Module 3

The Processes of Strategic Human Resource Management

Strategic Human Resource Management is concerned with the development of HR strategies intended to direct the
employees’ efforts towards the business goals.

Strategic Human Resource Management Process

1. Scanning the Environment:

1. The process begins with the scanning of the environment, both the external and internal factors of the
organization. The external environment encompasses the political, legal, technological, economic, social
and cultural forces that have a great impact on the functioning of the business. The internal factors include
the organizational culture, hierarchy, business processes, SWOT analysis, industrial relations, etc. that play
a crucial role in performing the business operations.

The role of the HR department is to collect all the information about the immediate competitors – their strategies,
vision, mission, strengths, and weaknesses. This can be done through the resumes being sent by the candidates
working with the other rivalry firm. Through these, HR professionals can identify the workforce, work culture, skills of
the staff, compensation levels, reasons for exit and other relevant information about the competing firm.

2. Identify Sources of Competitive Advantage:  is to identify the parameters of competitive advantage that
could stem from diverse sources as product quality, price, customer service, brand positioning, delivery, etc.

The HR department can help in gaining the competitive advantage by conducting the efficient training programmes
designed to enrich the skills of the staff.
 3. Identify HRM Strategies: There are major four strategies undertaken by an organization to enrich the
employees capabilities:

a) Learning as Socialization: This strategy includes the techniques as training courses, coaching sessions, education
programmes to ensure that the employees abide by the rules, value and beliefs of an organization and are able to
meet the performance targets.

b) Devolved Informal Learning: This strategy helps in making the employees aware of the learning opportunities and
the career development.

1. Engineering: This strategy focuses on creating and developing communities of practice and social networks
within and outside the organization.

 Empowered Informal Learning: Through this strategy, the HR department focuses on developing the learning
environment such as knowledge about the new processes, designing of new work areas and the provision of shared
spaces.

4. Implementing HR Strategies: Once the strategy has been decided the next step is to put it into the action. The
HR strategy can be implemented by considering the HR policies, plans, actions and practices..

5. Monitor and Evaluation: The final step in the strategic human resource management process is to compare
the performance of the HR strategy against the pre-established standards.

This stage, certain activities are performed to evaluate the outcomes of the strategic decision: establishing the
performance targets and tolerance levels, analyzing the deviations, executing the modifications. To have an effective
HR strategy the firm follow these steps systematically and ensures that the purpose for which it is designed is
fulfilled.

Work force Utilization

A method of utilizing available workforce of a company for the purpose of maximizing the employee
efficiency. It is the company’s vision regarding the best possible use of available human resources for accomplishing
strategic goals and addressing tactical decisions.

The idea behind employee utilization is to prevent wasteful and inappropriate use of available HR through
reaching optimization in the working environment. Successful realization of this idea entails a continuous increase in
a company’s revenues in the long run. 

Employee utilization is an attempt to make current use of workforce more efficient through the following activities:

 Training and education (improving skills and knowledge of workers)

  Time management (better planning and allocation of time among employee tasks)

 Delegation (more optimized assignment of tasks)

 Increased pay rates (workers earn more for the same period of time)

 Recognition and rewarding (employees recognize their importance to the company and are rewarded for
work success)

 Motivation and leadership (employees are well motivated and led).

Is employee utilization the answer to achieving business success? If yes, how do you even utilize employees
effectively?

Employee utilization is driven by business metrics for a particular role or department. So, focus on setting
the right performance metrics. Plus, it’s helpful to know what it does to the overall profitability and productivity of the
business.

Why most organizations do not fully utilize their employees  

Depending on the size of an organization and the industry it operates in, it’s safe to say that service-based industries
find it difficult to fully utilize their employees at work. 

From a services point of view, an organization needs to take care of different elements:    

Project in hand 

This refers to the number of projects at hand at a time. An organization having lots of projects will have to
divide the role of employees based on that and may require some people to work on multiple projects. 

Resource allocation and utilization 

To allocate resources, one needs client-wise and project-wise insights. If there is a clear picture of how
many people are involved and what resources they’ll need, it’s easier to allocate resources. It even helps in planning
for future projects. Once resources are allocated, they also need to be utilized and tracked. Tracking actual billable,
non-billable hours, and how many resources were spent on productive work helps in making the project a
success. Depending upon which areas need more resources, allocation strategy can be changed accordingly. Also,
resources are allocated depending upon the capabilities of the workforce.  

Skills required   

Each project comes with a set of deliverables. Sometimes, a skilled workforce needs to perform special
tasks. If your workforce doesn’t have the skill, you’ll be in trouble and might lose the project.   
Billing hours   

Tracking the billing hours helps to measure the utilization rate of your professional staff to allocate resources
effectively. 

Distribution   

Distribution is an integral step for the success of any project. It refers to both manpower and other
resources. If the distribution isn’t good, nothing works.  Most organizations ignore employee utilization and only focus
on churning out projects after projects. However, things don’t always go as planned. Hurdles are plenty.  

For companies, a lot of employees don’t regularly update their skills. Mapping people to projects and
expecting them to learn on the job won’t work when you need deliverables in quick tie on specialized services.   

 Apart from the professional services industry, this problem is common in the manufacturing industry as well.
The new project can have totally different requirements compared to the last one. With a high level of the temporary
or contractual workforce, the utilization rate goes lower. This directly affects the project completion rates and overall
business. An important aspect of leadership is man-management. Therefore, focus on how are you utilizing your
temporary workforce. Let’s learn more about that. 

What is employee utilization rate? 

Employee utilization calculates the amount of working time for an employee that can be used for billable
work (refer to time worked). Employee utilization rate is the percentage of total working hours that can be billed in
comparison to administrative tasks.  It is most often used in professional services and can be used as a key metric to
measure the productivity of employees. To calculate the rate, you need to measure the total number of hours they
work and how much of those hours were billable. It will vary from one job role to another. No employee will spend
100% of their time on billable work as every project requires administrative tasks and day-to-day activities like
sending emails, attending meetings, etc. 

Why track employee utilization 

Tracking employee utilization can impact employee engagement and productivity. It helps in making sound
hiring decisions and identifies whether employees are overworking or underutilized, thus affecting overall business.
Also, the employees that are spending more time on productive work can be rewarded fairly. It highlights the
strengths and weaknesses of employee performance. When there is a gap, close and work towards making
processes better.    

A part of increasing productivity and utilization rate is empowering and trusting your employees to share
ideas and knowledge to work together on different projects.  The other element is the tracking part, which we’ve been
talking about in the article. No one can sit for hours and manually record billable hours, invoices, resource allocation,
and all other activities on paper. The best part — No organization has to follow that practice anymore.

Five recruitment strategies to manage talent shortages

Top talent is holding the cards in today's job market. Hiring managers have struggled to attract candidates
with the right hard skills or experience, the consequences can be serious. Lack of appropriate specialist staff could
hamper efforts to increase productivity, turnover and profitability, preventing the company from reaching its full
potential.

Even with the right in-house HR support, in a talent short market, many companies are not always using the
right strategies to attract professionals who will help their business grow. They also suggest that established tactics -
offering higher salary packages, for instance - may no longer attract the best candidates. Talent shortages have
affected employee morale and have increasing difficulties in meeting deadlines and clients’ expectations as a result
of the talent shortage.

Five strategies to counter the effects of a candidate short market and ensure productivity levels remain stable.

1. Look for talent in-house

HR focus on getting more out of existing employees to counter-act the effects of talent shortages. HRD
have provided staff with opportunities for training or the chance to take on new responsibilities or implement flexible
working arrangements. To balance, this is a useful strategy for retaining staff and preventing the emergence of
further skills shortages. Most employees will appreciate development opportunities and this increases staff loyalty to
a company.

2. Adjust your hiring criteria

Even with talent shortages affecting their businesses, HRD rarely hire professionals who do not meet all key
job description criteria. Holding out for best-match candidates can mean that vacancies remain open for weeks or
even months. This means that existing employees are working harder to provide the necessary cover, possibly
damaging morale and increasing staff attrition rates. Adjusting the hiring criteria and hiring less qualified candidates
can often deliver a wealth of benefits, boosting the diversity of the workforce and introducing fresh perspectives to
problem solving. It also helps drive innovation as different skill sets and approaches are brought together under one
roof.

Recruiting from a mix of talent pools is also a good method for managing salary inflation. In many cases,
candidates looking for the chance to step up are more likely to prioritise a fresh challenge over a large pay rise.

3. Use of interim professionals

 Hires of interim or contract staff are often used to cover skills shortages caused by a lack of available
permanent candidates. With a pool of highly qualified professionals ready to start work or a project at short notice, we
have seen many companies turning to an interim solution in the Belgian market.

4. Reduce the time to hire

A swift hiring process gives insight into the attitude and values of a company, helping to secure candidate
buy-in from the very beginning. To achieve this, it’s vital that all decision makers have bought into a pre-defined
recruitment timetable. Greater accommodation of the candidate’s needs, such as flexibility around interview times,
will also help to sell the organization. With the economy picking up, companies that fail to reduce the time from
interview to offer are already losing out to more flexible competitors.

5. Transfers

Another means of dealing with talent shortages which is often overlooked, is to transfer employees either
(inter)nationally or from another part of the company. Not only does this provide easy access to a pool of candidates
with a good understanding of the company and its values and processes, it also creates multiple benefits for the
employees concerned.

In our recent candidate survey, a majority of professionals report that their main reasons for moving abroad
would be for better career opportunities and to gain international exposure. 27% of the surveyed companies use
international transfers to counter talent shortages. Consider how you can get the most from international networks -
in some cases, especially for hard to fill roles, the cost of visas and relocation will be less than that of failing to find
the right person for the job.

Selection Strategies for HR

Hiring the right employees is crucial for any business, but small businesses can afford an even narrower
margin of error when it comes to selection than larger corporations. The human resources department must choose
which selection strategies it will adopt to screen candidates and find the best person for each job. The human
resources director can choose from among standard selection strategies or combine elements of several to create
one that works best for her individual business.

1. Knowledge, Skills and Abilities

One of the more traditional selection methods is to make choices based on knowledge, skills and abilities --
or KSAs. This selection method begins with job analysis. The human resources department analyzes each job and
creates a job specification that lists all required knowledge, skills and abilities needed to perform the job. The human
resources department then determines the best way to assess each candidate to determine whether he possesses
those KSAs. The final step is to process all job applicants using those assessment tools.

2. Outsourcing

Outsourcing is a selection strategy that human resources departments might adopt for hiring executives, temporary
employees or for positions requiring a specialized skill set. The most common strategy is to hire search firms or
"headhunters" to recruit, conduct assessments, check references, perform initial interviews and screen the large
application pools. The final selection is still an internal responsibility that is performed based on the external firm's
recommendations.

3. Multistage Selection Strategies

A multistage selection strategy combines a number of assessment tools as part of the process. The human
resources department is responsible for validating each assessment tool and ensuring that it is legitimately related to
the requirements of the open position. Examples of different stages in a multistage selection strategy are personality
tests, skills tests, interviews and sample work performances. This strategy is paired with either a conjunctive or
compensatory strategy.

4. Conjunctive Selection Strategy

When the human resources department uses a conjunctive model, it administers multiple assessment tools
in a series of stages. If a person does poorly on an initial assessment, he is eliminated from the pool of applicants.
When using this strategy, assessment tools must be carefully ordered so that a candidate is not eliminated based on
a less important criteria than one that is assessed later in the process. The advantage to this strategy, however, is
that it is less costly than a compensatory strategy because later assessment tools are administered to fewer people.

5. Compensatory Selection Strategy

One way of avoiding the disadvantage of the conjunctive selection strategy is to use a compensatory
selection strategy. This method administers all assessment tools to applicants at the same time -- or at least all of
them are administered before a candidate is eliminated or selected. The scores of all assessment tools are combined
to give each applicant a composite score. Under this system, an applicant is less likely to be eliminated based on the
results of a single assessment tool and comparisons can be made among the composite results of all applicants.

6. Alternative Selection Technique

The most common HR selection technique, according to the Society of Human Resource Management, is
the interview. Since unstructured interviews have usually no way to predict job performance, HR personnel can
employ alternative selection techniques for hiring and assessing potential candidates. The selection techniques you
use must ultimately match the knowledge, skills and abilities required of a candidate to perform a job. Most
alternative HR selection techniques involve consulting with or hiring a trained professional or psychologist to help
develop and administer tests and assessments.

7. Work Simulation

Work simulation or work sample tests allow you to observe the candidate performing a task that mirrors the
work he'll have to do once hired. Using this type of test assumes that the applicant already has the skills he is being
hired to perform. You can use this selection technique most appropriately when hiring for technical jobs. Factories,
for example, may use work simulation to test an applicant's abilities in operating machines, welding or reading
blueprints. For clerical positions, you can measure typing and proofreading skills. Airline pilots can be tested using
pilot simulation and rudder control tests.

8. Psychometrics

A variety of psychometric tests can be administered either in paper-and-pencil or computer format.

Personality tests asses traits associated with job performance, such as conscientiousness, agreeableness and
emotional stability. They can also measure work preferences and assess how a candidate may fare in a team
environment. Cognitive tests measure mental abilities like verbal and math skills, processing and reasoning abilities.
Both, according to research pointed to by the Society for Human Resource Management, can accurately predict job
performance and can be used to screen applicants for many types of jobs.

9. Situational Judgment

Situational judgment tests present scenarios to the job candidate similar to the ones he may encounter on
the actual job site. The candidate must select from multiple options the most or least effective response to handling
the scenario presented. These tests are usually administered in paper-and-pencil format or in videotaped form, with
responses entered on a computer. Developing a situational judgment test typically proves more complicated than
most other HR selection techniques since you must create both likely scenarios and response options.

10. Assessment Centers

The "assessment center" HR selection technique is often used to assess managerial and supervisory
competencies. Assessment centers are like work sample tests in that they present the candidate with exercises that
mirror situations they would encounter in the role or position for which he is being evaluated. Assessment centers
typically use a variety of activities, such as role-playing exercises, analytical exercises, group discussions and in-
basket activities where the applicant has a limited amount of time to complete given tasks. Assessment centers
typically last one day or more in length.
Group Activity

Study the strategies to counter the effects of a shortage of candidates for the critical position
vacant.
Prepare a strategic plan to counter the effects of candidate shortage to fill in the position to
ensure
that the vacant position productivity levels remain stable.

Submission of the Group Activity will be on or before March 5, 2022. All activity must be
compiled in one file and must be submitted to your Class Representative. Class Rep will be
tasked to submit to Dr. Mutuc here in our Group Chat.
Thank you and God bless us all