When it comes to strategic planning, most companies will complement their business strategy with financial modelling and budgets, which is exactly what they should do. But very few emerging and mid-scale companies invest in a detailed HR strategy and workforce plan.
Part of the problem is that this is a specialised skill, and not one most executives or HR people have experience in. Related to this is the tendency to kick the can down the road and deal with the people stuff on an as-needs basis – driven largely by a focus on people being a cost centre rather than a strategic investment..
But no matter what business you are in, it’s people who are going to drive performance and get you from A to B (or not) – there’s no point building the world’s best race car if you haven’t got the right people to drive it and man your pit-crew.
So what makes a good HR Strategy?
More than just identifying key skills you might need to execute your strategic plan, your HR strategy needs to look more broadly at how you attract, recruit, develop and retain the talent you need into the future. Attention also needs to be put into progressing the systems and processes required to cope with growth (and the inevitable expansion in headcount) and drive performance from your team.
A smart HR strategy will focus on the following elements:
- Organisational structuring together with a costed workforce plan
- Succession planning – map out how to reduce principal dependency and create pathways for rising stars
- Executive recruitment – The quality of your recruitment process and the leaders you recruit has the biggest impact on business performance
- Leadership development – aligned to your succession plans, training and development plans help turn managers and rising stars into great leaders
- Performance management – creating a high performance environment relies on the development of clear KPIs, scorecards, communication rhythms and feedback systems
- Remuneration and incentives – it is critical that growing companies embed a robust remuneration approach and apply incentive schemes that are linked to simple, important and measurable KPIs
- Employer branding – defining your employer value proposition (EVP) and leveraging your brand in the market is important to building talent pools for the future
- Leveraging technology – selecting and implementing the right HR systems and technology stack will help you cut down on administrative waste and provide a more user-friendly experience for employees
- Managing risk – complying with employment and OHS laws and proactively managing your contingency plans reduces risks that can otherwise distract the business.
- Culture – a great culture is the result of implementing other elements of your HR strategy, but is reinforced through clear values, standards and habits, championed by your leadership team
Together these elements make up a High Performance Framework to drive your business forward, noting it’s impossible to do everything at once. The key here is to prioritise and build out your framework over time, mindful of what will have most impact on achieving your strategy and workforce plan.