Principles of Strategic HR Management

Workplace evolution, spurred by the pandemic, touched every aspect of human resources and catapulted the HR function to a new level of strategic importance. HR professionals have stepped up to lead their workforces through constant change.

The need for strategic HR isn’t new, though. Executives have always looked for strategic solutions to human capital problems but didn’t always know how to ask for it, said Sara Christiansen, CEO at Ideation Consulting. Christiansen joined us on a recent episode of Alchemizing HR to share her insights into practicing strategic HR.

You can use newly gained clout to maintain a strategic foothold. Here are five elements of strategic HR management to practice at your organization.

Create an Impact

We talk about employees as our biggest asset, but they’re really our biggest investment. And to demonstrate the importance of HR’s initiatives, we need to point to a return on that investment. Calculate the ROI on your human capital by comparing labor expenditures against organizational growth, Christiansen said.

What are your biggest HR expenses? On a basic level, expenses consist of wages and benefits. Track and analyze HR data related to training and development costs and other investments you make in your people, too. How do these expenses compare against your company’s growth? Determine, for instance, whether a new training program is improving the quality and efficiency of your work.

Spread Your Influence

Influence isn’t always tied to a title, Christiansen said. It’s about relationships. In HR, especially over the past year and a half, we’ve become absorbed in the work at hand, robbing us of valuable time to cultivate relationships with colleagues across the organization.

If you want to take on more strategic HR management, consider outsourcing rote HR tasks to a professional employer organization (PEO) to free up your time. If you’re able to spend more time learning about people needs and processes by department or team, you’ll be able to propose more strategic solutions.

Harness Inspiration

HR professionals have to have a basic understanding of the human brain, behaviors and psychology, Christiansen said. We have to be able to apply that knowledge to predict and account for behaviors in the workplace.

Human behavior can be messy and hold us back, or even become a compliance issue. But we can also find inspiration in human strengths and traits to move us forward. Help managers develop goals that optimize the advantages that each employee brings to the organization.

Drive Innovation

The ability to be proactive is a hallmark of strategic HR management. While it’s impossible to predict what’s coming, Christiansen said, we have to use evidence-based HR practices to anticipate and prepare for potential changes.

Take performance management, for example. We’ve seen iterations of the same performance management system over and over again. It’s time to innovate something entirely new, broken into its three parts: evaluation, elevation and compensation. Since the goal is to elevate performance, these separate but overlapping areas shouldn’t be jammed into a single performance management system.

Foster Integration

There’s often a disconnect between what operational leaders are looking for and what HR actually delivers. HR professionals can get caught up in jargon, Christiansen said, making it difficult to integrate our processes with those of other business leaders.

We have to understand the day-to-day HR challenges employees are facing and apply our strategic HR management expertise to solve them. We need to think about how we recruit, promote and train managers, for example. How do we train behavior that truly drives performance?

One way is to change the job title from “manager” to “coach,” Christiansen says. Coaches enable performance. They’re motivated to see others succeed, and they enjoy encouraging success from the background rather than micromanaging details at the front. This change in title seems small, but it gets to the heart of how strategic HR can support the business.

Watch the recording for recertification credit.