Human Resource Strategy is a long-term plan created to achieve objectives in the field of HR and human capital management for the success and development of the organization.
An HR plan gets the employees ready to execute the business strategy and goals. It helps you, as an HR manager, prepare your current staff and anticipate what talent you’ll need to add in the future. It preps your company for employee turnover and other managers for making future hiring decisions more strategically. A good HR plan should also include a succession plan, so you can minimize disruptions to your business should there be a change in management or structure. Read this blog for all you need to know about HR Strategy.
If you think it’s important to have a business plan then you need a human resources (HR) plan, too. It’s just as critical.
What is Human Resource Strategy?
A Human Resource Strategy is a company’s overall plan for managing its human capital and to align it with its business activities. The HR strategy sets a direction for all key areas of HR, including hiring, performance appraisal, development, and compensation.
An HR strategy has a set of characteristics:
- It requires an analysis of the organization and the external environment.
- It takes longer than one year to implement.
- It shapes the character and direction of all the HR Management activities
- Helps in the deployment and allocation of organizational resources (i.e. money, time, personnel)
- Is revised on a yearly basis.
- It is number-driven.
- It results in a specific behavior.
3 Pillars of a Successful HR Strategy
1. Legal requirements
When onboarding an employee, it’s important that you follow and fulfill all legal requirements to ensure that you protect the business and the employee. For instance, every full-time employee should fill out an IRS W-4 form and I-9 form, another important legal requirement is worker’s compensation.
2. Employee engagement
Did you know that only 33 percent of employees in the United States are engaged in their jobs, according to Gallup’s “2017 State of the American Workplace” report? Employee engagement as a whole increased by only 3 percent from 2012 to 2016, according to the aforementioned report.
Employee engagement is critical to a company’s success. After all, an engaged employee is a productive employee. To increase employee engagement, bring the following points into your culture and HR strategy:
- Gamification: Incorporate gamification into employee activities, such as achievement-tracking and peer competition.
- Incentives: Financial and non-financial incentives, such as rewards and perks, give employees something to work toward. Besides, they reinforce attitudes and behaviors that will help the company to succeed.
- Employee Surveys: Conducting surveys regularly lets employees know that their voice is being heard and valued.
3. Performance management system
To make goal-setting successful, you need to have a performance tracking system in place. Without an advanced performance management system, it will be difficult for employees to know their progress and stay motivated in reaching their goals.
Not to mention, keeping track manually can get tiresome and is less reliable. If you haven’t yet, invest in a performance management system that makes it easy for employees and managers to track and measure progress throughout the year.
If you have trouble getting buy-in from decision-makers, ask for a free 30-day trial of the product you like most. When your trial is up, you can show higher-ups the benefits, rather than just telling.
6 HR strategy best practices
When creating and implementing an HR strategy, there are several best practices to keep in mind. Get used to them if you want to know about HR Strategy.
- HR professionals should know the strategy and be involved in its process– A strategy will only be effective if it is communicated. Involvement in the creation of the strategy will help in communication and create buy-in.
- The HR budget is the critical enabler of any strategy execution — An HR strategy can never be realized in isolation. Conditions are management budget, skilled HR professionals, and appropriate technology.
- HR manager’s initiatives should be aligned with the HR strategy — To know about the HR strategy, know that the strategy is there for a reason and it should be followed. HR practices and initiatives should follow the strategy.
- Performance incentives should be connected with the execution of the goals– The idea of incentives or compensation is as old as HR itself. People will work harder if their goals and incentives are aligned.
- Strategies should be monitored & execution measured through KPIs — A strategy will never be effective without the consistent implementation of results. This is done through different KPIs (metrics that measure strategic goals)
- A strategy is a long-term plan — A strategy is, by definition, long-term. This doesn’t mean it isn’t subject to change. A strategy can and should be adapted to better fit the external environment.
How to Create an HR Strategy?
Here are 3 critical steps to creating an effective HR plan for your company.
1. Assess your current workforce
Your first step in strategic HR planning is to identify your current employees’ knowledge, skills, and abilities. This will include evaluating your employees’ strengths, education levels, and additional training or certifications he/she has completed.
Your personnel files will already contain a wealth of information needed to help monitor your employees’ talents and skills, such as:
- Continuing education history
- Performance appraisals
- Projects completed
2. Create a succession plan
With business growth comes change. It’s inevitable. Whether it’s a shift in the executive team or a reorganization of departments, you need to be prepared. A succession plan will help you minimize disruption by identifying critical points in your business, and the employees who have the skills to immediately resolve these points.
You can choose to involve employees directly in creating your succession plan. This would mean having conversations with all of your employees to find out what their career goals are, and where they see themselves in the future.
3. Perform a gap analysis
A gap analysis helps you identify what resources your organization already has and what resources you’ll need in the future. When performing a gap analysis, you’ll assess the HR practices and infrastructure to determine where your company or employee is falling short.
When conducting a gap analysis, do take a look at your:
- Job descriptions — Do they match the expectations you currently have for the employees? Outline all the necessary skills and requirements.
- Training programs — Are your employees being prepared for their roles in an organized way and according to business needs?
- Health benefits — Are you providing what is required by the Affordable Care Act (ACA) and also meeting the needs of your employees?
- Sick days — New paid sick day standards are emerging across the corporate world. Check the current sick day’s laws to be sure you comply.
- Business performance — If revenue is climbing, it may make sense to up the contributions to your employees’ retirement accounts or award more days of PTO, which will add value to the total rewards package.
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