Human resources plays a crucial role in the acquisition, development and retention of talent—the lifeblood of any organization.
Therefore, without a strategic approach to human resource management, an organization will be lucky to outcompete its rivals.
As part of a community of people obsessed with building enduring organizations, I wanted to explore some examples of strategic HR at its finest.
We’ll look at three top-performing companies and summarize how their strategic approach to human resource management has become one of their main competitive advantages.
But, first up…
What Is Strategic Human Resource Management (SHRM)?
Strategic human resource management is the integration of HR strategies with organizational goals. HR is invited into the board room, looking at business goals and objectives through a talent lens, advising business leaders on the feasibility of their plans, and implementing company-wide policies and initiatives that help the organization reach its goals through talent.
As such, strategic HR management covers everything from workforce planning, talent acquisition/recruitment, onboarding, learning and development, performance management, tools and technology, employee relations, employee retention, operating models, compensation management, culture, employee wellness and wellbeing, and even nomenclature.
In a world where the competition for talent is fierce, the need to make the right strategic choices around talent is high. This is why HR professionals now play such a crucial role as the voice of talent and shepherds of the employee experience.
4 Strategic Human Resource Examples From Top Companies
Today, too few companies are truly dedicated to improving their HR practices for better business performance. As we've touched upon, it requires letting HR out of its silo and closely integrating with business strategy.
Here are four top companies that demonstrate exemplary strategic human resource management.
Google being Google, it's no surprise that their approach to HR broke away from tradition.
We all know about the tons of employee perks and amazing "Googlified" facilities that set a new trend in office design.
But Google's strategic approach to human resources goes beyond that. Like with most tech companies they're obsessed with data, and the HR function is no exception.
In 2006, co-founders Sergey Brin and Larry Page decided to take an empirical approach to HR founded on feedback and employee data. A manifestation of this is Project Oxygen, an ongoing study into management practices that identifies and measures key management behaviors and helps nurture them.
It all gets quite technical, but essentially Google hired some smart people to undertake in-depth statistical analysis into what their employees consider to be good managers. They discovered eight common behaviors exhibited by the top-performing managers and then trained the rest in them.
As a result, Google saw an overall improvement in people management and team metrics such as turnover, satisfaction, and performance over time.
So there you go, collecting data from your employees and using it to improve the employee experience does work. It's no accident that Google employees are some of the most productive in the world.
True to their industry, CISCO developed their own HRM technology to guide strategy and better serve the needs of the business.
The CISCO Talent Cloud is essentially an internal CRM that gives managers transparency into the skills and experiences of the company’s 70,000+ employees. Further, it gives employees themselves the tools and insights they need to take the initiative and advance their careers (sounds like an internal LinkedIn!).
This approach allows managers to put together the best team needed to complete a particular project, and employees the opportunity to learn by working on a project that helps them meet a particular goal.
Senior managers can also access real-time intelligence on team performance, how they produce results, execute priorities, and levels of engagement.
Cisco calls this a ‘one-size-fits-one’ employee experience and it seems to be working. CISCO is ranked number one in Fortune’s Best 100 Companies To Work For and is able to attract top talent to help meet business goals.
Hilton Worldwide Holdings
Anyone who's stayed at a Hilton Hotel will likely have enjoyed the experience. Of course, their standards are no fluke and require a large and diverse workforce to maintain.
Hilton is regularly recognized as one of the best global companies to work for (in fact sitting just behind Cisco in the rankings)—quite a feat for a service industry company.
The secret to Hilton's success, on both fronts, is in no small part down to a highly strategic approach to managing their organizational culture.
Culture is important because it represents how people work together in the day-to-day and on projects and it’s part of HR’s job to nurture that culture.
Knowing this, Hilton's approach was to introduce a method of quantitative analysis to maintaining its culture. One is 'the balanced scorecard' and the other is 'the team member survey'.
The balanced scorecard seeks to closely intertwine corporate vision, strategy, and goals with team member performance. It constantly tracks KPIs such as revenue maximization, customer loyalty, employee satisfaction, skills training, and diversity.
Employees and teams are able to see how their roles and performance impacts the company, and discoveries and best practices are regularly shared across the company (this is a highly simplified version, you can read more here).
The team member survey compliments the balanced scorecard. It's conducted globally once a year and measures factors such as morale, leadership effectiveness, pride, and development. You can easily gather the purpose and efficacy of this!
By carefully managing culture in such a way, Hilton employees at all levels are highly engaged and motivated to contribute to the company's mission. Something to ponder as you take five in one of the lobbies!
Number three on top places to work list, and the only financial institution in the top ten, is Amex.
So how have they done it?
Amex can boast achievements such as 100% pay parity, a generous benefits scheme, and concerted investments in diversity and inclusion.
But what we’ll focus on here is their slick approach to flexible working called the ‘Amex Flex work model.’
Even before the pandemic, the company had started investing in collaboration tools, hardware and security protocols to better enable remote working, so that ~20% of staff were already virtual.
This investment was accelerated by the pandemic but, after listening to employees (referred to as ‘colleagues’ internally) through surveys, Amex discovered that, while most liked the flexibility to work from home, many missed the in-person collaboration.
Taking onboard the feedback, Amex launched a hybrid model encouraging employees to ‘come into the office with a purpose’ i.e. make use of office time to collaborate and network.
Under the new model, Amex colleagues can “work form anywhere” for 30 days of the year, 80% can work remotely day-to-day, and 99% are eligible for hybrid work.
Recent feedback found that 90% of respondents were either very satisfied or satisfied with Amex Flex, and 87% felt supported in their career development.
The success of the new model is in no doubt predicated on the company continuously listening to its employees and using the feedback to shape strategy.
Indeed, the way the company calls employees colleagues, and the CHRO the ‘chief colleague experience officer’, is great example of HR being that go-between between talent and senior leadership.
Join the conversation
With competition for talent so high, Strategic HRM with HR working closely with senior leaders is crucial to creating a great employee experience.
There are always new and better ways of doing talent management—new tools, methodologies, operating models and ways of thinking.
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Some further reading to help you become a more strategic HR business partner:
- How To Elevate HR As A Strategic Partner Of The Business
- HR Leaders: Learn To Embrace Risk And Step Out Your Comfort Zone
- Why Strategic HR Leaders Should Rotate Through The Business
- Why CHROs Make Great CEOs And How They Can Make The Switch
- How To Attract And Retain Top Talent Through The Employee Life Cycle
- How To Perform A Talent Review In 5 Steps
- People Ops As A Product
- How To Run Agile HR Projects Like A World-Class Product Team
- HR Operating Models Of The Future: Evolving HR For The Modern Workplace
- Head Of People And The CEO: How To Form This Crucial Relationship
- How To Make A Greater Impact At Your Organization As An HR Leader
- Best Enterprise Resource Planning Software