Decades ago, personnel departments usually were tasked with reading job seekers' paper applications to ensure they were completed properly, signing up employees for insurance and processing and distributing paychecks. Personnel department managers may have been privy to the leadership's discussions about the company's workforce needs, but traditional human resources management was more focused on operations than the long-range, strategic view. Strategic HRM focuses more on the role of HR as an integral component of the organization.
In the traditional framework, HR mainly is transactional and reactive. HR staff place job ads based on departmental requests for additional workers, respond to employee questions about benefits and payroll, and process terminations and resignations for employees leaving the company. In this reactive role, HR department actions may be fragmented and even rushed in some cases.
Strategic HRM, on the other hand, is proactive because the leaders usually are engaged partners in formulating the long-range, strategic direction of the company. In this role, HRM focuses on activities like assessing the availability of workers based on projections for business growth or the labor market availability. This shift from the transactional recruitment and selection process to a broad talent acquisition model considers the long-term organizational goals concerning workforce planning.
HR department staff may be highly specialized in the traditional framework. For example, the payroll clerk responds to questions about paychecks and payroll deductions and the benefits representative responds to inquiries about health insurance and sick leave balances. The HR recruiter is responsible for placing job advertisements and ensuring that applications are complete before she forwards them to a hiring manager.
The strategic HRM framework enables cross-functionality in which HR specialists are aware of the impact they have in every area of the HR department. For example, the strategically minded recruiter and compensation specialists may participate in discussions about the future of wages and salary increases in the industry, instead of just collecting and sorting job applications.
The goals of traditional HRM and strategic HRM are vastly different. While the primary function of traditional HRM is workforce development, its goals include ensuring there are enough employees to sustain the company operations. Traditional HRM further ensures accuracy and order concerning records, processes and procedures. Strategic HRM, by contrast, encompasses the broader aspects of the organization and its purpose. In addition to having a more significant role in determining the strategic direction of the company as well as employee development, strategic HRM business objectives align with the organization's goals.