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Global HR — 14 min

HR strategy expert guide (benefits & 7 steps)

The people dimension of work is too complex to manage under a general business plan. That’s why you need a separate strategy for human resources.

In this article, we’ll take a look at what an HR strategy is, why companies need one, and detailed steps for creating your own effective yet flexible HR strategy. We end with a glimpse into the future: four bold predictions on HR strategy changes over the next five years.

What is an HR strategy?

Why is it important to have an hr strategy , what are the benefits of an effective hr strategy, how do you create an effective hr strategy for your company, 5 best practices for perfecting your hr strategy , how will hr strategies change in the future, support your hr strategy with remote hr management.

An HR strategy is a comprehensive plan that aligns a company’s human resources (HR) management with its strategic goals. It covers all stages of the employee life cycle .

Key elements of a strategy for human resources include:

Optimizing talent acquisition, employee development, and retention

Building a positive workplace culture

Achieving satisfactory levels of employee engagement (especially in environments with many remote workers)

Implementing effective performance management systems

For example, let’s imagine that a technology firm wants to implement an HR strategy that focuses on attracting top talent in software development. To hire top talent , the company includes competitive salaries, flexible working conditions, and ongoing training in cutting-edge technologies as part of its HR strategy.

This kind of HR strategy helps fill immediate gaps in the business. Plus, it supports long-term goals like growing into an industry innovator.

HR departments are often looked at as stand-alone parts of a business. Some people might think HR roles are limited to hiring, payment, and performance management.

In reality, HR experts have a much bigger role throughout the business. But they do need a clear HR strategy to fully play their part for the organization. Here are some reasons why it’s important to have an HR strategy in place:

A well-articulated HR strategy serves as a bridge between an organization's overarching goals and its human capital. A good HR strategy helps experts manage human capital effectively to reach company goals.

Integrating HR processes and policies with business strategies means organizations can build a strong, cohesive company culture that reflects their values and mission. A healthy company culture is foundational for employee engagement — which is critical since 17% of US employees are actively disengaged at the workplace.

Well-defined strategies in HR provide clear direction for HR professionals. Concrete goals motivate HR experts to plan in diverse ways to reach business goals.

Proactive HR strategies in talent management — from recruitment to skill development and employee retention — make it possible for a company to always have the skills and expertise that it needs to navigate market changes and stay innovative.

Through strategic workforce planning, HR can also anticipate future talent needs and create succession plans that minimize disruptions in the workforce.

An HR strategy is not just about managing people but also leveraging human capital in a competitive marketplace.

An effective HR strategy goes beyond basic talent management. Let’s take a look at the main benefits of an effective HR strategy:

Increased employee satisfaction

A strategic HR approach addresses employees’ broad range of needs and aspirations. It offers tailored development opportunities, plus recognition and rewards systems that resonate with employees. Personalized HR strategies can reduce turnover rates by helping employees feel valued and see a clear path for growth within the company.

Better employee performance

One of the ripple effects of high employee satisfaction is a boost in performance. Engaged employees are typically more productive, innovative, and committed to excellence. All these benefits directly contribute to a company’s success.

Strategic recruitment

An effective HR strategy can improve the quality of new hires through strategic recruitment processes. Alignment between the employees' capabilities and the company's needs means new employees fit in well right from the start. This maximizes performance and minimizes the costs that result from poor hiring decisions.

Improved organizational reputation

Beyond direct benefits, an effective HR strategy can improve a company's reputation as an employer of choice. A strong employer brand is beneficial to companies when attracting and retaining top talent in a competitive job market.

Greater organizational resilience

A solid HR strategy also lays the groundwork for more organizational resilience and adaptability. This is because an effective HR strategy supports a flexible and inclusive work environment where diverse ideas and perspectives can thrive. In short, an HR strategy is not just a set of policies. It’s a dynamic framework that helps propel an organization toward its goals through its most valuable asset: people.

Creating a solid HR strategy is less complicated than you might think. Tailor the steps below to develop an HR strategy that’s helpful for your unique business needs.

1. Align your HR strategy with the company’s business goals

Begin by reviewing your company's strategic objectives. How can HR initiatives directly impact ‌organizational-wide goals? Focus only on the ones where HR can make an actual difference.

As part of this step, consider formulating a mission statement specifically for the HR team.

For example: “Our mission is to select and hire top talent and create a harmonious workplace culture where all employees prosper, thrive, put forth their best effort, and consistently achieve company goals.”

A statement like this can inspire the HR department to embrace the strategy you are developing and run with it.

2. Conduct an analysis for the HR team and staff

Systematically assess your current HR capabilities, practices, and resources. What are the strengths, and where, if any, are the gaps?

Also, evaluate the existing workforce in terms of skills, engagement levels, and performance. Use surveys, interviews, and data analytics to gather these insights if you don’t already have this data.

3. Define strategic HR objectives

Define clear, measurable HR objectives or high-level goals based on your current state analysis. Think of areas like employee satisfaction levels, turnover and talent acquisition success rates, and career and leadership tracks for the workforce.

Make sure these objectives are SMART (specific, measurable, achievable, relevant, and time-bound). Here’s an example of a SMART goal for an HR strategy related to employee engagement levels:

"Within the next year, increase the employee engagement score for both in-office and remote employees from the current 65% to 80% by implementing a comprehensive engagement program that includes monthly team-building activities, quarterly feedback sessions, and a recognition system to celebrate employee achievements. This goal supports the broader organizational objective of reducing turnover and enhancing productivity, with progress measured through annual employee engagement surveys."

This HR goal includes all the SMART components:

Specific: The envisioned engagement program includes monthly team-building activities, quarterly feedback sessions, and a recognition system to celebrate employee achievements.

Measurable: Raise the employee engagement score from 65% to 80%; HR will measure this through annual employee engagement surveys.

Achievable: This goal suggests that the HR department has the knowledge and experience to implement activities like team-building and feedback sessions or knows how to acquire the necessary skills.

Relevant: This goal specifically supports the broader organizational objective of reducing turnover and enhancing productivity.

Time-bound: Within the next year.

A good rule of thumb is to focus on three to five key goals. This makes the strategy more manageable for the HR team and the other stakeholders involved. It also allows for focused effort and adequate resources for each goal so that HR can give each one the attention it deserves.

4. Develop action plans for key HR areas

Add action steps to each of your strategic goals. This level of specificity in your action steps makes it much more likely that your strategic goals will‌ be implemented.

Here are some examples of action plans for your HR strategy:

Talent acquisition :

Design recruitment strategies that target the skills and qualities needed for the company’s future.

Together with the marketing team, consider employer branding initiatives to attract top talent.

Employee development :

Create a comprehensive training and development program for upskilling and reskilling employees.

Implement leadership development initiatives to prepare future leaders for roles with more responsibility at the company.

Performance management :

Establish a performance management system that sets clear expectations and includes continuous feedback options.

Employee engagement :

Develop a recognition and reward program to improve employee engagement.

Put a more comprehensive wellness program in place that speaks to the different needs of both on-site and remote employees.

Develop effective strategies for including remote employees and international contractors in the company culture.

Analyze exit interviews to determine areas for continuous improvement in engagement levels.

5. Formulate your HR strategy

You now have all the ingredients for a top-notch HR strategy. The next step is to put them together in a strategic plan for the department.

As you lay out this plan, it’s helpful to work from general to specific. Here’s a good order:

The HR department’s mission and vision

Key findings regarding the most important HR functionalities to include in the plan

Overarching strategic HR objectives

For each objective:

Action steps

Person(s) responsible

Detailed timelines

6. Implement the strategy

Ample communication across the organization is key to smoothly rolling out your HR strategy. Develop a communication plan that uses multiple channels (such as company-wide meetings, internal newsletters, and the intranet) to share the HR strategy with your company’s workforce.

As you share the relevant strategies, make sure to explain the importance of each individual's contribution toward your new HR objectives and how those efforts align with the broader company goals.

It’s also good practice to invite feedback and questions from ‌employees to increase their sense of ownership and stimulate their willingness to participate in the collective effort.

7. Monitor, evaluate, and periodically adjust your HR strategy

Use your selected metrics to track the progress of your HR strategy against its objectives. Project management tools can help you stay on top of this effort.

Regularly review the strategy’s effectiveness by collecting feedback from employees and analyzing HR data. Ask yourself whether the company’s performance is benefitting from the goals and action steps laid out in the HR strategic plan.

Be prepared to make adjustments to the strategy based on feedback and changing business needs. Continuous improvement should be a core aspect of your HR strategy.

Here are some ways to make your HR strategy the best it can be.

1. Involve the right team members from the beginning

Include key stakeholders and team members from other departments from the start. Gather the insights you need to align the HR strategy with specific organizational needs.

Collaboration between HR, department heads, and executive leadership is crucial to tailoring your HR strategy to the broader business objectives. Establish a cross-functional team to contribute to the strategy development process so that you can be sure your HR strategy resonates across the organization.

2. Set clear, measurable goals and measure outcomes

Define clear, measurable goals for each part of your HR strategy. These goals should be directly linked to the company’s business outcomes to demonstrate the value and impact of your HR initiatives.

Specifically, use key performance indicators (KPIs) and metrics relevant to talent acquisition, employee retention rates, training effectiveness, employee engagement scores, and overall business performance.

3. Invest in technology and HR software

Use advanced HR software and technologies to simplify your HR processes. From payroll and benefits to compliance, a strong HR platform helps you manage your global team efficiently.

Remote HR Management is specifically designed for companies with remote team members around the globe. Invest in a good HR solution to track your HR metrics, refine your recruitment strategies, and personalize your employee development programs.

4. Be flexible and adaptable

Be flexible in your HR strategy as technologies and your workforce dynamics change. It’s important to stay informed about trends and challenges in your field and be ready to pivot as needed. This sort of agility will help your HR strategy remain relevant and effective over time.

5. Prioritize employee engagement and well-being

Engaged employees are more productive, innovative, and loyal by nature, so make sure to include initiatives for boosting employee engagement and well-being in your plan.

Implement programs that support a healthy work-life balance and diversity. Recognize employee achievements and address mental health and well-being. Prioritizing employee engagement can have a strong positive impact on your HR strategy.

Technological advancements, evolving or new work models, and globalization all affect HR strategies. Here's how HR strategies are likely to change over the next five years.

1. Integration of more AI and machine learning

Artificial intelligence and machine learning will increasingly automate routine HR tasks. HR professionals will continue to focus on more strategic aspects, like talent development and employee engagement.

Predictive analytics will play a key role in identifying future talent needs, flagging potential leadership gaps, and even forecasting turnover rates. These developments will necessitate more proactive HR planning, including high-level strategies to keep up with technology.

2. More remote and hybrid work models

22% of the US workforce is estimated to work remotely. As companies continue to expand and refine their remote work policies, HR strategies need to adapt to manage hybrid workforces. This includes developing remote-friendly policies and investing in effective, easy-to-use technologies that make collaboration and communication effortless and more productive .

Above all, HR experts need to develop engagement initiatives that bridge the physical distance between team members. In that way, everyone will feel like they’re part of the team, no matter their location.

3. Employee well-being as a strategic priority

Future HR strategies will focus more on holistic employee well-being as a strategic part of HR work. Companies will likely integrate more comprehensive well-being initiatives into their core HR strategies. This is because leaders ‌recognize the direct impact of mental health on employee productivity, engagement, and retention.

4. Increased globalization on HR departments

With teams becoming increasingly international, HR strategies will need to focus on developing inclusive cultures that embrace diversity . HR leaders also need to manage teams across different time zones and cultures.

This global perspective will require a more nuanced approach to everything from global payroll to customized benefits packages that match different employee needs.

These predictions underscore the need for HR strategies that are not only adaptable and technology-driven but also human-centric. You can’t build an effective HR strategy without recognizing the diverse dynamics of a global workforce. Given these future trends, HR professionals‌ should build an HR strategy that truly focuses on their employees.

As technology and globalization reshape how we work, HR strategy requires the right HR software to guarantee success. If you are crafting an HR strategy for your global team, consider partnering with an expert in global HR.

Remote’s all-in-one global HR solution is built to help you hire, pay, and manage top talent compliantly with local laws. Whether you want to hire one employee or contractor in another country, or hundreds in multiple countries, Remote HR Management supports all you need through a single platform.

To learn more about how Remote can help you actualize your HR strategies, chat with an expert today.

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Strategic Human Resource Management (2024 Guide)

Updated: Jun 8, 2024, 9:04am

Strategic Human Resource Management (2024 Guide)

What is strategic human resources, why strategic human resources is important, 5 steps to strategic human resources, bottom line, frequently asked questions (faqs).

Strategic human resource management (SHRM) is a process that organizations use to manage their employees. It is a way to ensure that the organization’s HR are used in a way that supports the organization’s goals. Think of it as a bridge connecting human resources and the goals of the company. With SHRM, businesses can more effectively manage employee performance and development, as well as create programs and policies that support the company’s overall strategy.

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The goal of SHRM is to create policies and programs that align with the company’s business strategy. The main difference between human resources and strategic human resources is that human resources focus on the day-to-day management of employees, while strategic human resources focus on how employees can achieve the company’s overall goals. This means that SHRM must first understand the company’s business goals and then create programs and policies that support those goals.

Some common examples of SHRM programs and policies include:

Performance management: Creating systems to track and improve employee performance
Training and development: Identifying employees’ development needs and providing training and resources to help them improve
Compensation and benefits: Designing compensation and benefits programs that attract and retain employees
Employee relations: Managing employee relations to create a positive work environment

These are just a few examples of the types of programs and policies that can be part of SHRM. The specific programs and policies will vary depending on the company’s goals and the needs of its employees.

SHRM is important because it helps businesses achieve their goals. By aligning HR programs and policies with the company’s business strategy, SHRM can help businesses improve employee performance, develop the workforce and create a positive work environment. SHRM can also help businesses save money by reducing turnover and improving productivity.

Improve employee performance: SHRM can help businesses improve employee performance by creating systems to track and improve performance.
Develop the workforce: SHRM can help businesses develop the workforce by identifying employees’ development needs and providing training and resources to help them improve.
Create a positive work environment: SHRM can help businesses create a positive work environment by managing employee relations.
Reduce turnover: SHRM can help businesses reduce turnover by designing compensation and benefits programs that attract and retain employees.
Improve productivity: SHRM can help businesses improve productivity by improving employee performance and creating a positive work environment.

Now that you know what SHRM is and why it’s important, you may wonder how to get started. The process involves knowing the goals of your company, its abilities, future needs and resources. From there, you put your plan into action, then reassess and pivot if necessary.

Here are the five steps to strategic human resources plan:

1. Know your company’s goals and abilities

The first step to SHRM is understanding your company’s goals and abilities. When you know your company goals and can articulate them, you’ll have an easier time creating programs and policies that support those goals. You’ll also be able to more effectively measure the success of your SHRM programs and make changes as needed.

Consider the following questions:

What are your company’s long-term goals?
What are your company’s strengths and weaknesses?
What resources does your company have now?
What skills does your workforce currently have?
Are there any gaps in talent or skills?

Answering these questions will help you understand your company’s goals and abilities, and how SHRM can help you achieve those goals.

2. Forecast future needs

Now that you have an idea of your company’s goals and abilities, you need to forecast future needs. In order to ensure your company’s future success, you need to predict how many employees with the required skills will be necessary and measure it against your company’s current workforce. This will help you determine what skills your company will need in the future and how to develop those skills in your workforce.

What skills will your company need in the future?
How many employees with those skills will you need?
How does that compare to your current workforce?

By answering these questions, you will be able to comprehend what abilities your company will need in the future and how to cultivate a workforce with those required skills.

3. Determine the resources needed to achieve company goals

After you know your company’s goals and have forecasted future needs, you need to determine the resources needed to achieve those goals. This includes identifying the financial resources, human resources and physical resources required.

What financial resources will you need to achieve your company’s goals?
What human resources will you need to achieve your company’s goals?
What physical resources will you need to achieve your company’s goals?

To determine these, you’ve got to conduct an audit of both your internal and external resources. This will give you a sense of what types of resources you have available to achieve your goals and where you may need to supplement.

For example, if you’re looking to expand your workforce, you may need to invest in recruiting programs. Or, after conducting a needs assessment, you may find that your current workforce doesn’t have the necessary skills to achieve your company’s goals, so you’ll need to invest in training programs.

Another example is if you’re looking to launch a new product. In this case, you’ll need to consider the financial resources required to develop and market the product, as well as the physical resources required to produce it. You’ve also got to consider talent and skill set when launching a new product. Do you have the right people in place to bring your product to market? And do they have the necessary skills to do so?

4. Execute your plan

Now that you’ve set your company’s goals, forecasted its future needs and gathered the resources required to achieve those goals, it’s time to put your SHRM plan into action. Most companies start by recruiting the right candidates, training and development and then performance management. However, this will vary depending on your company’s specific needs.

If you already have a large talent pool to choose from, you may be better off cultivating skills of current employees before recruiting outside talent. After you’ve satisfied that resource, you may find you still need to hire. If so, you’ll need to have clear expectations and skill requirements before recruiting.

Once you’ve hired talent, it’s imperative to have a proper onboarding process. This will help ensure that your new hires are set up for success and understand what’s expected of them. After you’ve brought new talent into the fold, you need to focus on development. This includes training programs as well as opportunities for professional growth. By offering these opportunities, you’ll be able to retain top talent and keep them engaged in their work.

Last but not least is performance management. This includes setting clear expectations, providing feedback and conducting performance reviews. Performance management is a key part of SHRM as it helps ensure that your workforce is meeting expectations and contributing to your company’s bottom line.

Here are a few things to keep in mind when executing your SHRM plan:

Set realistic goals and timelines. Trying to accomplish too much in a short period of time can be overwhelming and lead to mistakes.
Get buy-in from upper management. If those at the top aren’t on board with your SHRM plan, it’s going to be difficult to get everyone else on board.
Communicate with your employees. Employees should be aware of the goals of the SHRM plan and how it will affect them. This will help get them on board and ensure that they’re working towards the same goals.
Be prepared to adjust your plan. As with any plan, things may not go as expected. Be prepared to make adjustments to ensure that you’re still on track to achieve your company’s goals. We’ll discuss this in detail in the next section.

5. Assess and pivot

After you’ve executed your SHRM plan, it’s important to assess how things are going. This includes looking at what’s working and what’s not. Based on your assessment, you may need to make adjustments to your plan. For example, if you’re not seeing the results you want, you may need to change your recruiting strategy. Or, if you’re finding that your training programs aren’t effective, you may need to make changes to those as well.

It’s also important to keep in mind that your SHRM plan is not a one-time thing. As your company grows and changes, so too will your SHRM needs. As such, it’s important to revisit your SHRM plan on a regular basis to ensure that it’s still relevant and effective.

Strategic human resource management is a process that helps companies achieve their goals by better managing their workforce. By taking the time to develop a SHRM plan, companies can ensure that they have the right people in place to achieve their goals. While developing a SHRM plan can be time-consuming, the benefits outweigh the costs. Not only will a well-executed SHRM plan help you achieve your company’s goals, but it will also help you retain top talent and keep your employees engaged in their work.

What is strategic human resource management (SHRM)?

Strategic human resource management is a process that helps companies manage their workforce in a way that aligns with their company’s goals.

Why is SHRM important?

SHRM is important because it helps companies ensure that they have the right people in place to achieve their company’s goals. Additionally, SHRM can help companies retain top talent and keep their employees engaged in their work.

What's the difference between human resources and strategic human resource management?

The difference between human resources and strategic human resource management is that human resources focuses on the day-to-day management of employees while SHRM takes a more strategic approach.