Over the last several months, many people have asked me to describe how human resources can become strategic and help a company be successful. I always start my answer by stating that to fully understand strategic HR, you need to know the definition of tactical HR. Tactical HR supplies companies with the basic administrative practices that allow a company to operate efficiently, such as policies, recruiting, compensation, benefits, compliance and discipline.
Strategic HR takes it to the next level by guiding companies on how to engage its workforce to drive results and build its high-performance culture. It also creates a compelling employment brand that helps to attract top talent. Put another way, Strategic HR focuses the company’s talent on winning in the marketplace! For HR to truly be strategic, a company’s attraction, selection, development, performance and rewards strategies and practices need to be aligned with the company’s business strategy and objectives. Strategic HR practices also need to translate the business strategy into action, engage employees at all levels to drive results and be transparent so everyone uses them every day to run the business. Strategic HR practices can result in a competitive advantage for the company in the marketplace, profitable revenue, innovation and strategic alignment.
The following are the essential human resources strategies needed to achieve the business objectives of any high-growth company in today’s volatile economic environment.
- An attraction and selection strategy that delivers the right talent at the right time and acts as a starting place for effective employee engagement
- A development strategy and system that grows the technical, core and leadership competencies that accelerate the company’s performance
- An integrated performance and rewards strategy that engages and motivates employees to deliver results and offers employees what they need to excel in their work
The following charts detail the differences between tactical and strategic human resources by function. As you will see, tactical HR is administrative and fundamental to running a company and strategic HR is action orientated and creates a competitive advantage in the marketplace through people.
As you can tell from the above comparison of tactical and strategic HR, a whole new mindset for executives needs to be established and new capabilities for HR professionals need to be developed. If you are truly doing strategic HR, then the only true measure of HR’s success is positive improvement in business results!
I look forward to your feedback and comments on Strategic HR and how it is essential to the long-term success of your company…
Human Capital – Love it, do it, prove it!
On strategic employee development, there seems to be a conflict between providing career paths for current employees, and enhancing an organization’s knowledge base by bringing in fresh talent from the outside. This balance must be managed, as leaning too heavily one way or the other can lead to an ineffective workforce. If you focus on the internal employee, you can create “false” impressions of a person’s worth, and, of course, if you look only to external candidates you can smother the work incentive of current employees trying to move up the ladder.
How have other executives handled this dilemma?
Very good read, thank you Tim.
A distinction + focus between tactical & strategic HR practices is key in delivering its success.
I think we all agree that they both go hand-by-hand; you need a solid base “tactical” to pursue into the next level “startegic” which in turn fuels your “tactical” elements and so forth.
Thanks again,
Haitham
Good points. But what about HR working as ‘strategic business partner’? is the same with other name or it means an even more strategic role, that needs a new set of competencies? Thanks,
Alejandro Delobelle
Alejandro,
I am really talking about a more strategic role. A strategic business partner has a seat at the table to help leaders through their people issues. What I am talking about is building the table! If HR can build strategic people practices to engage employees to drive business results and high-performance cultures, business leaders would jump for joy. Strategic HR is very proactive and can be a leader in aligning employees to the company’s business strategy.
Touche!, Build the table… And I would add that probably there’s no need to have a table at all…
thank you!
Alejandro Delobelle
Thanks for your such a nice difference between Tactical And Strategic HR roles. I would like to know about People Management in HR field, could you help me out because i am not an MBA person but having 1 yr experience in HR Recruitment…
Meera,
There is a great certification you can get from the Human Capital Insitute, which gives you in-depth knowledge regarding talent management in effective processes. Check it out.
Thanks for the feedback!
Build the table first.. hmm guess that answers my own question. (here is a copy of what I had posted on Linkedin the other day)
Where is HR’s chair in the board room?
Companies are more than happy, and basically often very dependant on having accountants, lawyers and Business Development Managers as part of their steering commitee and board members. But, too often the door is held shut for HR professionals.
Accountants represent finance, lawyers are the company’s watchdog over legal issues, BDMs often advise on business strategies etc.
But, what who is speaks on behalf of the company’s Human Capital? Thats HR’s arena.
I ask once again… Why are we not seeing more HR sitting at the table in Board meetings?
–here is where the table comes in….