Human Resource (HR) as a function becoming more and more dynamic and is getting refined by the day. It is becoming more and more strategic in nature and the key to achieving organizational goals.
Earlier, HR was limited to being just a manpower planning function. It acted as an input to the company’s annual budget and was largely a data-driven effort to manage the number of employees and their cost. No longer are business so simple. With their increasing complexity and diversity of business spread over multiple locations, Strategic Talent Planning (STP) has become a focus area for Strategic HR management (HRM). STP is a process by which HR determines and make sure that the organization is equipped with the Right Talent at the Right Time for the Right Job.
An HR strategy supports the business strategy, as do all the other functional strategies (especially R&D, Manufacturing, Marketing/Sales).
It just makes sense to have a plan for what the organization should look like in 3–5 years as you progress toward your business goals.
Strategic HR planning is an important component of strategic HRM. It links HRM directly to the strategic plan of your organization. Most mid- to large sized organizations have a strategic plan that guides the organization in successfully meeting its mission. Organizations routinely complete financial plans to ensure they achieve organizational goals and while workforce plans are not as common, they are just as important.
Even a small organization with as few as 10 staff can develop a strategic plan to guide decisions about the future. Based on the strategic plan, an organization can develop a strategic HR plan that will allow to make HR management decisions to support the future direction of the organization. Strategic HR planning is also important from a budgetary point of view so that you can factor the costs of recruitment, training, etc. into your organizational budget.
The strategic HR planning process:
- Assessing the current HR capacity
- Forecasting HR requirements
- Gap analysis
- Developing HR strategies to support organizational strategies
HR Strategies keep changing frequently and it is very important to stay updated about the same. You should always keep reviewing if your current HR Strategy is working out well for your organization or not.
HR Strategies that every organization should be aware of.
- Legal Requirements
- Employee Engagement
- Career Advancement Programs
- Corporate Images
- Performance Management System
If we are discussing Global HR strategy, it is quite important to choose the most appropriate methods of international hiring. Basically, there are options how to engage overseas talents:
- As an independent worker
- By opening own legal entity
- Using a local staffing agency
Each of the above mentioned methods has its own advantages and disadvantages in terms of the main criteria for engagements that you will face:
- Costs (setup, maintenance, ofﬁce rent, legal advice, hiring a director, accounting costs)
- Compliance (foreign country employment regulations
- Financial security (foreign currency exchange, mitigation of contractor/employee misclassiﬁcation risks and liabilities)
- Business & legal security (mitigation of risks linked with intellectual property loss, customer base loss
- Responsibility (international HR compliance, proﬁt repatriation tax, bank account, monthly payroll, money transfers, registration with in-country statutory bodies & onboarding, liquidation & termination, occupational safety responsibilities)
- Control & accountability
- Staff commitment & engagement (right to work for other companies, turnover, focus on company product/project)
- Headcount & geographical coverage (minimum employee number limits, limited number of countries)
- Communication & reporting (language, single point of contact, standardized reporting, uniﬁed procedures)
Method of engagement will determine your own challenges and appropriate strategy.
To support business goals and objectives through effective Talent Management. So by now, we should realize that everything to do with Talent(Acquiring, Developing, Managing, Retaining) is a core part of Strategic HRM.
The most enlightened organizations include human resources in the development of the strategic plan so that the human resources plan/strategy can link directly to the strategic Business plan or the overall business strategy.
The Human Resource strategy is a business’s overall plan for managing its human capital to align it with its business activities. The Human Resource strategy sets the direction for all the key areas of HR, including hiring, performance appraisal, development, and compensation.