In what types of organizations might traditional HR still be appropriate

Traditional human resources management reacts to employees; when workers make requests or cause problems, HR steps in and takes care of it. Strategic HR involves planning. A strategic HR department looks ahead and heads off problems. These HR pros also look at the company's needs for the future and develop strategies to meet them.

Traditional HR departments focus on managing labor relations, solving employees' problems and generally keeping the staff happy. Strategic HR has plans for helping the organization - recruiting more workers, developing talent and training employees in company standards and principles.

Traditional HR has a narrow focus on issues like basic personnel management and labor relations. Their goal is to take care of employees and keep them happy and satisfied. The HR team doesn't educate workers about responsibilities or how things are done. That's something they assume employees will pick up on the job or from their managers.

Strategic HR departments have a much broader mission:

• Employee recruitment
  
• Training and developing employees
  
• Drafting an employee handbook that tells them what's allowed, what's expected, and the disciplinary process for when employees fall short
  
• Finding ways to steer employees so the company can meet its productivity and profit goals 
  

Traditional HR focuses on current employees. Strategic HR thinks about what a company will need in the future. How many more staff will they need to hire? What skills or education will they need them to have? Then HR draws up a strategic plan to meet the future needs.

Strategic HR's mission doesn't end there. The department works actively to recruit individuals who can provide the skills the company needs, and then recommends which of them would make the best hire. Strategic HR also works to develop and promote talent among the existing workforce.

It's tempting to ignore potential problems until they happen, but it's a mistake, particularly with people. Traditional HR steps in when employees have discipline problems or stir up trouble. It does nothing to prevent the problems from developing.

Strategic HR is proactive rather than reactive. If a company wants a zero-tolerance policy on sexual harassment or discrimination, traditional HR would make that known when an employee crossed the line. Strategic HR lets employees know from the start what behavior is unacceptable; the employee handbook and training seminars fill staff in on how to behave, or not behave. In the long run, that can save the company money on lawsuits and complaints.

Traditional HR sees itself doing the same thing, year in and year out, with the same tools. Only the faces of the employees change.

Strategic HR tries to stay on top of the game. They keep track of new ideas in the field and new technology that can make it easier to manage employees. They also watch the industry for innovative methods that the competition might use to motivate employees better.

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.

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.

This article is originally published on Jun 24, 2021, and updated on Aug 10, 2022.