If you ask anyone who works in HR or as a Human Resource Consultant, they should tell you that a successful HR strategy is one that brings together the right people, processes, systems and culture to form a strategic HR plan that achieves business objectives and your business strategy.
The businesses that succeed are those who embrace this at an early stage, and get buy-in from everyone, be it the leadership, management and the wider workforce.
What is HR strategy?
HR strategy refers to the business strategy adopted by an organisation which aims at integrating an organisations culture, its employees, systems and processes by coordinating the right set of actions to achieve the required goals. It’s important that this strategy is not just a set of HR practises or tactics, but instead a part of your business strategy – a strategic plan that works to make your organisational performance better in the long run.
In larger businesses this would be created and implemented by a HR department, but if you are a small business owner, and are looking to grow and scale your business to gain that competitive advantage in your field, then this is something you and your management team need to be thinking about now.
A successful HR and business strategy supports organisations in achieving business objectives by enhancing the ability of the employees to perform their roles successfully, developing policies that are conducive to your employee’s growth and also improving the team’s satisfaction through recognition and rewards.
As with any other business strategy, human resources needs some sort of plan of action for each employee in order to get where you need to go—namely, a business objective. And an employee can’t be part of that plan unless there are clear expectations set forth by you and your business. So the first question to ask yourself is, what does your business want to achieve?
A good HR strategy means that employees can work together more effectively toward those goals. A bad HR strategy is just as bad as having no HR strategy at all – and that certainly won’t help your business or management team reach their objectives.
Unfortunately, most people who run businesses tend to forget about their employees completely when talking about business objectives; without realising it, they’ve already created a bad HR strategy, a bad culture and a lack of employee engagement. On the other hand, a business with a clear goal in mind – and well thought out strategic plan on how to embrace and enhance the talents of its people in doing so – will have a competitive advantage over others.
A clear-cut and well-communicated approach to managing staff isn’t just something we’re advocating here: an effective HR strategy is necessary for achieving peak performance and profitability. The bottom line is that without understanding how we handle our own workforce and people —it’s difficult to achieve our goals.
Why Is It Important To Have An HR Strategy?
It is important for any organisation to focus on strategic planning, and especially in today’s competitive business world, to have a strong and proactive HR strategy. A good HR strategy not only ensures that employee retention rates are high and allows you to think ahead when it comes to things like workforce planning – but also helps an organisation meet its business goals with a very systematic approach to developing and improving its people.
Where bigger businesses have a HR team that implements their successful HR strategy, a smaller businesses usually has multiple people wearing multiple hats. But any HR strategy should take into account all factors related to the employees of a business. It’s crucial for a healthy culture of teamwork and productivity, particularly where teams are expected to deliver work at high velocity and collaborate seamlessly, which is becoming increasingly the norm.
Creating a strategic Human Resources plan that caters to both short-term and long-term goals can help ensure success for years to come and ultimately scale your business to work for you now, and in the future.
How Do You Develop Successful HR Strategies?
In order to develop an effective HR strategy, a company must first clarify their mission, vision and goals. HR strategies are useless without having that long term, strategic end goal in mind.
Once that is done, these three factors will dictate what types of employees and resources you need.
Next is matching your key staff with their positions by asking yourself a set of questions:
- What do you want from your employees?
- How will you create a competitive environment for them compared to others in your industry?
- What kind of person would thrive in your organisation?
- What kind of person wouldn’t thrive in your business?
This way, you can form solid bonds between your company’s culture and its workforce.
Allowing clear communication channels between management and each employee is important so everyone feels included in discussions about the end goal – and the impact this has on personal development plans, HR policies, and all other aspects of HR. If you want your staff to help you achieve your business mission – bring them along for the ride.
Having regular meetings where managers update employees on all issues (from resources and personal development to strategic decisions) allows them to voice their opinions as well as collaborate with each other more effectively.
And lastly, transparency leads to trust among employees; therefore it is essential for companies to be honest about everything that affects its people – from the things that affect them directly like pay, benefits, and work-life balance, to those that might affect them more indirectly like business strategy and even commercials.
What Are The Stages Involved In Developing An Effective HR Strategy?
There are so many factors that go into creating successful HR strategies. It’s extremely hard for business leaders to think of everything and build a successful strategy. It doesn’t mean just look up some HR practices and implement them in your business.
It means that business owners and directors can lose sight of the long term strategic objectives they are trying to achieve, and get lost in the short term wins; one day you end up boosting a salary to land that key new employee without thinking about what this is going to do to the morale and retention of others.
Not being a HR expert, these days, means that you might miss something that’s fundamental to a HR strategy – that thing that’s going to propel your business forward. Many lager businesses have a HR department or dedicated HR manager to help guide them – but that’s not possible for everyone.
Whether you are a founder, director or manager; if you are looking to develop an effective HR strategy, it’s important you bear in mind a few vital factors.
Focus on Strategic Workforce Planning & Talent Recruitment
Human Resources is all about starting with hiring the right talent so as to get desired business results and value from your recruitment investment. If you are looking to develop an effective HR strategy, then make sure you know the type of people who fit into your culture , and what their role will be in supporting growth.
Workforce planning is important for a couple of reasons:
It helps you plan ahead and be more strategic
Workforce planning is the most important part to making your business profitable. Without it, you’ll have too many people for too little work or, more commonly, be taking on too much work with not enough people to deliver. These strategies and the decisions you make could make or break your business.
A perfect example for this is in Digital Marketing Agencies.
Often work for marketing agencies comes in peaks and troughs. Many agency owners focus so much on the right now, and being reactive to that work when it comes in, that they have to hire in employees after they have secured work. They aren’t strategic, and everyone suffers.
But we all know that doesn’t help the business or your current employees.
The future of your business – quite literally – could depend on whether or not you start recruitment at the right time.
It helps you see skills gaps
Take a strategic look at your current workforce, and understand what each individual offers – and has the potential to offer – and align it against what you, your business and your management team want to achieve. I cannot express how important it is to make sure everyone is on the same page.
No matter everyone’s skills, as long as what they want to achieve is the same, it’s possible to teach people what they are missing.
A great example of how to do this is map what people in your teams want to achieve, and match that with what your business wants. Then, you can see what you are missing – and plan strategically to what skills you need to hire in across your delivery and management teams.
It allows better communication (If you hire the right people)
Improving communication should always be top of the list for any management team – and hiring the right people should help, not hinder that mission.
This is particularly important when hiring for management and leadership positions. You should bring people into the work environment that are going to implement their own departmental or team strategies to improve the future of work, and cascade down key information to create well defined, clear practices and expectations that support employees and the business’s goals.
New talent = New opportunities
New recruits bring new skills. Whether you are hiring apprentices or experienced management – be clear on what you want them to do and achieve – which means robust job descriptions and objectives. Whoever you hire should bring a new outlook, new ideas and a new way of thinking to your workforce. It’s important you embrace these ideas, and that’s part of the attractiveness of bringing in fresh blood, but make sure those new ideas fit with your mission.
Talent development (don’t forget the potential of existing employees)
New talent just doesn’t need to come in from outside – it can be developed from within.
This is why workforce planning is so important. You need to work out where you’re heading as a business and whether you can meet those objectives from developing the people you already have – or whether you need to bring new people in.
Of course, developing your own people has massive advantages. For your business, it’s less risky promoting people you already know and costs a lot less. For the team, that new role or promotion gives them something to strive for and a reason to want to stay.
Involve Internal Departments and Management
Wellbeing is a major Human Resource issue at present in helping employees lead better quality lives outside office hours. Whatever the issue, including other teams and management will play a major role in building an effective Human Resource strategy. Holding regular meetings with respective department heads means communications flows both ways.
The best business and those with a competitive advantage are transparent with their employees with every aspect of business day to day. From customer wins and financials, to long term goals, shareholders, investment and people coming into/leaving the business.
There is usually so much happening on a day to day basis, it can be hard to keep up with what is happening one day to the next. Using your management team to help communication around these issues is important. It helps to bring together teams and, the people within those teams, can support the wider workplace process and things like hiring, and even lead to better organisational success when all teams feel that what they are doing aligns.
Focus on culture
Human resources strategy is a highly effective way of developing an organisation’s structure and a way to support your business culture. When everyone in the business shares the same values and connects with its culture, everyone understands what needs to be done and how to do it.
You need to think about the type of culture that you want in your business.
Are you a corporate workplace?
Are you informal in your meetings and led more creatively?
Are you open and transparent or do you have tough conversations behind closed doors, and keep your staff in the dark?
Do you trust your employees to deliver work autonomously or do you micro manage?
How you act as a leadership and management team will determine how the rest of the business behaves.
However, implementing an effective Human Resource strategy can be a difficult task if you don’t know what you’re doing. Here are a few actionable tips for developing an effective HR strategy.
1. Identify your unique vision?
There are many different ways to define Human Resource strategy, but essentially it involves creating a vision for how employees can help you meet your goals. The first step in defining your Human Resource strategy is to figure out exactly how you want your team members involved in achieving those company goals.
In order to do that, first define what you mean by success – both for yourself and from an operational standpoint – then translate those definitions into precise statements about what you need from each one of your employees. By clarifying these needs, success becomes easy to measure which makes managing performance much easier later on down the road.
2. Make sure everyone is on board
Once you’ve clearly identified what your business requires from its employees, make sure every one of them knows their role and how they’ll benefit from helping reach your objectives.
To get people truly invested in contributing to HR strategy, get everyone working together towards common goals and practices instead of competing for top billing, sales or performance within departments or individual teams.
This gives workers something bigger than themselves to strive towards while simultaneously encouraging cooperation between departmental teams that might not otherwise work together very well. This offers more value to your business, and more value to each individual contributor.
3. Keep in mind your key role as a leader
Some roles in Human Resources allow you to lead by example without even having to say anything directly. You’ll build trust and a trust organisation if people see their leaders constantly taking responsibility for tasks no one else will handle, showing up and showing compassion for others, create strong relationships across departments and leading meetings effectively.
These are all things that contribute heavily to an excellent leader who happens to have expertise when it comes time for human resources work too, and who prioritises the development of people over everything else.
4. Communicate constantly and be strategic to align teams
Communicating all day long isn’t just important for being good at Human Resource leadership – it’s also necessary – simply because nobody likes being left in the dark.
Whether you’re a senior director, or a junior just starting out in the workplace, it is one of the most important things to communicate across departments, roles, leadership levels, and customers.
It makes sure everyone is on the same page, and makes sure everyone is working towards your bigger, long term business goals.
Ask any employee what their main gripe with leadership teams is, it always comes down to the lack of communication.
5. Have empathy for everybody’s concerns
With constant back-and-forth communication comes inevitable disagreements over workload distribution, who gets promoted next or any number of issues that crop up during normal operation at most workplaces.
You must stay impartial when deciding disputes between coworkers since they must put company interests ahead of personal feelings whenever possible.
6. Be prepared for difficult workplace conversations
One of the hardest things about Human Resource management and leadership is holding people to account for their actions – and achievement of their objectives. We’d be lying if we said that it’s easy – sometimes that’s really hard.
But it is important to make sure that you nip things in the bud quickly to solve issues internally, and on delivery of work, otherwise it could have a big impact later down the line.
7. Track employee performance
When you get right down to it, HR strategy exists for one main reason – to improve workforce productivity by removing obstacles between your employees and success.
And if you can’t measure success or progress toward meeting your business goals, how can you tell whether or not your strategies are really helping? That’s why gathering metrics is absolutely vital for measuring HR performance.
8. Follow up on follow-up
Another reason why measuring performance is vital for an effective HR strategy is because keeping tabs on how employees are executing their duties gives leaders crucial insight when it comes time for annual reviews. Many HR leaders use annual reviews as a springboard for identifying future key hires and promotions. Don’t wait a year before you give employees feedback; do it regularly – and do it objectively!
Steps To Creating A Strategic Framework For Organisational Change
The business world changes so quickly, and organisational change has big Human Resource implications too.
To change a business you need to change the people or what they do. They are big compliance here – which we’ll leave for another day – or blog. Suffice to say, organisational change requires its own kind of a Human Resource strategy—one that is all about getting an entire organisation on board with an important business decision or new business direction.
If you want to convince every person in your company that a particular course of action is best for them and your company as a whole, you’ll need a strategy that everyone can follow and understand. It needs to help people see how their own goals and duties fit into a much bigger picture.
Implementing Your HR Strategy
In order to align your business, culture, employees, processes and systems, it’s vital you develop your own HR strategy. Our HR Associates have years of experience in a variety of industry and service settings to help advise your business on strategic growth and scalability.
If you are looking for a HR consultant to help you to create and implement a HR strategy, then please get in touch for a free consultation.[/vc_column_text][/vc_column][/vc_row]