How to Develop an HR Strategy: The 6 Key Steps

Two HR managers interviewing a candidate for a job position VitalikRadko / Deposit Photos

In the modern environment of startups, strategic planning is as crucial for success as in any other business stage. Choosing the right path is not an easy task, and the journey for success is a road full of surprises and unpredictability.

So how do you choose the right crew to take with you? You need to consider your strategy, and within that strategy, you need to think about human resources. These two elements are not separate concepts, either; a company is only as good as its people, after all.

Therefore, developing an effective HR strategy is key to staying on an upward path. Here is how to build a solid HR foundation on which your company can grow.

1. Understand Your Company

Before you start your human resource planning, you need first to have a clear understanding of who your organisation is; to define this, you need a clear mission statement. In other words, why does your organisation exist?

Your mission statement should ideally be complemented by a vision statement, too, which is a clarification of the direction you want your startup to move in. For example, Toyota USA states that its vision is to be the most respected car company in the US, whereas Chevrolet is committed to dominating the industry; these are two separate visions, even though they are competing in the same market.

Understanding your company and its direction is very important when selecting employees, as they will need to fit your profile and culture.

2. Understand Your Needs

A thorough internal and external audit should give you a good understanding of your short and long-term human resource needs. If you have limited sales experience, for instance, then a priority should be to quickly hire a person with a strong track record in this area.

It's not just about bringing in individual talent, either. When a new company decides to apply a focus strategy, the HR department is responsible for recruiting expertise in that specific market, or for ensuring that existing talent within the company is trained accordingly.

In other words, company goals and human resources needs are matched to optimise results. Your HR department will be required to perform the following:

  • Identifying needs in Human Resources
  • Coordinating the hiring process
  • Guiding employees into applying strategy
  • Monitoring employee performance
  • Managing personnel issues within its scope
  • Specify the structure of your organisation

3. Define Your Structure

The structure of your organisation is important as you need to be aware of the flow of responsibility throughout the organisation. A well-structured work environment has many benefits since it makes the delegation of duties more transparent and, most importantly, it specifies the flow of information and communication within the organisation.

Also, when the management team meets for strategic planning, the HR department should always be involved. HR plays a significant role in creating and maintaining the right structure and conditions for the employees and, while they may not always be the ones directly hiring or firing employees, they are responsible for streamlining the processes, communicating with candidates and recruiters, and acting as a link between management and workforce.

4. Conduct Job Analysis

Job analysis is the process by which you will be able to specify critical elements of a position. It will tell you who is suitable for a specific role, as well as enable you to write a thorough job description.

It also serves other purposes, too. Job analysis helps determine the compensation package for the position, how it will be performance-appraised, and if any training needs have to be addressed.

This last point is vital. Training ensures that employees are abreast of the latest developments and technology, equipped with the appropriate skill set, and receiving opportunities for employee development. Through targeted training, employees not only become more efficient and productive but also grow within their positions. Training - combined with fair compensation - can turn employees into essential assets for your company.

5. Recruit Sensibly

Today's business trends lend themselves favourably to HR strategy; globalisation, for example, is a positive phenomenon for employers. It allows for a bigger pool of candidates, from which you can choose the best fit for the position and the company culture.

Technology also brings new methods into recruiting and selection practices, as well as other HR practices. Now it is much faster and cost-effective to attract candidates, and digitalisation eases the recruiting process.

In the case of lacking the internal expertise to hire the right people, then outsourcing is widely available, with a plethora of recruiters, headhunters and employment agencies operating locally, nationally and even internationally to connect you with a selection of appropriate candidates.

The benefits of outsourcing your HR needs are multifaceted, too. HR consultants are experts in connecting candidates and employers, while they also use highly efficient screening and interview techniques to match the right person to the position. Agencies can potentially save you time, while they only get paid if they succeed in filling the vacancy.

6. Keep Your Best Employees

High employee turnover is a nightmare. It costs money, time and productivity. Having a strategy to retain employees is an excellent idea in helping to keep expenses low, productivity high, and continuity in development.

Having already mentioned the importance of understanding the organisation and its vision and mission, finding the right match for the position becomes simpler. According to an SHRM study, 69% of employees are more likely to stay with the company for three years if the onboarding process is pleasant, effective and efficient.

Communication also promotes a good relationship within the working environment. Allowing the employees to express concerns and share opinions will make them feel closer to the organisation.

Excellent communication is not enough to keep good employees in their positions, though. An enticing rewards programme is essential, with 80% of employees in the US admitting that they would choose a job with good benefits over one with higher pay.

Rewarding your employees is also wise. Throw a company party, recognise an employee's performance among co-workers, or utilise any other idea you might have to celebrate a company victory. Don't forget, either, that your employees need to have relaxation time. If you are demanding high performance, then you should allow plenty of time for relaxation, too.


In today's business environment, where competition is intense, and brand parity characterises the market, managers and entrepreneurs should know that their people are their most valuable commodity. Therefore, forming a superior human resources strategy gives you a competitive advantage.

Remember: when customer support keeps customers happy, they become loyal and repeat customers. When the marketing team is excelling in creating stellar campaigns promoting a brand, their market share grows. No machine can replace a warm smile from behind the reception desk, and no computer can come up with a creative idea or slogan. Keep your employees happy, and they, in turn, will keep your customers delighted.

Based on your experiences, what piece of HR strategy advice would you give? Let us know in the comments below.