Does your company have a people strategy? Which is another way of asking: Are you focused enough on your company’s most valuable asset: your people?
If not you’re not sure, you might be falling behind in your efforts to attract and retain employees in today’s job market. Furthermore, your organization may not be achieving the performance and results that you expect.
This is because your people have a huge impact on the ability of your business to:
- Execute on business strategy
- Meet business goals
- Boost your bottom line
In this article, you will learn:
What is a people strategy?
It’s your company’s strategy for how you’ll support the needs and professional growth of your team over the employee lifecycle and, ultimately, how you’ll leverage your people to grow your business, improve productivity and achieve specific business goals.
This includes how you plan to:
- Attract top talent
- Develop your workforce
- Train the next class of leaders
- Engage and motivate employees, while strengthening the relationship between them and your company
- Retain team members for the long term
Examples of what a people strategy encompasses are:
- Recruiting and acquisition of people who embody the competencies and skills your organization needs; align with your mission, vision and values; and are a cultural fit
- Hiring the right people for the right roles, at the right time
- Onboarding
- Creating a positive, people-first workplace culture
- Strategic workforce management
- Enhancing diversity and inclusion
- Offering rewards and recognition
- Career pathing
- Succession planning
- Change management
- Guiding employees’ daily activities and efforts in the desired direction
- Developing and training your workforce
- Identifying and cultivating the most critical competencies that your company needs in today’s workplace
- Upskilling, reskilling and cross-training employees
- Engagement-enhancing strategies
- Retention strategies
- Leadership selection (identifying best performers and formulating their next steps)
- Strengthening your leadership team
- Exit and offboarding
How does people strategy differ from traditional HR?
Traditional human resources (HR) is a set of consistent functions for managing essential HR tasks – like payroll and benefits administration – efficiently. These are well-established practices that align with organizational policies and are updated continually to maintain compliance and workforce stability. Traditional HR is carried out by HR personnel.
On the other hand, a people strategy is a long-term, holistic effort geared toward leveraging people for the benefit of the business and serving employees’ professional growth based on their goals, interests and talents. These are carefully considered solutions made in alignment with your workplace mission, vision and values, and with involvement and approval of leadership. These initiatives are monitored for effectiveness and should evolve to meet new market and industry challenges. Successful implementation of a people strategy involves the participation and buy-in of everyone in the organization.
For the best chance at sustained business success, you need both.
Why do you need a people strategy?
To help your company remain competitive and outperform industry peers.
The purpose of any business strategy is to lay out a plan of action for how your organization will get to where it needs to be.
- For employers, a thoughtful and well-executed people strategy constitutes a roadmap for how you can best use your people to accomplish business goals.
- For employees, a people strategy not only gives them focus and direction and empowers their professional growth, but also makes them feel valued and supported.
Remember: When you invest in your people, they become invested in your company’s success and become brand ambassadors for customers and prospective employees. They serve your customers well, produce high-quality work and stand by you in good times and bad. This loyalty and motivation can boost your business’s productivity and efficiency.
Top 5 benefits of a strong people strategy
A people strategy leads to better business outcomes.
1. Improve the likelihood, degree and speed of business success
Reduce your business’s exposure to certain people-related risks, such as:
- Widespread employee dissatisfaction and poor morale
- Low productivity and engagement, leading to diminished performance
- Improper levels of staffing
- Leadership gaps
- Poor communication
- High turnover
2. Develop critical competencies
Keep your workforce aligned with the evolving needs of your organization and remain competitive in today’s working landscape by preventing unexpected skills gaps. As examples, critical competencies to foster within your workforce include:
- Strategic thinking
- Decision-making capabilities
- Emotional intelligence
- Conflict resolution
- Strong communication skills
3. Enhance customer service
When employees are happy, they are more likely to become loyal brand advocates, feel greater dedication to their role and take more ownership of their work, all of which leads to better customer service. In turn, more customers are attracted to your organization.
4. Drive revenue-generating activities
Focusing on training and development along with collaboration and communication encourages employee productivity, idea sharing and innovation.
5. Deliver cost savings
Retain employees and avoid the costs associated with turnover and having to recruit and train new employees. This not only saves your company time, money and resources, but it also helps to avoid loss of institutional knowledge, decreased productivity and lower employee morale.
How do you develop and implement a people strategy?
Here’s what you can do to get on track with a successful people strategy.
1. Ensure that you have a solid HR infrastructure
A solid HR infrastructure powers your operations and serves as a launch point for everything your company does. Resources, policies, technology systems and procedures create the foundation and framework that are necessary to support and guide all HR activities – including your people strategy.
Consider the below components when reviewing your own HR infastructure:
- HR information systems (HRIS) or human capital management (HCM) software
- Talent management
- Benefits administration
- HR-related compliance
- Payroll systems
- Training and support systems
2. Foster a people-first culture
In addition to a solid HR infrastructure, the other main starting point for your organization is fostering a culture centered on prioritizing the wellbeing, growth and satisfaction of your people – known as a “people-first culture.” Your employees won’t buy into your people strategy if it feels inauthentic and they don’t truly believe your organization has their best interests at heart.
Having a people-first culture doesn’t mean giving employees incredible (and expensive) perks and everything else they could ever want without meaningful intent. Instead, it’s about:
- Balancing employee wellbeing with business goals
- Carefully evaluating how people-related decisions impact the workforce
- Recognizing each person’s value and potential to drive growth and innovation
- Promoting respect, open communication and genuine care for others
3. Evaluate your organizational needs and strengths
A people strategy isn’t a silo of objectives that impacts a few areas of HR operations – such as recruiting, benefits or training. It’s a living philosophy that touches every phase of your employee lifecycle.
Get started with a thoughtful, systematic approach to the people who power your business. When formulating your people strategy, consider your:
- Business size
- Business goals
- Budget
- Employees’ interests (more on this in a bit)
Your people strategy should be realistic, achievable and sustainable – something that employees enthusiastically embrace and that you can measure and maintain over time.
4. Collaborate with leadership
Without the agreement and support of leadership, your people strategy will fizzle out.
Facilitate a meeting with leadership during which they’re challenged to describe their perceptions of the workplace culture and employees. Prompt them to think about high-level characteristics of employees as well as more detailed observations, such as how meetings go, how colleagues interact or even whether employees arrive on time for work. It’s important that everyone gains as comprehensive a picture as possible of the workforce.
You can also use people analytics to inform the conversation, including figures on turnover and retention.
Also discuss:
- How do you meet your business goals?
- How do your employee contribute to achieving goals?
- What’s important to your company?
Without fail, leadership must:
- Agree on the company’s mission, vision and values, which ultimately serve as your people strategy’s guiding force
- Approve the plan for engagement, communication, performance monitoring and all programs that support employees across their tenure – from onboarding to ongoing career advancement.
These conversations should take place within an environment that’s conducive to open conversation and participation without judgement. Leaders must feel that they can be vulnerable with each other and share their honest thoughts.
5. Solicit employee input
Once you know what managers think, now you must understand what employees think – and determine if there are any gaps in perception between leadership and employees. This will balance and complete your view of the employee experience.
Plus, employees are much more likely to participate in a people strategy when they’re invited to help develop it and they feel that their opinion is valued.
Employee input can be obtained from surveys or focus groups. For tenured employees, you can also conduct stay interviews to find out why they have remained with the organization for so long. When possible, it can be helpful to ask employees the same or similar questions you asked leadership for consistency and ease of comparison.
When engaging with employees, practice transparency and let them know upfront that company leaders are interested in finding out information such as:
- Employees’ perception of the company and its culture
- What employees need to succeed
- How they feel they contribute to the company’s success
- How they want to be developed
- Which competencies are missing, in their view
- What else the company can do to improve the employee experience
Emphasize that this is a win-win for both the organization and employees – the company values them, wants to invest in them and will give them more opportunities to develop and grow. The more you involve employees in the process, the more they’ll trust you and share valuable feedback.
Otherwise, people tend to get nervous about getting called in for interviews with HR representatives. In the absence of any other communication, employees may worry that something negative is happening within the organization and that their jobs may be at risk.
6. Look at the numbers
Take a look at the key findings from your employee interviews, but don’t stop there. Understanding a broader set of data is a critical step in developing a people strategy that meets both employee and business goals.
Other metrics to track include:
- Highest and lowest performer: This can be subjective, but if you have an idea of the performance of both your best and worst workers, you’ll know which areas need to be nurtured and how to support the workforce your business needs.
- Level of engagement: Performance, attendance, participation rates and productivity are all good ways to assess the level of employee engagement, giving you a baseline to determine how happy or unhappy your workforce is.
- Tenure and turnover rates: Looking at the numbers, can you find any common thread that runs through those who stay or leave? Analyze why that might be.
7. Define your unique strategy
If you’re looking for an A-to-Z list of everything to put into a perfect strategy, you won’t find one – it doesn’t exist, because one size doesn’t fit all.
That’s good news! There’s not a standard formula. The best people strategy you can create for your business is the one made specifically for your business.
This is where you take all the information you’ve gathered so far and decide where to narrow your focus and:
- Define what you want to achieve in each area.
- Determine what success looks like at the individual, department and organizational level.
- Let employees know where they stand.
- Establish how you will measure success.
- Follow through on a routine schedule to monitor performance, provide supportive feedback, celebrate success and maintain momentum.
Don’t forget to be flexible. Even the best-laid plans may not hit every mark needed the first time. Try to get the optimal strategy in place, but don’t hesitate to pivot and make necessary changes as you go when called for.
8. Communicate the plan
Your employees want to succeed. They want to understand what they can do to help their company succeed, advance their careers and earn your respect. Communicating your people strategy early, clearly and regularly ensures buy-in and active involvement.
This could look like:
- All-hands discussions of any major goals.
- Manager-led discussions with smaller teams.
- Team trainings that focus on specific elements of the plans.
Even employee surveys and feedback loops are a good way to keep communications open and encourage two-way conversations about any challenges or roadblocks.
How a PEO can help
At this point, you understand the benefits of developing a people strategy but could still be tempted to put it off. We get it. You may already feel buried under so many time-consuming HR duties, you couldn’t possibly add anything else.
The good news? You don’t have to go it alone. Outsourcing these HR responsibilities to a professional employer organization (PEO) can:
- Give you a plug-and-play HR infrastructure and take care of the time-consuming, must-do tactical HR tasks for you.
- Maintain compliance.
- Assist in recruiting and talent acquisition.
- Provide training and development programs.
- Deliver performance management support.
- Offer you a wealth of additional tools and best-practices guidance to develop a comprehensive and meaningful people strategy and help to propel it forward.
Summing it all up
Alongside a solid HR infrastructure, a robust people strategy is instrumental to your company’s ability to attract, develop, train, engage and retain a talented workforce – all of which impacts goal achievement and the overall success of your workforce and business. A people strategy provides both employers and employees with focus and a concrete direction forward. It can also strengthen the relationship between both parties. Here, we’ve outlined the steps you should follow to get started. A PEO can provide assistance in implementing your HR infrastructure and people strategy.
Want to dive deeper into creating a people strategy that will transform your business? Download The ultimate people strategy playbook: Building a winning workforce.