There are several approaches to human resource management. How do you know which one is right for your organization? It depends on the needs of your business and employees and the short-term and long-term goals you want to achieve.
You can set the right course for your company’s future by first learning the differences between traditional vs strategic human resource management.
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What is traditional human resource management?
Traditional human resource management is primarily reactive. This means the HR department’s activities aren’t fully aligned with the business’s leadership goals. Instead, HR is more of a task-oriented, administrative department that fulfills employees’ needs only as they occur.
For example, in a traditional human resource management approach, HR will recruit and hire employees once a department manager informs them of an open position. Similarly, if employees have questions about a specific policy, then HR will provide the answers. However, HR probably won’t go so far as to create an employee handbook or host seminars on new policies that employees need to be aware of.
One of the issues with this approach is that, because it’s largely reactive, the HR team may sometimes rush processes, which can make them feel disjointed. There’s often little strategic planning involved in traditional human resource management, so the team isn’t always aware of what they could be doing before the company or an employee needs assistance.
What is strategic human resource management?
Unlike the reactive approach of traditional human resource management, strategic human resource management is highly proactive. With this approach, HR aligns with the business’s larger goals from an executive level.
The organization develops a cohesive HR strategy in conjunction with the objectives it wants to achieve. All human resource initiatives — from recruiting and hiring to onboarding and training — are designed to bring the organization closer to its targets.
For example, instead of waiting for a department manager to notify the HR team of an open position, HR will proactively recruit and hire employees based on the overall business strategy and in lockstep with department managers. The HR team can do this because it’s already aware of the company’s future needs and can set plans in motion to meet those needs.
Similarly, using the strategic approach, HR will preemptively assess employees’ needs for onboarding, training, performance evaluations, and compensation, and they’ll develop and implement programs to provide employees with the necessary information and resources.
What are the key differences between traditional and strategic human resource management?
The most obvious difference is the approach — one is reactive and the other proactive. This fundamental difference in approach trickles down to each element of HR.
In strategic human resource management, there’s a significant focus on goal setting and planning, so managing HR no longer means taking care of a disconnected set of tasks. Instead, it’s a carefully developed, long-term plan focused on helping the organization achieve its goals.
The use of data and analytics is another main difference between traditional and strategic human resource management. In traditional human resource management, there’s little reliance on key performance indicators or employee-related metrics. In other words, a team taking the traditional HR approach doesn’t make decisions based on data.
However, data-driven decisions are a core element in strategic human resource management. The HR team may review metrics for employee engagement, turnover, retention, customer satisfaction, and product quality and rely on them to make informed decisions about the company’s future.
Many organizations are replacing traditional HR with strategic human resource management because aligning HR closely with company objectives yields many benefits. If a business wants to grow its revenue, reach new customer segments, or increase market share, a strategic human resource management approach can help it achieve those goals more effectively than a traditional approach can.