How to Develop an HR Strategy

HR Strategic Planning

In the modern environment of startups or new businesses, strategic planning is as important for success as in any other business stage. The only difference with more experienced and large corporations is -probably- the lack of experience and limits on capital. Choosing the right path is not an easy task, and the journey for success is a road full of surprises and unpredictability.

For this reason, choosing who you will take the journey with is vital. How do you choose the right crew? You need to consider your strategy, and within your strategy, you need to think about human resources. Strategy and human resources are not separate concepts, but rather a bonding mix. Like Kathryn Minshew said, a company is only as good as its people.

Before understanding others, understand your company.

Before you start your human resource planning you need to have a clear understanding of who your organisation is. Depending on its character, only people with certain qualities could build a strong and beneficial relationship with the business. To define who your organisation is, you need a clear definition of your mission statement. In other words, why does your organisation exist? To make a profit, of course, but this is not what is meant here.

For example, is it to offer superior quality services in the transportation industry? Coca-Cola’s mission statement is simple. They exist to refresh the world, inspire moments, create value etc. By reading your mission statement, one should understand what you stand for, and in the case of Human Resources, a job seeker and the employer should be able to confer if these are shared values and if the fit is right. Having a clear mission statement is always complemented by a vision statement, meaning the direction in which the startup wants to move forward in. Toyota Motor Sales U.S.A.,  clearly states that their vision is to be the most successful and respected car company in America. Knowing this, if respect is not on the top priorities of your work personality, but competitiveness is, then you would probably be better suited at other organizations like Chevrolet that is committed in dominating the industry in automotive excellence in the car market.

Set your goals.

Knowing your company and where it is headed to is very important in selecting employees that fit its profile and culture.

A thorough internal and external audit should give you a good understanding in regards to the strategies you should follow and your human resource needs. If for example in your SWOT analysis you see that you have limited sales experience, a priority should be to hire a person with sales experience and skills.

When the management team meets for strategic planning, the HR department should always be involved. The reason being that HR plays a major role in creating and maintaining the right structure and conditions for the employees that will be part of the realisation of any strategic planning decisions. While they may not always be the ones directly interviewing and hiring or firing employees, they are the department responsible for streamlining these processes, communicating with candidates and recruiters, and keeping the delicate balancing act of being in-between the management and workforce. When for example, cost leadership is a strategy of the company, the HR department will see to it that employee costs are reduced while maintaining efficiency in production. When a new company decides to apply a focus strategy, the HR department would see that expertise from the specific market is recruited, or that talent currently working in the company is trained for the needs of applying the strategy.

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

  1. Identifying needs in Human Resources
  2. Coordinating the hiring process
  3. Guiding employees into applying strategy
  4. Monitoring employee performance
  5. Managing personnel issues within its scope

Specify the structure of your organization

The structure of an organization is an important component in developing HR strategies and vice versa. You need to know who reports to whom, and the flow of responsibility and power throughout the organization. A well-structured work environment has many benefits since it makes the delegation of responsibilities more clear, and most importantly it specifies the flow of information and communication within the organization.

Conduct Job analysis-A valuable HR strategic tool

Job analysis is the tool that will specify key elements of a specific position. The job analysis will tell you who is suitable for a specific position. A complete job analysis will provide the employer with two additional products that will help in the recruiting process, namely job descriptions and specifications.

The job analysis serves a number of purposes other than giving you valuable information about who would be suitable for the job. Job analysis also helps determine the compensation package for the position, how performance will be appraised and, any training required. Training is vital to keeping abreast with the latest developments and technology, ensuring the appropriate skillset, and providing an opportunity for employee development. Through targeted training, employees not only become more efficient and productive, but also develop within their positions. Additionally, training is an investment that adds value to the company at the same time that it creates value for the company to the employee. Training combined with fair compensation, will turn employees into important assets for the company. To quote Sir Richard Branson “Train people well enough so they can leave. Treat them well enough so they don’t have to”.

Recruiting and selection practices

The current trends in today’s business world provide more options in creating the right HR strategy. For example, globalisation is a positive phenomenon for employers. It allows for a bigger pool of candidates, from which they 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. For one they are experts in connecting the right candidates and employers, they use highly efficient screening and interview techniques and they can employ a number of tests in matching the right person to the position. Agencies can save a startup time and are paid only when they actually succeed in filling the vacancy.

Keeping your 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 mentioned earlier the importance of understanding the organization 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.

Good communication and community  spirit between employer and workforce is not enough to keep good employees in their positions. Good rewards are also essential, not necessarily pertaining to salary. A reward could mean non-financial benefits as well. To get an understanding of the power of benefits, according to a survey for AIPA, 80% of employees (in America) would choose a job with more benefits than a higher pay.

A Harvard Business Review article suggests 5 R’s of good employee relationships. An organization should give employees Responsibility, which shows that they are trusted, show them Respect, share the organizations Revenues with employees and like mentioned before, don’t forget to Reward your employees. Throw a company party, recognise an employee’s performance among co-workers, or utilise any other idea you might have to reward good performance. Finally the employee needs to have Relaxation time. Since employers demand high performance then they should give plenty of time for relaxation.

In today’s environment where competition is intense, and brand parity characterises the market, managers and entrepreneurs should know that their people are their most valuable commodity. In fact forming a superior human resources strategy gives you a competitive advantage. 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 will keep your customers delighted.