Most organizations understand the basics of human resources: help shape policies, write employee manuals, manage benefits, avoid liabilities, acquire talent, train and onboard employees, resolve conflicts.
Going beyond those basics offers a huge opportunity. An HR strategy can help define a roadmap for the organization to meet its goals.
Support Organizational Initiatives
Every organization’s business model includes one critical component: people. That’s why an HR strategy is critical.
To be successful, an HR strategy should closely align with business goals. The strategy should include key metrics used to measure progress towards meeting those goals.
By focusing on and monitoring those metrics, an organization can:
- Accurately understand where an organization is now
- Identify gaps and issues early
- Formulate strategies to solve those issues and address those gaps
Organizations should regularly assess recruiting, onboarding, and training, as well as ongoing employee performance, to measure progress. Are teams receiving the resources they need? Is training helping employees achieve full productivity quickly? The right metrics can answer these and other important questions.
Keep in mind that an HR strategy does not include those areas tied to day-to-day operations. Metrics such as customer satisfaction, revenue, and employee engagement don’t belong in the HR strategy; they’re simply part of basic organizational health.
Prepare for the Unexpected
A strong HR strategy should also include contingency plans to manage situations that can’t be foreseen.
A prime example of that was the early days of the COVID-19 pandemic. Companies needed to pivot quickly as the situation evolved and CDC recommendations changed. As organizations and individuals began adopting new precautions, many companies shifted their production capabilities to provide personal protection equipment, while others expanded their workforces to accommodate the overwhelming demand for home deliveries. At that time, it was important to re-focus on developing the skills of the current workforce and quickly acquiring new talent.
With the pandemic entering a new phase, strategic-thinking HR departments must plan for different scenarios as more people feel comfortable going out in public and consumer demand is shifting accordingly.
As the external environment changes, the business strategy changes. Having an HR strategy that aligns with changing priorities will enable the organization to succeed in the current and future environment.
Set Realistic Goals
There are no one-size-fits-all goals for an HR strategy; goals will vary based on the organization and the business strategy.
For example, say that an organization is planning a major project in the near future, and it’s important to have employees with the right skills who will see the project through from beginning to end. HR goals might include the following:
- Identify critical roles and skills needed by [DATE]
- 95% of critical roles are filled and employees are trained by [DATE]
- The organization has [NUMBER] of employees cross-trained and able to assume key roles by [DATE]
- The organization retains 95% of critical roles for [NUMBER] months
Goals may often include recruiting and retention for one simple reason: employee turnover is expensive. According to the Work Institute, voluntary turnover costs organizations more than $630 billion per year, and that cost is rising. Add up the cost to replace an employee—including the time it takes a new employee to become fully productive—and each turnover can take $15,000 off the bottom line. Employees who leave in the first 90 days deliver little to no value to the organization.
Keep in mind that working to reach or exceed the goals of an HR strategy can significantly increase employee engagement and retention.
Best Practices for HR Strategy Design
Although the actual strategies will vary, these are the questions to ask internally and the steps to take when designing and implementing an effective HR strategy.
- Understand the business strategic plan and how the organization will operate in the future. What work is being done now? What work will need to be done in the future? Then, how can HR support this shift?
- Create a plan to move the organization towards the culture it will need in the future and to develop any new skills the organization will require.
- Understand the current state of HR relative to the desired future state. What are our strengths? Weaknesses? Opportunities and threats?
- Benchmark against similar organizations to measure progress not only internally, but also compared to others. Are other companies following HR best practices that you can adapt to your situation?
- Are there any HR issues that will prevent you from achieving your goals? What are the gaps? Is the HR system doing what it needs to do? Are there any leadership gaps that need to be filled?
- Are there any processes getting in the way? For example, recruiting has changed significantly in the past two years, with job seekers having much more power and organizations often having much less.
- Identify the metrics necessary to measure progress, along with goals for each one, and track each one regularly.
- Continually visit with business leaders to see how things are going and to determine whether you need to update your plan as well.
The Lindenberger Group can help organizations design and manage HR strategies that align with the organization’s business strategy. For more information or to discuss your HR needs, please contact us at 609-730-1049 or send us an email.