(Editor’s Note: Today’s article is brought to you by Victoria University Business School, located in Australia. Victoria University’s online master’s in business administration program (MBA) was awarded a tier-one rating in CEO Magazine’s 2019 Global Rankings. Congrats to them! Enjoy the article!)
Today I want to talk about a subject near and dear to me. I want to talk about us. Meaning I want to talk about human resources. HR managers are incredibly important to a business’ success. They help recruit, engage, upskill, and retain employees. They are an integral component to the growth of a business in a constantly evolving digital landscape.
As such, human resources professionals need to be lifelong learners. The strategic HR management principles and practices we learned years ago, might be less than strategic today. And without a modern strategic HR management team that is focused on adaptive and flexible employee development, businesses are at risk of losing employees. According to an article from the Society for Human Resource Management (SHRM), those annual turnover costs could increase to $680 billion by 2020.
4 Strategic HR Management Activities That Need Our Focus
So, what strategic HR practices can we focus on to help the organization achieve its goals? Here are four areas where keeping our knowledge and skills current will not only help to retain employees but assist in building a strong company culture to drive success on a local and global scale.
1. RECRUITING: HR facilitates the process of hiring the right people.
One clear area where HR managers have a significant impact on a business’ global success is through the hiring process. Investing time into developing a recruiting strategy and not rushing through the process helps the organization make better hiring decisions.
We can practice strategic HR management by clearly outlining the company’s expectations, both in a general business as well as a role-specific sense. Clear and consistent recruitment marketing messages will yield the most suitably qualified candidates. During the interview, this helps the hiring manager focus on the job requirements and whether the candidate has the right practical skills that can help their business succeed on a global scale.
Not only do technical capabilities play a part in selecting the right hire, but soft skills do as well. In fact, studies from Robert Half showed 87% of business leaders found that their most successful hires had values, beliefs, and a general business outlook that aligned with the business.
2. DEVELOPMENT: HR creates formal and informal learning opportunities.
Learning and professional development opportunities are a key way that HR managers play a role in business performance. Training and development activities also help the business ensure that they have the relevant skills to compete in today’s global economy (see number one).
Technology and other innovations have redefined work. As such, we can practice strategic HR management by ensuring that continual soft skills and technical skills training and development are available for all employees. By developing evolving knowledge and skills, HR can help provide employees with continued growth and a career path from their current position. This has a direct impact on both employee engagement and turnover. According to a report from Mercer, 78% of employees said they would remain longer with their employer if a long career path was visible in their current workplace.
3. COMPLIANCE: HR ensures that the company maintains compliance with employment laws.
Regardless of where your organization is located, we’re truly a global economy. Especially with the latest advances in technology. We have the ability to interact with people and businesses all over the world.
While labor laws differ vastly from country to country, most countries have strict laws in the area of employment (specifically in terms of recruitment, immigration, discrimination, terminations, employment contracts, etc.) We can practice strategic HR management by ensuring compliance in this area. In addition, HR needs to know when to seek outside counsel, possibly in the case of the organization merging or acquiring a new entity. Or hiring employees in another country.
Non-compliance of employment law can have a severe impact, not just in terms of financial penalties, but also brand and reputational damage. HR should make compliance a priority to avoid any potential legal issues, minimize organizational exposure, and any liability that can come from allegations of employee mistreatment.
4. QUALITY: HR is responsible for effectively and efficiently managing their role.
I’m not sure we talk about this aspect of strategic HR management nearly enough. As human resources professionals, we have a department and function to run and we’re expected to run it well. This means managing costs and quality control.
We can practice strategic HR management by balancing short-term business needs with long-term value. It could involve evaluating employee compensation packages and relevant benefits, along with any programs that may help with recruitment and retention. On the cost-control side, HR could partner with operational managers to develop cross-functional teams that would maximize employee performance while minimizing the cost of bringing in new staff (see number two).
Quality control also is a big component of our role. We must lead the way with functional management skills that ensure the successful delivery of business objectives. HR is responsible for implementing systems that will work for the betterment of the organization.
Strategic HR Management Doesn’t Happen Overnight
The business world is constantly changing, and we need to be able to change along with it. Because talent is a business differentiator, strategic HR management is just one of the functional, analytical, and financial skills demanded of today’s business leaders.
Whether you’re a business leader or human resources professional, it’s important to grow these skills. One way you can do that is by studying for an MBA. It would allow you to grow your skills and provide you with the foundation to stay current in today’s evolving work landscape.
Image captured by Sharlyn Lauby while exploring the streets of Orlando, FL19