you talk about, strategic human resource management has become essential for every business. It is not something only for large enterprises or companies with hundreds of employees. In fact, right from the outset when a business focuses on scaling, SHRM principles can enhance the speed of growth. Having said that, let’s take a look at what are the objectives of this modern approach to HR.

Objectives of Strategic Human Resource Management

Strategic HRM primarily focuses on resolving matters such as organizational culture, hierarchy structure, effectiveness of operations, resource-role matching, and performance challenges. Ideally, there are 5 primary objectives of SHRM approaches:

  1. Resource-based Strategy:  Focuses on enhancing the strategic capabilities of the company
  2. High Commitment Management: Establishing better commitment between managers and their employees.
  3. Achieving Strategic Fit: Integration of workforce and material resources through a streamlined and high ROI oriented operational model
  4. High Involvement Management: Empowering and treating employees as stakeholders.
  5. High-Performance Management: Enhancing company performance through superior productivity, growth, and profitability rate of the workforce.

Lucrative Career Opportunities in SHRM

Now that you know what is SHRM, we must also take a look at the career opportunities and requirements for the same. As businesses grow faster, and operations are now being realigned to ensure growth in the hybrid work environment of the future, the demand for people with SHRM certificates is growing exponentially. There are numerous institutes that offer human resource management courses, and leading institutes like Emeritus offer the best HR courses online as well as in-person. So, if you are already employed in the field of human resources, and wish to advance your career, you can choose one of the best HR management courses offered by Emeritus. It will not only familiarise you with what is strategic human resource management but also offer you an SHRM Certificate.

You can check various human resource management courses that Emeritus India brings to you from top-rated Indian institutes and universities. Take any of these HR courses online and give a strategic boost to your career today!

About the Author

Manager, SEO Content
Rounak Sharma, a talented author with 4.5 years of experience, excels as an SEO content manager. Specializing in finance writing, she simplifies complex concepts and provides valuable insights on personal finance, investing, and budgeting. Expert in competitive analysis and keyword gap research, Rounak formulates content strategies for organic brand growth. When she is not crafting great content, Rounak can be found on the dance floor for some well-deserved partying.
Read More About the Author

Learn more about building skills for the future. Sign up for our latest newsletter

Get insights from expert blogs, bite-sized videos, course updates & more with the Emeritus Newsletter.

Courses on Human Resource Management Category