The Importance of Strategic HR

Human resources (HR) often gets seen as just the department that handles hiring and payroll. But strategic HR goes far beyond these tasks. It plays a vital role in shaping an organization’s future by aligning people management with business goals. Companies that treat HR as a strategic partner tend to perform better, adapt faster, and build stronger teams.

Strategic HR means planning and managing human capital in a way that supports long-term objectives. This approach transforms HR from a support function into a key driver of success.

Strategic HR planning board in a workspace

One of the main reasons strategic HR matters is its ability to connect people strategies with business priorities. When HR understands what the company aims to achieve, it can tailor recruitment, training, and employee development to fit those needs.

HR can tailor recruitment, training, and employee development better if they participate in the strategic planning process. Many executives make the assumption that they can develop a strategic plan and HR simply executes it. HR has evolved from simply performing functions into a strategic business partner. The HR department is no longer reactive but is proactive. If a strategic plan is going to be executed effectively the CHRO must be given a seat at the table.

If the CHRO isn't involved in the planning process, executing the strategic plan will be an uphill battle. Most executives don't know if their HR department has the capacity to execute the strategic plan they’re developing.  If the CHRO has a seat at the table the strategic plan will be developed in such a way that HR functions are designed into the plan.  This is where HR becomes a strategic business partner.

Strategic plans usually involve expanding, contracting, or restructuring a company. Expanding, contracting, or restructuring the human capital of a company involves the HR department. If the CHRO doesn't have a seat at the table, executing a strategic plan puts the HR department in the position of being reactive and not proactive.  The HR department is reactive because they have been focusing on achieving the company's previous strategic plan.

Many HR professionals don't want to discuss the fact that HR is not nimble. There is a plethora of variables that prevent HR from being nimble. Let's talk about the hiring/recruiting processes. The first step is to advertise a position. The company determines how long the vacancy announcement will be open. Once the vacancy announcement is closed resumes have to be reviewed and interviews have to be conducted.

If there are no qualified resumes or no one passes the interview process HR has to advertise the position again. None of this is under HRs control. Once a candidate makes it through the interview process, they will have to undergo a background investigation or something similar. HR has no control over how long this process is. If the candidate doesn't pass the background investigation or similar process HR has to advertise the position again.  All of this takes time and money.

The CHRO knows the details of the hiring/recruiting process as well as other HR processes. Executives have to treat HR as a strategic business partner, and they do this by giving the CHRO a seat at the table.