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Jan 4, 2011

Is HR Strategic?


(This article explores strategic HR from a local government context in Australia.  In reality we believe that it applies equally to most Australian industry and business sectors.)



Category: General
Posted by: Cambron

To answer this question we need to first define Strategic Human Resource Management (SHRM), which might likely cause debate in itself.  However, we should be on reasonably safe ground if we suggest that for HR, to be strategic, it must have a direct and obvious alignment to the Council Strategic Plan - this is the only way that future employee numbers, skills and structure can be anticipated.  Ideally Council will also have clearly articulated the desired organisational culture – this should be more than the value statements that grace the inside cover of an annual report.

So let’s try to define SHRM:

“SHRM is the alignment of human resources with Council strategic goals and the development (and maintenance) of an organizational culture that maximises Council performance over the long term”

Instead of focusing on immediate internal human resource issues, the focus is on addressing and solving problems that effect services and programs in the long run.  The primary goal of SHRM is to increase employee productivity by focusing on business threats and opportunities that occur both internally and externally.  The critical actions of a strategically focused human resource manager are to identify key HR initiatives that can be implemented over the long run to improve overall employee motivation and productivity.

Therefore SHRM will be proactive and not reactionary and it will focus on the future needs of Council including:

  • Reporting structures
  • Efficient resourcing
  • Knowledge development, maintenance and retention
  • Recruitment & targeted retention
  • Organisational communication (& alignment)
  • Reward and recognition
  • Culture
  • Change management

In general HR is more strategic today than in the past.  The emergence of popularly accepted management literature in the nineties, supported by the earlier emphasis on total quality management has no doubt influenced the development of a more strategic approach to managing employee resources.  The contributions of Deming (TQM), Kaplan & Norton (Balanced Scorecard) and Kotter (Change Management), amongst others, all implied a strong reliance on progressive HRM for success; their influence continues to this day.

In local government, over the last decade or so, there has also been a shift to a more strategic approach to people management, moving away from the base payroll/personnel model.  To illustrate, in Victoria there were numerous new HR Manager positions created during the Kennett Liberal Government reforms of the nineties.  Initially these positions were created to deal with IR issues but as the majority were external appointments there was an additional significant benefit through the injection of fresh thinking and new ideas.  It could also be argued that the progressive closing down of defined benefit superannuation schemes has opened up the local government labour market by removing the ‘golden handcuffs’.  In turn, this has increased the emphasis on improved recruitment practices and the introduction of other sector skills.  The trend towards using titles such as Organisational Development Manager, rather than HR Manager, confirms the broader expectations of HR.

Managing culture is at least as important as managing systems.

Examples of strategic HR

- HR has the umbrella role of ensuring organisational direction is consistently and constantly communicated.

- HR has its own plan that is regularly assessed by senior managers and that has a clear alignment to organisation strategy.  Amongst other things, the HR plan identifies future resource and skill needs (shortages and surpluses) and implements strategies to meet them.

- Managing culture is seen as at least as important as managing systems.  HR is proactive in working with management to define the desired culture and to continually endorse and embed that culture.  No motherhood statements, no surveys without outcomes, no 360s done without purpose or understanding – managers walk the talk.

- HR has a seat at the senior management team table and doesn’t need to rely on others with less experience and expertise to lead the HR debate.

- HR takes the time to understand the business of their own Council and the local government sector in general.

- HR appreciates that change is ongoing and is considered the expert in managing the change process.

- HR policies acknowledge and support organisational strategy.

If HR isn’t strategic then why not?

Simply put, if the foundations aren’t in place the house won’t get built.  If Council doesn’t have a credible long term plan, (not one that is only designed to demonstrate legislative compliance) clear goals and success measures, it’s just not possible to have useful supporting strategies.  If a Council isn’t reporting against their Council plan at least quarterly it’s not serious.

Similarly, if there is no clearly defined organisational culture it’s not reasonable to expect a consistent cultural message to be continuously delivered over the long term.  Of course, the Council will have a culture, but it will be unplanned and probably less than desired.

Assuming the above, senior HR still has to have the necessary authority and responsibility assigned to their role and, most importantly, the necessary skills and motivation to actually deliver.


by Gary Bourke of Cambron

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