1. Definition and importance
The human resources strategy is a business’s global plan to manage its human capital to line up with its mission, vision, and goals. We are therefore talking about a long-term plan.
The Human Resource strategy focuses on all crucial areas of human resources, such as searching for and training employees, implementing and organizing benefits, evaluating performance, and offering development opportunities.
Keep in mind that the HR function is no longer just administrative in our times. Now, it unites with the company strategy, standards, long-term viability goals, and strong organizational culture support.
Putting in place an HR strategy is important because it defines how well HR processes work in your company and guarantees they are in accordance with the organization’s goals.
How can you and your organization benefit from successful human resources strategies?
- Improved relationships at work
- Accelerated implementation of HR policies
- Better hiring decisions and reduced costs
- Improved productivity, and engagement
- Improve the business environment
- Improved retention rate, thanks to a better level of employee loyalty
- Effective resource management
- Strengthen the organizational culture
- Proactively set and follow goals and objectives
- Align your people with your business vision
- Better systems of work
- Understand better the current situation, what are the opportunities and threats
- Improved teamwork and collaboration
- Shared leadership across teams
- Enhanced level of workplace ethics.
As you can see, you are looking at improvements not only on a business performance level but also on an employee state-of-mind level.
2. Steps for strategic HR planning
The road to developing a strategic HR plan starts by identifying where your company is right now, in the present and only then you will be able to create an image of the future, plus the methods you will be using to get there.
What are the steps to human resource planning (HRP)?
In the following paragraphs, we will be expanding on the 7 essential steps of strategic HR planning.
- Understand your organization’s goals
- Assess your current capabilities and strategic positioning
- Evaluate your future HR needs
- Discuss if additional tools are necessary
- Formulate a strategic plan
- Execute and manage the plan
- Evaluate your process and make corrections if needed.
Let's start with the first step.
Step 1: Understand your organization’s goals
Crucial in putting together the plan. As mentioned before, a human resources strategy is closely linked to the company’s objectives, mission, vision and values. So make sure you have all these clear.
When discussing goals regarding Human Resources, here are some examples you can consider:
- Increase staff retention
- Improve employee experience
- Boost staff performance
- Enhance employee engagement
- Reevaluate employee benefits.
Knowing that just setting big, generic goals will not work is essential. You will need to break these ideas into smart goals that are easier to reach that have clear milestones and deadlines.
Related: If you are looking for smart goals for HR professionals, we have the key examples you aim for.
Step 2: Assess your current capabilities and strategic positioning
Your strategic positioning is the location from where you can start building on your goals and objectives. You need to identify strengths and weaknesses, both on a global level, and on an individual one(related to each and every one of your employees). Determine who is skilled in what areas, so you can then match every contribution to the organization’s objectives. Don’t be afraid to mention the barriers you find during the analysis. It’s the key to improvement.
You can perform a SWOT analysis. SWOT stands for: strengths, weaknesses, opportunities, and threats and it’s a commonly used technique to see how you can improve the company.
Step 3: Evaluate your future HR needs
After assessing strengths and weaknesses, you will be able to determine how all employees will be of help throughout the process, how to reduce the risk of threats and more weaknesses, and what will take you to the ultimate goal: achieving the company’s objectives.
You have to ask yourself:
- Which new job positions you will need to fill?
- Which skills current employees will need to acquire to fill the new jobs?
- If you’re adequately using the abilities of your current employees
- If your current HR professionals and the hiring processes they use can provide the desired growth.
You can learn more about the workforce planning and the process involved within our in-detail guide.
Step 4: Discuss if additional tools are necessary
The IT department can be of help during this step. Check with them to see if the tools you are currently using are enough for enabling your employees to do their job most efficiently. Procedures such as scheduling, time recording, project management, absence tracking, and goal setting can help a team combine their efforts and enhance productivity. There are numerous various tools available to be taken into consideration, such as:
- Digital tools for recruitment: the task of recruiting new talent can be exhausting unless you offer your HR professionals the possibility to utilize a recruitment tool that will make their lives much easier and will streamline the whole process.
- Time-management software: Use a digital time clock to make it easier for your human resources team to manage time records, improve attendance, and create insightful HR reports. With LeaveBoard, the tedious task of managing absences and time-off will vanish. Human error is drastically reduced since the time spent working and the leaves of absence are easily tracked and recorded with LeaveBoard.
- Online communication platforms: Streamline communication and instant messaging within your organization, with cool platforms such as the Slack, Microsoft Teams or Google Workplace. In this way, you reduce the number of team meetings and increase employee productivity.
- Project/task management platforms: When you want to ensure that all parts of your business are covered, each employee has clear tasks, objectives and timelines and a clear progress is visible, then you need to invest in tools that drive overall productivity. Among our favourites: Asana, Monday, Trello, Jira, Notion or Basecamp.
Tip: Time and Employee management have never been more fun. You can now discover a new way to automate HR tasks and streamline absence management with automated policies and dynamic workflows. All these with one cloud-based HR software: LeaveBoard.
Step 5: Formulate a strategic plan
It's time to assemble a strategic plan to obtain your objectives successfully. Reflect on what your objectives for HR management are. Add milestones and deadlines and make them realistic. The objectives should align with the goals you have at the company level. In this planning process, you need to consider that your team will not be able to run so many actions simultaneously, so decide on the 2-3 most important for this quarter and proceed with the implementation.
To help you on deciding on the answer to the questions regarding strategic HR management objectives:
- which action will bring the most significant impact on the organization?
- which actions align best with the company's mission and vision?
- how do you make the difference between important and not urgent?
- what would be your mechanism for evaluating the progress of your action?
Do not hesitate to reflect on time-bound objectives: Employees can solve some activities in the short term (updating the website with the new roles, adding the new company culture page), however more complex work (improving performance by 20% among the sales team) requires a mix of people to be involved over a long term (employees, managers, HR, coaches), with constant feedback, tracking, and guidance on how to go from the current situation too much better results.
Another way to look at the planning and implementation of your SHRM is by structuring your objectives by area of work:
A. Recruiting and onboarding
- Reduce hiring times by 20%
B. Learning and development
- Setup a training path for each new manager that joins the company starting March
C. Internal processes
- Start using an ATS from Q2
- Hire 1 graphic designer and 1 app developer by Q2
- Increase recurring revenue by 10% this quarter.
You can learn additional examples of Objectives and Key Results for the core teams within your business.
Step 6: Execute and manage the plan
Having understood what your priorities are, now it's time to start implementing them. Tools to keep track of various objectives and key performance indicators + the tasks associated with multiple team members so that these responsibilities don't slip away. At any moment, you will know what is on track and what risks delays and might need additional support to get the action to the next step.
Having weekly 1-on-1 meetings with the contributors will help in advance with the key priorities or if additional resources are needed.
If you are now at the point where you need to grow your human capital and improve the skills of your current employees in order to meet the needs and objectives of your company, then here are the actions you need to keep in mind:
- Start the recruiting: by looking for candidates who possess the skills you found to be needed in the early stages of the planning process.
- Set up a selection process: interview candidates, put together relevant questions and tests to choose the right ones for your organization.
- Start the hiring: make offers to the qualified candidates and conduct background checks.
- Draft and implement an onboarding process: it’s key to retaining employees. It makes them feel appreciated from day one and be part of the organization, regardless of their position.
Tip: We have a new hire checklist, in case you’re looking for one.
The team at AIHR call this Full Cycle Recruiting and provide a interesting perspective on the entire process:
Step 7: Evaluate your process and make corrections if needed
Establish a timeline after which you will assess your progress, identify points where improvement is required further and review the implemented changes to see if they have led to the company’s growth.
One year is usually needed for HR strategies to be implemented, don’t rush the process. You should look at the following metrics to be able to determine the strategies’ success:
Achieving some HR KPIs will need more involvement from your side, while others are straightforward. Think about eliminating the toxic management style and having a more transparent quarterly performance goal. Using tools like Asana to have everything aligned is a good practice. You can track all the objectives, tasks, and responsible persons, how advanced each project is, and if support is needed.
If you receive feedback like the team has to focus on an important project, maybe re-evaluating the priorities and extending the deadline or even removing specific objectives from this quarter's planning will not be a major problem.
Constant progress toward realizing your objectives will accelerate goal achievement and get you closer to achieving your vision.
“The value of a business is a function of how well the financial capital and intellectual capital are managed by human capital. You’d better get the human capital part right.” – Dave Bookbinder
Examples of HR strategies
Here are top examples of what you could take into account when creating a successful strategy for your organization:
- A positive employee onboarding experience
- Frequent communication between employee and manager
- Comprehensive benefits package
- Competitive salaries
- Career management
- Employee wellbeing
- Performance management
- Create a succession plan for leadership
- Growth opportunities, both professional and personal
- Transparency in all the organization’s processes
- Improve employee relations at work
- Employee retention policies
- Social responsibility
- Inclusive culture, with a focus on diversity.
To better understand the big picture regarding strategic HR management, the processes, policies, and action plan you need to reflect on, McConnell Consulting highlights a set of additional areas that are very relevant to keep the employees happy and motivated in this illustration.
4. Final tips and tricks
Keep in mind that every organization is unique, and therefore, its needs are unique.
Follow the steps we suggested, but always remember that these strategies should deeply reflect your company’s vision and goals. Here are some final tricks we want to share with you:
- It is crucial to involve the HR professionals in designing the HR strategy. They need to understand the whole process, from step 1 to the end.
- After the plan has been designed, check if all HR practices and procedures are aligned with the new strategy.
- Keep track of your work: make sure you monitor and measure your progress, as the plan is being implemented over the period you agreed on.
- Benefits and incentives should be aligned with the new strategy.
- Management has to be on board: upper management has to agree with the view of the HR professionals, give them support, confidence, and of course, a relevant budget.
If it’s the first time you’re getting involved in developing such a strategic plan, then we recommend the following:
- Create a document on the HR Strategy plan
- Align your practices according to your plan
- Reflect on the causes of turnover or absenteeism and create policies to handle them
- Have effective plans for resignations or retirement
- Align the Employee Development plan with the strategic goals of the company
- Link individual performance with the team objectives and corporation goals
- Align appropriate resources to HR to implement such strategies.
Strategic human resource management is paramount for every company. There is no minimum number of employees a company should have before deciding to embark on this journey of creating HR strategies. Now is a perfect time!
To expedite your company’s future expansion, and digital transformation, you should use tools and software that free up your time and allow you to focus on the most strategic matter, such as LeaveBoard.
Sign-up for a free, no obligations demo of our HR software to see how easy it is to transform your company's HR experience.
A well-articulated HR management strategy plan will bring your business closer to success. Having clear goals, objectives, and a process in which everyone knows their role helps to create a productive environment where employees are happy and empowered to do their best.
“In order to build a rewarding employee experience, you need to understand what matters most to your people.” – Julie Bevacqua