Tactical vs. strategic HR: Why businesses need both

When you hear the words “human resources,” what are the first things that come to mind?

  1. Employee paperwork, payroll processing, employee handbooks; or
  2. Creating a strong company culture, salary structure analysis, succession planning

Answer A: These are your typical HR tasks – things that every business needs to do to keep its people employed and doors open. This is what we will refer to as tactical HR. While tactical HR is a must-do, your HR strategy shouldn’t stop there.

Answer B: Your people are probably your business’s most valuable asset. What they do can dramatically affect whether your business is successful. Therefore, implementing HR practices that align your people with your company goals can help you create a more productive and profitable business. This is what we will refer to as strategic HR.

Let’s take a deeper dive into tactical and strategic HR, and how both help businesses become even more successful.

Why tactical HR is so important

Just like people need food, water and oxygen to survive, businesses need tactical HR functions to continue running. These are the basic, foundational processes and systems that need to be in place for your business to produce its products and services.

Before you can grow or further develop your workforce and business, your core elements – or tactical HR – must be solidly in place. Some of those tasks may include:

  • Processing payroll and filing payroll taxes
  • Administering and managing employee benefits
  • Handling employee paperwork
  • Tracking and reporting employee work hours
  • Creating and maintaining an employee handbook
  • Recruiting, hiring and onboarding new employees
  • Monitoring and implementing government regulations

Think about it this way: What happens if you build a house on a shoddy foundation? Walls crack. Pipes leak. More problems arise. The same holds true for your HR.

If you’re miscalculating wages or not paying employees on time, you’ll never be able to retain your best employees. Instead, you’ll spend time (and not to mention money) on hiring and training their replacements.

Tactical HR tasks are the underlying functions a business needs to keep its doors open and its workforce employed. But is that all you want to do – just survive? Or do you want to thrive?

That’s where strategic HR comes in.

What makes strategic HR even more critical

Ask yourself these questions: Where do you see your business in five years? How do you plan to get there?

You’re going to need some help from your employees. But why will they help you? The answer to that lies in your strategic HR plan. The essence of strategic human resource management can be boiled down to developing a plan that helps ensure mutual benefit and a quality work experience between employee and employer.

It’s kind of like the old saying: “You scratch my back and I’ll scratch yours.”

When you create a company culture and work environment that your employees appreciate, they’ll care more about their jobs and be more invested in the success of your company. Despite what you may think, just offering your employees a bigger paycheck isn’t necessarily going to keep them around.

In fact, pay is only a part of an effective employee retention strategy. It’s also important to make sure your workforce feels challenged (but not overwhelmed) and understands how their role contributes to the company’s overall growth and vision.

To offer that, you’ll have to focus on strategic HR that includes future and value-focused tasks, such as:

  • Building a pipeline of high-quality job candidates
  • Managing training and certification pathways for employees
  • Improving employee productivity
  • Developing programs to retain talent
  • Planning for employee and leadership succession

The right mix of strategic and tactical HR for business success

When you combine tactical and strategic functions, you’ll create a workplace where your employees want to be. They’re no longer just there to collect a paycheck. They’re doing something that makes them feel good about themselves. They feel valued and can see how day-to-day projects contribute to the greater good of the company. It’s no longer just a job; it’s an experience that will help them grow and achieve their own goals, too.

And in return, you get a more productive workforce; a team that is willing to give it their all and has a vested interest in the success of your business. 

Kevin Howe

Insperity, a trusted advisor to America’s best businesses since 1986, provides an array of human resources and business solutions designed to help improve business performance. With 2018 revenues of $3.8 billion, Insperity operates in 78 offices throughout the United States. To learn how Insperity can help you, email [email protected] or call 813.556.2010.

Contributed by Kevin Howe from content originally published on Insperity.com.

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