A Human Resource strategy is a business’s overall plan for managing its human capital to align it with its organization goals. The Human Resource strategy sets the direction for all the key areas of HR, including hiring, performance appraisal, development, and compensation. The HR strategy is thus a long-term plan that dictates HR practices throughout the organization. HR Strategy is the strategy adopted by an organization which aims at integrating an organization’s culture, its employees and system by coordinating a set of actions to get the required business goals.
Therefore it must be aligned to the organization’s mission, vision and goals. The characteristics of the industry in which the organizations are to be analyzed and its competitive advantage need to be determined for developing an HR strategy. Human resources management is essential, even crucial for the functioning of your organization. Any viable business needs human resources, or talent, to move forward the enterprise mission, values and principles. And of course, to do the work. Strategic human resource management enables alignment between the HR or HR function and your company’s business goals. Human resource strategy differs from traditional HR in a couple of important ways.
HR strategy is long-term and focuses on workforce planning as well as development from a forward-thinking viewpoint. Traditional HR, or personnel as it was once referred to as, is focused more on the transactional nature of Human resources, such as reviewing applications, maintaining a census of FTEs (full-time equivalents) and signing up talent for insurance benefits. Strategic human resource management, on the other hand, focuses on aligning employee qualifications with the organization’s workforce needs. This type of HR management provides employee training and development to prepare the workforce for company expansion, as well as the employee’s professional growth.
Types of Human Resource Strategies
The human resources department generally has multiple functional areas. They include recruitment and talent acquisition; employee relations and labor relations; compensation and benefits; workplace safety; and employee training and development. Although these operating areas may function separately, they are interdependent, meaning you cannot have recruitment and talent acquisition separate from compensation benefits. You also must have employee training and development if you’re thinking of aligning organizational goals with human resources.
Employee relations are required to sustain positive employment relationships among the workforce, but labor relations may only be required if your workforce is unionized or under the threat of becoming unionized. Employers are needed to provide a safe work environment for employees, so workplace safety is another needed operational area.
While it isn’t the ideal situation, it is possible to engage in a HR strategy in one operating area and let strategy take the back burner in another functional region. Overall, however, human resources strategy should put on the hat of a holistic approach. The HR department supervisor or director should be part of the executive team if the company’s HR approach is, indeed, a strategic one. The types of human resources strategies may differ based on the functional region.
Why Do You Need Human Resource Strategy?
If you intend to stay in business, a human resource strategy is critical for your business to survive. Businesses that focus solely on the transactional nature of human resources, such as payroll processing, record keeping and administering sick leave policies may find themselves scrambling to prepare for future growth. You need human resource strategy to stay on par with your competitors and ultimately to exceed those competitors’ capabilities if you want to become best-in-class in the industry or in your market. Because human resource strategy focuses on individual and organizational growth, you also need a strategic plan for sustaining job satisfaction and engagement throughout your workforce.
Human resource strategy addresses the systemic issues that are inevitable in any organization in a proactive way. For example, if your organization is a team-focused work environment, there will be, at some point, workplace conflict. Whether the conflict is between employees or between supervisors and employees, it’s incumbent upon the human resources department to create an environment where supervisors are capable of resolving interdepartmental conflict so that it doesn’t affect other departments or the entire organization.
Human resource strategy also is important if you are in an industry where there is rapid and ongoing change, such as the technology industry. It will be virtually impossible for your company to survive in an industry where change is constant. Greek philosopher Heraclitus said thousands of years ago that the only thing that is constant in life is change, and, of course, he wasn’t referring to the technology industry.
Your company’s reputation correlates with your human resource strategy. The job-seeker community is relatively small. If your company is known for its proactive stance on employees’ personal and professional development, it can foster high morale in your current workforce. Your forward-thinking strategy and actions will also boost your reputation in the job-seeking community. Inc. magazine routinely profiles “The Best 50 Employers,” and many of the companies they choose are applauded for their strategic vision, as well as their efforts to give their employees the tools they need to be successful.
Your stellar business reputation will also be a significant benefit for customer acquisition and for keeping current customers happy. Whether you are still developing your customer base or have many customers, an effective, well-thought-out human resource strategy is bound to pay off tremendously in customer support. The return on investment for your human resource strategic efforts is improved employee engagement scores, as well as consistently high client satisfaction and positive feedback.
How to Improve Your Human Resource Strategy
The key to making your human resource strategy better is to be proactive, not reactive. And when you grow your human resource strategy, document it. But don’t let that strategic plan just sit on the back-burner. Include your human resources staff members in the development of a strategy. Both HR management and staff members should be involved in communication about strategic moves since everyone in the department will have valuable input. While the HR manager or director will be the person in high-level discussions with executive leadership, they should present ideas from all people involved in the communication. The manager should also give credit where credit is due, especially if HR staff contribute ideas that work to the company’s advantage.
Another way to improve your human resource strategy is to recruit HR professionals who are unorthodox practitioners. During the recruitment and selection process of HR team members, ask interview questions that show what they believe are the goals of a human resources board. Technical knowledge and skills, such as understanding labor law and building compensation plans, are great qualifications, but if you’re creating a world-class HR team, you will need specialists who see strategy as a means to demonstrate their commitment, skill, and persistence to carry out the entrepreneurial mission.