Strategic Human Resource Management

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Times are tough and resources are stretched, seamless Human Resource Management (HRM) is essential for every company wanting to maximise efficiency without investing a fortune.

The ancient times of the Human Resource (HR) Department, when it was seen as just a personnel management office responsible for making calculations of severance payments and generating payroll are over, at least in companies with a strategic vision. HRM can no longer be seen operating in an isolated silo as it is becoming more and more important for companies to utilise their human resources to the benefit and best interest of the company.

Strategic human resource management (SHRM) is the process of using a combination of HR techniques, like training, recruitment, compensation, and employee relations to create a stronger organisation, one employee at a time.

To do this requires that a Company directly links the HR strategies to the strategies – and ultimately the success – of the business.

So how can a company gain competitive advantage in a cutthroat marketplace? The key to the success lies in the way employees are managed. Employees should be seen as associates and considered as the most valuable asset. Taking an investment perspective towards human resources/assets is critical considering that other physical assets such as facilities, products and services, technologies and markets can be readily cloned or imitated by competition. Human assets cannot be duplicated and therefore become the competitive advantage that an organisation enjoys in its marketplace.

This is becoming increasingly important as the skills required for most jobs become less manual and more cerebral and knowledge based in nature. Rapid and ongoing advances in technology have created a workplace where laborers are being replaced by knowledge workers. An organisation’s “technology” is becoming more invested in people than in capital.

However, while investments in HR are long term, once an organisation gains competitive advantage through its employees, the outcomes associated with the strategy are likely to be enduring and difficult to duplicate by competitors as such programs and values become more firmly entrenched in the organisation’s culture. The commitment that an organisation makes to its employees through investments in them is often rewarded with the return of employees making a long-term commitment to the organisation. Although investments in human assets may be risky and the return may take a long time to materialise, investment in people continues to be the main source of sustainable competitive advantage for organisations.

Listed below are various components involved in an integrated framework for SHRM:

Strategic HR Planning

  • Strategic operational process

  • Analysing and identifying the need for and availability of HR to meet organization objectives

  • Matching job market with hiring needs

  • Company culture and requirements

  • Succession Planning

  • Creating a talent pipeline

Strategic Recruitment and selection

  • Integrating recruitment and selection with long-term objectives and strategy of the organization

  • Alignment of candidate and business objectives

  • Focus on key job positions

Strategic Training and Development

  • Strategic positioning of training and development directly promotes organizational business goals and objectives.

  • Identifying, designing and delivering training programmes in accordance with company objectives.

Strategic Performance Management

  • Link corporate strategy with targets of teams and individuals.

  • Manage employees’ performance to have direct impact on business performance.

Strategic Compensation and reward management

  • Give the right rewards for employee performances, their skills, competencies, their knowledge and experience to attract and retain them.

  • Variable pay rewards system based upon individual and team performance based on the contribution towards the achievement of organisation’s business objectives.

If a Company wants to ensure the strategic value of HR to the business, it must maintain a sharp focus on business priorities and strategy.

If SHRM is to be implemented effectively in any company, it is important to realise that it needs to be approached in an integrated manner. This will ensure that you weather the storm and increase HR’s strategic impact during 2018.

A team wins when its members support each other and work together for a common goal.

How integrated is your company’s approach?

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