What is an HR strategy?
An HR strategy is a plan or roadmap for solving an organisation's top challenges through their people. It lays out initiatives to leverage human capital to assist in efforts surrounding recruitment, onboarding, performance, corporate culture and other goals.
What is the purpose of an HR strategy?
The purpose of a strategic HR strategy is to align the skills and goals of your people with the goals and objectives of your business. The idea is to plan out a concrete set of measures, programmes and KPIs to reach those objectives.
There is also an incredibly important grounding element to an HR strategy. For many businesses, it sets into motion the importance of people and has a trickle-down effect on programmes like candidate experience, onboarding, performance reviews and more.
Is an HR strategy the same as a people strategy?
Yes and no. A people strategy is more of a "prioritised people plan" that sets out how your organisation seeks to develop employees in line with your goals. Your HR strategy is going to take a more holistic view and reflect business outcomes.
As an HR professional, you are going to want to have both an HR strategy and a people strategy in that order. The former will help prioritise what your team needs to accomplish, and the latter will unlock the power of your people to get there.
Why you need a human resource strategy
Successful teams require an HR strategy to help align their own goals with the goals of the business. This is important for two reasons:
It helps HR teams establish a seat at the table of executive discussions.
It showcases that HR, as a function, is designed to serve the overall business.
A human resource strategy is important because it showcases the true role of an HR or people function: to help the business through human capital. Leveraging the skills of your workforce by creating a better working environment for everyone.
Start building your own people strategy with our guide
Through the lens of Personio's own Chief People Officer, we built a helpful guide to developing your own people strategy. Grab a copy for yourself right now.
How to develop an HR strategy in 5 simple steps
We put together this five-point plan to show you how you can start building an HR strategy in just a few steps. Here's how we'd recommend approaching things...
Step one: Define success | Work with your management and executive team to define the goals of the business and the proactive role HR can take to support. |
Step two: Adapt goals | Chart your company's goals next to the current goals of your HR team: What could be changed to better suit the goals of the overall business? |
Step three: Define measures | Now that you know what you want to achieve, you need to define the measures to get you there. Start building out programmes (scroll down for inspiration). |
Step four: Gain buy-in | Any HR programmes is going to require management and employee buy-in. Think about ways to socialise and advocate for your measures to reach your goals. |
Step five: Measure success | A great HR department is driven by data. Keep a close eye on your key performance indicators (KPIs) and share feedback with executives to maintain their continued support. |
Step One: Define Success
For example, if your organisation aims to expand globally, HR can focus on talent acquisition strategies that cater specifically to international markets. This could then be tied to headcount goals in certain parts of the world.
Step Two: Adapt Goals
For instance, if your organisation is putting emphasis on innovation, consider revising your HR strategies to attract and retain innovative talent. Maybe you need to roll out an innovation or accelerator hub or host a company-wide hackathon.
Step Three: Define Measures
As an example, if your goal is to enhance employee engagement, you can start by building programmess such as mentorship initiatives or employee recognition programs. Try to focus on those concrete measures that feel the most tangible.
Step Four: Gain Buy-In
You could create workshops to educate managers about the benefits of new performance appraisal methods, gaining their support in the process. Make sure to focus on new initiatives being beneficial and how they help your target persona.
Step Five: Measure Success
To measure success, you could track turnover rates and employee satisfaction scores to measure the impact of retention-focused programs. Establish a floor, a best-case scenario and a baseline, and plot your organisation there to showcase progress.
10 examples of great HR strategies
Need a little bit of inspiration to bring your next great HR strategy to life? Based on the five-point plan above, we've got ten examples of programmes your HR team can implement to reach your goals (no matter what they are).
1. Talent acquisition: Targeted recruitment
To solve for the company goal of hiring more talented people, your HR team launches a targeted recruiting campaign to attract top talent from top schools.
They attend campus job fairs, partner with educational institutions and use social media advertising to attract high-quality candidates.
The goal: Reduce time-to-hire and improve the quality of incoming talent.
2. Diversity and inclusion: Affinity groups
A company-wide goal is to leverage the positive benefits of diversity and inclusion on employee engagement, satisfaction and performance.
To do this, HR forms "affinity groups" to meet regularly and provide input directly to HR and management on how the company can do better on DEIB.
The goal: Improve workplace culture and foster a more diverse workforce.
3. Employee engagement: Quarterly pulse surveys
To maintain high levels of satisfaction and retention, your HR team initiates a programme of quarterly pulse surveys.
Your team runs short, anonymous questionnaires that ask employees about their experiences and perceptions.
The goal: HR can use the feedback to identify areas for improvement and strategies to increase employee engagement.
4. Employee retention: Flexible work arrangements
Your business is struggling with retention. Employees no longer want to work in the office, and are demanding more flexibility (or they're leaving).
HR develops and runs a hybrid working programme which seeks to boost employee autonomy by giving them the option to occasionally work from home.
The goal: Boosting employee retention and reducing regretted attrition rates.
5. Learning and development: Upskilling programmes
Your business identifies the lack of a key skill. Let's take project management as an example, which is impeding the ability to complete projects on time.
HR identifies this gap and runs upskilling training for all current employees to "raise the bar" of this skill without having to open the budget for more headcount.
The goal: Employee completion of training (as a percentage) followed by the knock-on positive effects on productivity and project completion.
6. Succession planning: Leadership development
A goal from the executives is to boost the strength of your leadership bench (without having to invest in massive hiring budgets to bring in new managers).
To do this, HR identifies high-potential employees and enrolls them in a leadership development programme. This includes mentorship, leadership training, and cross-departmental projects to prepare them for future leadership roles.
The goal: Have a talent pool of internal candidates ready for promotion, reducing the need for external hires for critical roles.
7. Compensation and benefits: Pay-for-performance model
Employee performance is becoming a massive issue for your leadership team. They want to give your workforce a shot in the arm to close out the quarter, half or year.
Knowing this, HR introduces a pay-for-performance model, where a portion of employees' compensation is tied to specific performance metrics. This strategy is communicated clearly to all employees and is designed to motivate high performance.
The goal: Boost performance and hit revenue targets.
8. Employee wellbeing: Health and fitness incentives
Employee satisfaction is plummeting and your executive team is beginning to notice. Your team knows it's due to employee wellbeing trending downward.
To combat this trend, your HR team launches a wellness programme that includes discounted gym memberships, weekly yoga sessions and free healthy snacks in the office.
The goal: Track participation rates and conduct surveys to measure its impact on employee wellbeing and productivity.
9. Employee relations: Open door policy
Communication is faltering. Your executive notices this, and wants to make effective communication a tentpole strategy for your entire organisation.
As a way to help with this, HR implements an "Open Door Policy," encouraging employees to directly speak with managers or HR about any concerns, feedback or suggestions. They also set up a whistleblowing channel for more sensitive issues.
The goal: Fostering a culture of openness and trust, and preemptively addressing issues before they escalate.
10. Onboarding: 90-day integration plan
Your executive team is wondering why new employees struggle to learn your ways of working and perform in their first three months.
In order to solve that, HR develops a comprehensive 90-day onboarding programme for new hires. The program includes orientation sessions, training modules and regular check-ins with both peers and managers.
The goal: Accelerate the integration of new employees into the company culture and operational processes, thereby improving time-to-productivity.
Onboarding programmes? We can help with that
Personio can help your HR team build a comprehensive and automated onboarding programme that sets employees off to a flying start. Let us show you how it works and how our all-in-one HR software can benefit your entire HR strategy.
How do you determine the success of an HR strategy?
HR needs to proactively reach out to top-level management and figure out how to define success. Take the initiative and ask your management team some of the following:
What success factors and metrics drive company performance?
How can HR help achieve those things?
Are there other ways HR can support the management team?
Based on these answers, you should be able to derive some concrete goals. Some examples might include:
Increase overall employee productivity
Reduce or optimise hiring costs and ROI
Promote sustainability or DEIB across the organisation
Take those successes and drill them down further. Determine some key performance indicators (KPIs) which you can use to interface with management. Being truly data-driven here is going to benefit your team a bunch.
How do you measure the success of an HR strategy?
Even the best measures are of little use if you can't derive any insights from them. If you also want to convince management that HR is contributing to company goals, data is your friend and partner.
Did you know that only around 25% of HR professionals use data when it comes to evaluating the success of their HR work?
To do this, work with correlations (if in one department employees are very satisfied and turnover and absences are low, and in another, they are just the opposite, then you can make a connection) and draw comparisons. Finally, create a measure for each of your measures and compare results after specific intervals of time.
Execute your HR strategy today with Personio
The best HR strategies are only possible with HR software. That's because an HR software takes care of all the tasks that allow your team to make room for strategy.
Think about it like this, if your team is expected and wants to focus on the large-scale programmes that drive business success, who is going to focus on:
Employee data
Running programmes
Managing and assigning tasks
Reminding people to complete tasks
Beyond that, a software like Personio's can help introduce an evolving level of HR workflow automation for things like onboarding, performance reviews and plenty of other processes that feed into your HR strategy.
Our advice? Speak with an HR expert today to share your top challenges and strategic objectives. We can show you how Personio has helped companies just like yours.
