Strategic Human Resource Management

¶ … Management The concept of strategic human resource management is rooted in the idea that human resources makes a critical contribution to the ability of the company to achieve its strategic objectives. Getting the right people is a combination of recruitment, selection, training and promotion. One of the issues that comes up in the recruitment and promotion area is the balance between internal and external candidates. There are merits to both approaches. An article in HR Magazine, published by the Society for Human Resource Management, discusses this issue (Krell, 2015).

The article makes the point that the debate between internal and external hiring is obsolete in the 21st century. Strategic human resources management, the author proposes, demands that companies do both. The more important decision is knowing when, how and for what a company should hire internally or externally. The article then covers some of the pros and cons of each technique.

Internal hires are more familiar with the company culture and systems, so they only need to worry about acclimating to the job; external hires may have more talent with respect to the specific position, especially if they are making a lateral move. Typically, the author notes, it is faster and less expensive to promote from within, but there are advantages to external hiring including fresh ideas and new skill sets (Krell, 2015). This relates closely to the concepts studied in class.

In order to understanding the hiring needs, there needs to be human resources planning. The organization needs to set out not only strategy, but then operationalize that strategy so that there are specific targets that can help HR to project needs. HR can then determine what sort of talent is required going forward. It will be able to first determine the degree to which that talent is available internally, but also to know what skills will need to be required externally.

In this way, demand forecasts can be set in line with expected needs and with existing capabilities. The HR department can then strike the right balance of internal and external talent. Internal recruiting is often used for positions when the company needs somebody to move in right away. That person can be trained ahead of an actual promotion, too, if the human resources department includes that person in a pool of individuals who have the potential to fill future needs.

Further, the company likely already has an internal hiring strategy in place, which is one of the reasons it is cheaper and faster. Further, while internal hires will often require some training, they are at least familiar with many aspects of the company that will not necessarily be familiar to an outsider. Where an externa hire is beneficial is when the HR department has determined that the company does not have a lot of talent internally for the position.

Moreover, the company may wish to inject fresh ideas, or take on someone who is making a lateral move between companies -- they have the requisite skills to do the job already and will require no training, just acculturation. This is how the internal/external debate fits within the overall concept of strategic human resources management. The author highlights the argument that because of the respective advantages and disadvantages of internal and external hiring, most companies will benefit from both.

Even companies whose workforces are not growing will benefit from bringing in fresh ideas from the outside. But the mix that the company wants to have will determine in part the resources that the company must dedicate to the recruiting task. Often, external hires take longer to excel at the new company, on account of their lack of institutional knowledge, this despite the fact that they typically take more money to bring into the role than a comparable internal hire would have (Krell, 2015).

The author's case for external hiring as being important to all companies is under certain conditions, for example when a strategic turnaround is occurring, or when the relevant skills are not found within the organization. Overall, the case presented for external hiring is actually kind of weak, and even though the initial premise is that external hiring is something that all firms do, the evidence is that it is recommended only under certain conditions.

For most companies, the cost-benefit analysis will show that internal hiring is better, at least this is what the article suggests. The human resources department has better data with which to work and thus determine the employee's fit, and needs to invest a lot less in terms of training and onboarding to hire internally. Still, where there is a strategic fit with external hiring, then external hiring should be done.

The entire concept of Chapter 12 is to understand the basics of strategic human resource management, in particular what human resources departments contribute to the organization. The role of this department is defined. Recruitment and retention are.