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Though strategic human resources management (HRM) can positively impact a business, it’s often undervalued or overlooked. The reason is that many companies prefer to cut costs in the present, refusing to look at how steep the price for replacing employees really is in the long term.
In this article, we will be looking at how tactical HRM combined with business strategy can reduce turnover, increase employee happiness, and improve employee productivity. No matter the size of your company, this kind of organizational masterplan can help you enjoy improved internal and financial performance.
Ready to find out more? Let’s get right into defining what strategic HR practices are and looking at some great examples worth mimicking.
What is an HR strategy?
An HR strategy is a plan of action that’s implemented to solve business challenges with a people-centric approach. That requires the involvement of the human resource department in policy creation, performance management, and building corporate culture to improve employee experience.
While a lot of the time HR departments are responsible for hiring new employees and processing payroll, they can (and should) do much more. By recognizing the significance of a good recruitment strategy, excellent talent management, and fair workers compensation, HR can help an organization achieve even its biggest objectives.
What makes a successful HR strategy?
Successful HR processes and strategy unify a company’s workforce interdepartmentally, and help them move toward achieving a common goal. It does so by not only looking at staff members’ current skillsets but also considering further development and training opportunities to make the most out of the team’s potential.
Thus, HR professionals should include the following in their strategy:
- Building and maintaining a strong corporate image to attract top talent and integrate the efforts of current employees
- Focusing on improving employee engagement as though the organization’s “life” depended on it — because to a large extent it does
- Adhering to legal requirements, so that both the business and the employees are protected
- Developing career advancement programs to provide current and prospective employees with opportunities for professional growth
- Measuring the team’s output with a performance management system to ensure everyone is contributing to the right objectives
HR strategy examples
According to a report by Gallup, only 21% of employees feel engaged at work. That’s not-so-great news for companies, as low employee engagement can manifest in decreased commitment and consistency, poorer output quality, and, in some cases, compromised safety.
The good news is that a solid HR strategy can prevent this by boosting employee motivation, retention, and productivity. Let’s look at the components that make up an effective HR strategy.
1. Purposeful hiring
If you understand your company strategy, you’ll know what type of candidates you’ll need to onboard to achieve your objectives. Hiring the right candidate can be tricky, but it’s crucial that your recruitment process is informed by your goals.
While the ideal candidate looks different for every role, you should keep company values in mind when assessing their culture fit and working style. King, creator of Candy Crush Saga, is just one example of a company with clearly defined values: “How we work together determines what we can achieve,” they state on their website. “Our values guide us every day in our work, in our decisions, and in our interactions with each other and our players.”
Aligning recruitment with your values is the first step towards assuring a workplace of like-minded people with common goals.
2. A good onboarding experience
A good employee onboarding experience is essential to any HR strategy. Hiring talent is an expensive process that can go to waste if time and effort are not invested in employee orientation. In fact, according to Digitate’s Super CIO report, people who have a negative onboarding experience are twice as likely to seek a different opportunity in the immediate future.
A great example of a foolproof onboarding strategy is that of Salesforce, voted the number one best workplace in Europe for four consecutive years. They onboard approximately 4,000 new hires each year with bootcamp, online learning resources, and personalized orientation to ensure employees feel welcomed.
3. Frequent communication
Bringing the organization together for an all-hands meeting is a great way to share updates, statistics and executive decisions. Patty McCord, former Chief Talent Officer at Netflix, is quoted in an interview with Bob Sutton, best-selling author of Good Boss, Bad Boss [paid link], saying, “The most important role I played at Netflix was, at the end of every executive meeting, to say ‘Have we made any decisions in the room today, and (if we have) how are we going to communicate them?’”.
Engaging with employees regularly will monitor ever-changing motivations and opinions but, more importantly, it will drive transparency and promote open discussion. Employees want to know their thoughts and concerns can be voiced and heard.
Every all-hands should have ample time for Q&As — and remember: don’t avoid the tough questions. Netflix strives to “share information openly, broadly, and deliberately”, and that includes the difficult conversations.
4. Growth opportunities
In their 2020 Retention Report, the Work Institute found that 78% of cases of employees quitting could have been prevented by the employer. Not only that, but career development keeps consistently ranking as a top reason for employee turnover.
So, what’s the solution?
Promotion opportunities can’t be produced overnight. When “hard” career advancements, such as pay rises and promotions, aren’t an option, “soft” progression is essential. This means more responsibilities, projects, and an increased role scope.
PwC, listed on Glassdoor as one of the top companies for career growth, provides its employees with ongoing career support from in-house career and guidance specialists. Everyone is allocated a dedicated career coach who is there to discuss performance and development.
Though not every company has the budget of PwC, it’s a clear example of the importance of development in the workplace — both hard and soft.
5. Competitive salaries
When it comes to hiring top talent, the market is extremely competitive. An attractive salary, in line with market value or above, will go a long way in bringing great candidates through the door.
But there’s more to competitive salaries than just the initial appeal. When employees are paid well, they feel valued, secure, and motivated, which, in turn, benefits the company’s retention rates and productivity.
In 2019, Credit Suisse was found to be the top highest-paying company in the UK, with a median base salary of $109,900. While it takes a multitude of incentives to retain employees, Credit Suisse are already reaping the benefits, with voluntary turnover at 9.8% in 2019 — down by 1.6% from the previous year and 5.2% lower than the national average.
6. Benefits packages
As we saw in 2020, when circumstances shift (such as workers moving into a remote working landscape), benefits have to follow suit. Employees won’t care about the ping-pong table and beanbags if they can’t access them. Instead, they’re now more likely to look for benefits that focus on health, wellbeing and flexibility.
To stand out against competitors, acknowledge the importance of employee benefits, listen to your employee needs, and analyze market demand.
7. Social responsibility
Corporate social responsibility (CSR) is a self-regulatory business model that focuses on social, economic, and environmental issues. As a result, it can be hugely appealing to candidates and employees alike.
A Glassdoor survey showed that 75% of those aged between 18 and 34 expect their employer to take a stand on important issues. These include constitutional rights, equal rights, and climate change.
When businesses adopt ethical practices such as carbon offsetting or charitable donation, they build employee trust, create a better work environment, and serve as responsible role models in the industry. Global ice cream brand Ben & Jerry’s support a wide range of issues from refugees to racial injustice — but if your business is new to CSR, start small and set short-term goals to build momentum.
Employees feel most invested when they have a clear vision of company goals and strategy. When a business is committed to a high level of transparency, they see increases in employee trust, productivity and innovation.
So, what can you do to become transparent? Establish communication channels for the business to share information on revenue, performance and strategy, and for employees to ask questions. These could include all-hands meetings, newsletters or live Q&As.
Obtaining “OpenCompany” status on Glassdoor is also a great way of signaling to candidates that your business embraces workplace transparency. Not only that, but it also provides increased profile exposure, which ensures jobseekers can discover the opportunities you have available.
9. Employee wellbeing
The Mental Health Foundation believes that addressing wellbeing and mental health at work increases productivity by as much as 12%. While most businesses could benefit from a dedicated employee assistance programme, there are other ways to promote employee wellbeing.
British Airways, Virgin Media, Samsung and more have turned to mental health platforms like Unmind to measure, understand, and improve the mental wellbeing of their employees.
10. Diversity and inclusion
Diversity and inclusion (D&I) often walks hand in hand with CSR. By committing to D&I, businesses promise to fight for equality and a culture that welcomes all backgrounds. According to Glassdoor, 50% of employees want their current employer to increase diversity efforts.
Though diverse hiring is important, a D&I initiative can also be driven internally through workshops, education, and calendar event celebrations. Employees want to see that companies are active advocates for communities, whether it be BAME or LGBTQ+.
Of course, there may be aspects of D&I that are more aligned with your company culture than others. Global tech company Accenture, for example, have long sponsored support group Girls Who Code in an attempt to triple the number of women in computing by 2025.
It’s no surprise that cultivating human capital within an organization promotes growth. When human resource departments implement people-centric, strategic plans, they can increase productivity and save money in the long run.
As no two companies are the same, these plans can take many forms: upskilling, competitive benefits, mental health support or any well-thought-out tactic that can encourage a sense of thriving among employees.
When coming up with your own human resources strategy, keep in mind that:
- Technology is your friend: Whether that’s in the form of a mental health platform or a performance management system.
- A good deed goes a long way: An increasing number of employees will expect companies to operate consciously on a social and environmental level.
- Professional growth opportunities are essential: Attracting and retaining individuals who are passionate about what they do is crucial — so help them help you!
- Make sure your perks and benefits are relevant: Replacing your “free coffee and snacks” with a cycle-to-work scheme at a time of skyrocketing fuel prices, for example, could be wise.
What HR strategies does your company have in place? Which do you feel is the most important? Let us know in the comments below.
Originally posted 27 December 2020 and contains contributions by Heather Shanley.