Future directions
Cluster | Future directions |
---|---|
Organizational factors of success | Within the scope of the organizational factors of success, specifically, the factors influencing HRM, there is the need for more conclusive research on which factors have a greater influence on successful adoption processes. Specifically, researchers should concentrate on analyzing the impact of the innovation type |
Regarding employer branding innovative practices – monitoring the satisfaction with the employer's brand from the employee perspective. This needs to enable companies to identify what matters to their employees and target their investments | |
Strategic HRM | Identifying the changes in the functions of HR managers in an era of disruptive technology and innovation HRM's role as a strategic partner and the impact of the changes in functions on the results of organizations might be subject to study |
Understanding the future of work, specifically, the functions of HR professionals What skills do professionals need to develop in this new scenario? What activities will disappear, and which will be launched? | |
Studies may approach the specific features and set of abilities of HR managers (profile) necessary to bring about the adoption of disruptive technology in the organization. If HR department reorganization is essential in the future due to this disruptive technology, this also represents a topic for research Advancing with studies that seek to identify the impacts of adopting intelligent systems and practices deploying technologies and verifying whether there are advantages in turning the HR department into HR tech” | |
Human behavior | The theme of the leadership role versus innovation calls for studies focusing on the development of structures for corporate sustainability that are applicable beyond the range of senior management, therefore, interviewing persons at different management levels to involve more staff who had to change their routines due to the implementation of sustainability |
Learning management | Broaden the sample of studies across organizations of different sizes to examine the attitudes of employees toward the introduction of innovation in their working processes and consider the implications for training and development |
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Understand how strategic HRM works, and its relationship with business strategy, human capital management and performance
Strategic human resource management (strategic HRM) provides a framework linking people management and development practices to long-term business goals and outcomes. It focuses on longer-term resourcing issues and other HR strategies, such as reward or performance, determining how they are integrated into the overall business strategy.
This factsheet looks at how thinking on strategic HRM has developed and describes strategic HRM in relation to business strategy, human capital management and business performance.
Explore our viewpoint on productivity and people management in more detail, along with actions for government and recommendations for employers.
Strategic HRM, or ‘people strategy’, is about creating a coherent framework for employees to be hired, managed and developed to support an organisation’s long-term goals. It helps ensure that the various aspects of people management work together to drive the behaviour and climate to meet performance targets. It focuses on longer-term people issues, matching resources to future needs, and large-scale concerns about structure, quality, culture, values and commitment. It must also be a response to the evolving nature of work itself, which is explored in our Profession for the Future work.
There’s no single HRM strategy that will deliver success in all cases. Organisations must define their own unique strategy according to their specific context, culture and objectives. People professionals are instrumental in applying their expertise to understanding organisational circumstances and designing workforce pipelines that reflect stakeholder demands.
Strategic HRM: the key to improved business performance explains the various definitions and approaches to strategic HRM. They state that strategic HRM is a complex process that’s constantly evolving and a topic of ongoing debate.
The idea of strategic HRM started around the early 1990s, when academics developed definitions such as:
The undertaking of all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of business ( Schuler ).
The pattern of planned human resource deployments and activities intended to enable the organisation to achieve its goals ( Wright and McMahan ).
Boxall and Purcell describe strategic HRM as explaining how HRM influences organisational performance. They argue that strategy is not the same as strategic planning:
Strategic planning is a formal process, usually in larger organisations, defining how things will be done.
Strategy , by contrast, exists in all organisations (even if it’s not written down and articulated) and defines the organisation’s behaviour and how it attempts to cope with its environment.
Strategic HRM can include a number of individual HR strategies, for example:
These strategies are not ‘strategic HRM’ alone. Strategic HRM is the framework that determines the delivery of individual strategies, systematically linking people with organisations by integrating HRM strategies into organisational strategies to deliver organisational success.
A good business strategy is informed by its people. Most organisations today recognise that people are fundamental to sustainable value creation , which is why they are often referred to as an organisation's ‘most important asset’. Employees’ knowledge, skills and abilities are assets which the organisation should invest in and use to create sustainable value for the organisation and its various stakeholders.
Individual HR strategies may be shaped by the business strategy, but it’s too simplistic to suggest that strategic HRM simply follows on from business strategy – the two must inform one another. The way in which people are managed, motivated and deployed, and the availability of skills and knowledge, should all shape the business strategy. Indeed, it’s now increasingly common to find business strategies that are inextricably linked with, and incorporated into, strategic HRM, defining the management of all resources within the organisation.
Our Profession Map is based on key principles that govern how HR and other people professionals behave and deliver value through their work. The principles ‘Work matters, People matter, Professionalism matters’ describe clear pathways to strategic decision making to ensure value is created sustainably for the benefit of all stakeholders.
One important area of people strategy is workforce planning . Workforce planning involves putting business strategy into action. It must therefore be an iterative process - feeding information upwards on the capability and capacity of the workforce to deliver - and acting on forecast need for skills and capabilities to take the organisation forward. Workforce planning helps organisations meet their future skills needs and support their long-term business goals.
The term ‘human capital’ describes people’s potential to create value for their organisations. Heery and Noon’s A dictionary of human resource management defines human capital as “the knowledge, skills, and abilities that workers possess and which have been acquired through education, training, and experience both within and beyond the workplace”. Human capital management treats people as assets and focuses on adopting an integrated and strategic approach to managing people, which is the concern of all organisational stakeholders, not just people management professionals.
Human capital management can complement and strengthen strategic HRM by:
Strategic HRM can be seen as the framework for understanding and measuring the value of the workforce and how this converts into organisational value. Workforce reporting is useful in that it provides information about people’s current and potential capabilities to inform the strategy.
Since around the mid-1990s, the CIPD has been gathering evidence of the impact of people management practices on business performance. Research emphasises the importance of ‘fit’, i.e. the alignment of HR interventions and other organisational strategies, for maximum impact.
CIPD-sponsored work at Bath University, Understanding the people and performance link: unlocking the black box , emphasises the importance of individual HR strategies fitting together and operating within a strategic framework that incorporates both people and business issues.
This research has also found that individual HR practices alone do not drive better business performance. For example, highly skilled individuals with valuable talent can only generate value if they also have positive relationships with their managers in a supportive, value driven environment. All these factors will promote ‘discretionary behaviour’, for example an individual’s willingness to perform above the minimum standard or give extra effort. Therefore, strategic HRM should consider employee engagement , motivation and commitment, all of which support organisational performance.
The term people analytics is often used to describe the use of data about people to solve business problems. It is sometimes known as HR analytics or workforce analytics.
The quality of strategic HRM can be measured by key performance indicators that show the impact of strategic practices on both the HR function and the wider organisation. People analytics is crucial for understanding these outcomes, and especially for developing insights to drive strategic decision making. Without people analytics capability, the delivery of effective strategic HRM becomes difficult, and more likely to fail. So it’s important that HR functions are developing their strategic activity and build a firm foundation of people analytics practices.
To find out more on establishing effective people analytics practice, take a look at our practitioner guide .
Armstrong, M. (in press) Armstrong's handbook of strategic human resource management . 8th ed. London: Kogan Page.
Bassett-Jones, N. (2023) Strategic human resource management: a systems approach . London: Routledge.
Beaven, K. (2019) Strategic human resource management: an HR professional’s toolkit . London: Kogan Page.
Crawshaw, J., Budhwar, P and Davis, A. (eds.) (2023) Human resource management: strategic and international perspectives . 4th ed. London: Sage Publications.
Marchington, M., Wilkinson, A., Donelly, R. and Kynighou, A. (2020) Human resource management at work: the definitive guide . 7th ed. London: CIPD Kogan Page.
McGee, R. and Rennie, A. (2009) HR strategy . CIPD Toolkit. London: Chartered Institute of Personnel and Development.
Rees, G. and French, R. (2022) Strategic people management and development: theory and practice . 6th ed. London: CIPD Kogan Page.
Rees, G. and Smith, P. (eds.) (2021) Strategic human resource management: an international perspective . 3rd ed. London: Sage Publications.
Atkinson, C., Lupton, B., Kynighou, A. and Antcliff, V. (2022) Small firms, owner-managers and (strategic?) human resource management . Human Resource Management Journal. Vol 32, No 2, April. pp449-469.
Boxall, P. (2018) The development of strategic HRM: reflections on a 30-year journey. Labour & Industry . Vol 28, No 1, March. pp21-30.
Cascio, W.F. (2015) Strategic HRM: too important for an insular approach. Human Resource Management . Vol 54, No 3, May/June. pp423-426.
Collins, C.J. (2021) Expanding the resource based view model of strategic human resource management . International Journal of Human Resource Management. Vol 32, No 2, January. pp331-358.
Jiang, K. and Messersmith, J. (2018) On the shoulders of giants: a meta-review of strategic human resource management. International Journal of Human Resource Management . Vol 29, No 1, January. pp6-33.
Reilly, P. (2012) The practice of strategy. Strategic HR Review . Vol 11, No 3, pp129-135.
Ren, S., Cooke, F.L., Stahl, G.K., Fan, D. and Timming, A.R. (2023) Advancing the sustainability agenda through strategic human resource management: insights and suggestions for future research. Human Resource Management . Vol 62, No 3, May/June, pp251-265.
Sunghoon, K., Vaiman, V. and Sanders, K. (2022) Strategic human resource management in the era of environmental disruptions. Human Resource Management . Vol 61, No 3, May/June, pp283-293.
International Organization for Standardization (ISO30414) - Human capital reporting
CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.
Members and People Management subscribers can see articles on the People Management website.
This factsheet was last updated by Rebecca Peters: Research Adviser, CIPD
Rebecca leads on several research projects including the People Profession Survey which provides a snapshot of the current HR landscape on an international scale. Rebecca regularly presents her research at conferences and business events and is passionate about bridging the gap between research and practice.
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Overview Background Benefits of HR Strategic Planning Developing a Strategic HR Plan
Envision the future, develop strategic hr objectives, monitor and evaluate, additional resources.
This article provides a definition, background, information, resources and suggested reading on how to begin the process of strategic human resources. Topics include the following:
Strategic human resource management involves a future-oriented process of developing and implementing HR programs that address and solve business problems and directly contribute to major long-term business objectives.
HR management was once largely an administrative function focused on day-to-day responsibilities such as employee recruiting and selection and managing employee benefits. Changing labor market conditions and new business thinking call for HR business strategies that include recruiting and retaining the right people, as well as providing ethical and cultural leadership.
Strategic planning presents great challenges and opportunities for HR professionals. Nearly all HR leaders in the largest global companies are involved in strategic decision-making and participate on the organization's strategy team, and a majority of HR professionals report that strategic planning is part of their function. In contrast, HR professionals in many medium and small organizations are not often involved in organizational or functional strategic planning. Consequently, to achieve long-term strategic HR objectives and to be a key player in the organization's strategic planning process, some HR departments may need to convince senior management of the value and contribution HR can provide.
The closer the alignment between HR and an organization's overall business strategy, the better the company's ability to anticipate and respond to customer needs and to maintain competitive advantage. Rigorous research, planning and development involving workforce culture, behaviors and competencies promote the successful execution of business strategy.
Particular benefits of HR strategic planning include the following:
HR's role includes developing a plan of HR initiatives to achieve and promote the behaviors, culture and competencies needed to achieve organizational goals.
Results-oriented goals broadly include the following:
The strategic planning process begins with four critical questions:
See HR as Strategic Planning Facilitator .
The following sections examine each step in greater detail.
Being a strategic business partner means carrying out HR activities with the long-range goals of the organization in mind. To do this, HR professionals must do the following:
What are the basics of environmental scanning as part of the strategic planning process?
What is SWOT analysis, and how does it apply to an HR department?
Aligning the HR function to the organization's business strategy
For HR departments, intradepartmental strategic planning can be a good way to start the functional alignment process. However, regardless of whether strategic planning begins in the HR department or in another department, or is managed on an organization wide scale, the actions of the HR department will be integral to the success of the strategic plan. Thus, HR professionals must take care to align the HR function with every aspect of the strategic plan, even if the strategic plan does not explicitly address HR issues. Recent SHRM research reveals that HR professionals foresee significant workplace challenges, including rising health care costs, the retirement of large numbers of Baby Boomers and the increased demand for work/life balance. Retention programs, work/life programs, succession planning, and health, safety and security programs are among the HR efforts that are viewed as key workplace challenges through which HR can strategically contribute to organizations. See Aligning Workforce Strategies with Business Objectives.
The HR alignment process is often driven by workforce composition issues. Although every organization's particular strategic plan is unique, the demographics and other characteristics of the available workforce have a major effect on the way businesses are staffed. In turn, the way organizations are staffed has a significant impact on the execution of the organization's strategy.
HR professionals should monitor and respond accordingly to factors that may affect workforce composition, including the following:
Understanding of the current situation can be enhanced by conducting a SWOT analysis. This analysis includes an internal assessment of the organization's capabilities and limitations as well as an external environmental scan to review its customers, markets and competitors, and to forecast to external opportunities and threats.
What is a S.W.O.T. analysis, and how does it apply to an HR department?
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Major areas to consider during an external scan include economic, demographic, political, social and technological trends. An analysis of customers, markets and competitors is used to determine how the market is changing, to predict who the future customers will be and to analyze competitors in the marketplace. See Strategic Planning: What are the basics of environmental scanning? and Report: HR Lags in Using Data to Make Decisions .
When conducting a customer/market/competitor analysis, HR professionals should answer the following questions:
When the HR strategic planning team has fully evaluated the current situation, it should consider what the ideal future would look like from an organizational perspective.
The question "Where do we want to be?" can be answered and clearly articulated by creating statements of vision, mission and values. A vision statement provides a description of what an organization wants to become or hopes to accomplish in the future. An effective vision statement paints a mental picture of the organization's preferred future that is inspirational, aspirational, compelling and concise. See Human Resources Mission Statement Examples .
A values statement describes what the organization believes in and how it will behave. This statement can serve as the organization's moral compass and should be used to guide decision-making and assess actions taken. See Mission: What Is the Difference Between a Company's Mission, Vision and Values Statements?
Setting strategic objectives is an important part of the strategic planning process. Therefore, these objectives must be aligned with the organization's mission, vision and overall strategy. Strategic objectives will vary from organization to organization.
To identify whether strategic objectives have a solid foundation for success, HR should consider the following questions:
As an example, ABC Company may identify in its strategic planning analysis a need to improve the talent acquisition process. The strategic objective to address this issue is to design selection criteria to ensure best-fit hiring while reducing the time-to-fill positions.
Once a key initiative is identified, the organization should do the following:
Ultimately, a strategic objective is only as good as the overall strategic plan.
At this step of the strategic planning process, the focus is on specifying short-term answers to the question "How do we get there?" Specific, concrete short-term objectives that can be completed within six months to a year should be established to answer this question.
Although many organizations engage in strategic planning, very few of them believe they are highly successful at strategy execution. According to a survey by the American Management Association and the Human Resources Institute, only 3 percent of executives polled said their organizations were very successful at executing corporate strategy, whereas 62 percent stated their organizations were moderately successful. However, the companies that reported relatively high success in strategy execution were more likely to realize favorable revenue growth, market share, profitability and customer satisfaction.
Though every organization has its own strategy execution challenges, this study found that mastering the following areas is essential to successfully implementing strategic plans:
The single greatest barrier to executing strategy is the lack of adequate resources, the study found.
The final step should be establishing a mechanism to monitor and evaluate progress toward the achievement of strategic objectives. Most organizations conduct annual or quarterly strategic reviews for this purpose. These reviews do the following:
Some organizations may find that systems or tools such as balanced scorecards, benchmarking and dashboards are helpful for keeping focus and monitoring results.
How can the balanced scorecard be applied to human resources?
How do I determine which HR metrics to measure and report?
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Wilkinson, Michael (2011) The Executive Guide to Facilitating Strategy Atlanta, GA: Leadership Strategies Publishing.
Stroble, K. R., Kurtessis, J. N., Cohen, D. J., & Alexander, A. (2015). Defining HR Success: 9 critical competencies for HR professionals. Alexandria, VA: Society for Human Resource Management.
HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.
The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.
Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.
News, trends, analysis and breaking news alerts to help HR professionals do their jobs better each business day.
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HR research paper topics encompass a wide range of subjects related to managing human capital within an organization. These topics can be broadly categorized into areas such as recruitment, training and development, employee motivation, diversity and inclusion, labor relations, compensation and benefits, and more.
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