What is a human resources strategy?
A human resource strategy is the plan that a business creates to manage its human capital in a way that aligns with the company’s overall mission, goals and future aspirations. It addresses all essential areas of human resources (HR), including searching for and training employees, organizing benefits, appraising performance and providing development opportunities. An effective human resources policy can help maintain high levels of employee satisfaction and encourage referrals from happy team members as well as interest new recruits.
Human resource strategies are designed to improve transparency and govern workplace behaviors. When a standard is created that employees can easily access and compare their performance to, accountability is raised and overall productivity improves. In addition to ensuring a safe and positive work environment, HR policies help a company confirm it’s compliant with local and federal regulations concerning employee treatment.
Why is it important to have a human resources strategy in place?
Having an HR strategy is important because it determines how HR processes work in your company and ensures they are in alignment with the organization’s goals. HR practices can increase employee productivity, positively impact employee learning and improve a business’s overall performance. A successful human resources strategy can:
- Improve employee and supervisor relations
- Hasten the speed of HR policy implementation
- Foster an environment conducive to your company’s culture and encourage strong workplace ethics
- Inspire fair treatment of and cooperation between team members regardless of age, sex or background
- Dampen a high turnover rate by improving employee loyalty
How to create a human resources strategy
Follow these steps to create an effective human resources strategy:
1. Understand your organization’s objectives
A good human resources strategy is closely linked to organizational goals, so it’s important to first understand the business’s objectives and mission. Work closely with management or executives to articulate the company’s short- and long-term goals for growth.
2. Evaluate your current capabilities
Perform a skills inventory for every employee to determine which individuals are skilled in specific areas. This may help you better understand how your employees can contribute to the company’s main objectives. It also helps you recognize your company’s strengths, which you can use to craft a more specific and effective HR strategy.
3. Perform a SWOT analysis
After evaluating individual employees, conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis, which is a strategic planning technique used to identify areas in which ways you can help the company grow. You can use this analysis to leverage your company’s strengths in order to capitalize on opportunities in the market. Additionally, by identifying threats and weaknesses, you can come up with a plan to overcome them or minimize their impact.
4. Analyze your capabilities in comparison with SWOT analysis
Evaluate your company’s—and, specifically, your team’s—ability to help you capitalize on opportunities and effectively manage threats. Identify ways that your company could better prepare employees to serve the goals of the organization.
5. Assess your future HR needs
Next, evaluate what you will need from employees in the future to capitalize on opportunities, minimize threats and achieve company goals. You should be able to determine:
- Which new jobs you will need to fill
- Which skills current employees will need to obtain to fill the new jobs
- Whether you’re sufficiently utilizing the abilities of your current employees
- Whether your current HR professionals and the hiring practices they use can accommodate the necessary growth
6. Evaluate whether additional tools are necessary
Work with the information technology (IT) department to do an audit of your company’s hardware and software. Determine whether there are tools available that would enable your employees to do their jobs more effectively. Procedures such as scheduling, project management and goal setting can help a team coordinate their efforts and improve productivity. There are numerous productivity tools available to teams, such as:
- Recruitment tools: Finding the right candidates can be a breeze with modern platforms that connect human resources managers with companies seeking to boost their practices and outsource new talent. Companies like Bambee offer all-inclusive HR packages for businesses that need help creating and implementing a human resource management strategy.
- Employee recognition platforms: Similar to social media, these apps provide employees with an opportunity to be applauded for their achievements within the workforce, and can offer an easy way for team members to communicate via text. Check out software such as Bonusly if you want to boost communication and morale.
- Enjoy light-speed communication across teams and platforms: With programs such as popular Slack, employees can instantly message each other using a wide range of platforms and share the projects they’re working on. Conversations and documents are easily searchable, improving productivity and reducing the need for team meetings.
- Identify top candidates and verify their skills online: Save time reading resumes by screening new recruits before any paperwork needs to be completed by your HR department and find the most highly trained talent to join your team. Reduce the number of underqualified applicants with programs such as Plum.io, which creates standardized tests for individuals to complete during the application process.
- Use time management software to streamline HR procedures: Implement a digital time clock to make it easier for your human resources team to manage time records and improve attendance. The Hubworks program combines an online timekeeping platform with POS and inventory systems, among other features.
7. Implement your strategy
After you’ve finished your analysis and completed an assessment of what you need, it’s time to start expanding your workforce and developing the skills of your current employees to better meet the needs of the company. Implement your HR strategy by doing the following:
- Recruiting applicants: Start searching for candidates who have the skills you identified during the analysis phase.
- Organizing a selection process: Interviewing and identifying the right candidates are essential components of the process. You’ll need to select relevant questions and tests to evaluate candidates and their abilities.
- Hiring candidates: After completing the necessary background checks, extend offers to the most qualified candidates.
- Designing an onboarding program: An employee onboarding program can improve retention and help new hires feel confident in their roles more quickly.
8. Evaluate your process
Decide on a time line after which you’ll review your progress, identify areas for improvement and evaluate whether the changes are helping further your company’s growth. If you determine that your strategy isn’t getting you closer to your objectives, identify ways you could make adjustments. Human resources strategies take at least one year to implement, because a company needs time to track the success of new policies. Metrics that can help you quantify your workforce’s performance include:
- Employee retention rate
- Overall company growth
- Feedback from managers, employees and clients
- Financial performance index
- Employee satisfaction surveys
- Goal-based metrics
Best practices for human resources strategies
Use these best practices for implementing human resources strategies in your organization:
- HR professionals must be involved: The HR professional in your organization should understand and, ideally, be involved in the creation of your strategy.
- HR practices should align with strategy: After you create a plan, evaluate all HR initiatives and practices to ensure they’re aligned with your new strategy.
- Strategies should be measured: Monitor and measure the results of your HR strategies to ensure the key performance indicators (KPIs) you’re tracking are aligned with your goals.
- Goals and incentives should be aligned with strategy: Make sure your goals and performance incentives are aligned with the execution of the strategy.
- Management must be in agreement: Your HR strategy must have the support of your management team as well as an appropriate budget and any technology it needs to succeed.
FAQs about human resources strategies
What are the four basic functions of human resource management?
The four basic functions of human resource management (HRM) are:
- Acquisition of human resources: This includes recruiting candidates and selecting the right person based on a careful evaluation process. This can be implemented using internal recruitment, outside sources or by outsourcing to a staffing company.
- Development of human resource strategies: This stage includes training and developing employees. Ongoing educational programs can encourage employee and overall company growth.
- Motivation: After training employees, the HR manager should encourage them to perform at their best by providing compensation and benefits. Frequent casual team gatherings can improve company morale and motivation, and provide a fun space to recognize your staff for their hard work and contributions to the company.
- Maintenance: The final phase is where HR creates a safe and healthy workplace by ensuring policies are adhered to and employees who violate policies are held accountable for their actions.
What are the primary HR activities?
HR activities fall under five primary functions:
- Safety and health
- Employee and labor relations
What are some examples of HR strategies?
HR strategies could include:
- Competitive salaries
- Comprehensive benefits packages
- Focus on employee well-being
- Promotional opportunities
- Dedication to communication
- Growth opportunities such as ongoing education
- Socially responsible hiring and employee retention policies
Do HR teams decide the amount of compensation an employee receives?
Ultimately, an individual employee’s pay will be determined by their manager and other supervisors. An employee’s performance is certainly a factor in their pay, therefore, a human relations manager may have some influence on their salary. Keep in mind that each company has its own policies regarding employee compensation.
How long should an HR policy be?
Depending on factors such as the size of the company, security practices required by the industry and the number of job types within the organization, the size of a policy can vary greatly. Components of a basic HR policy may include:
- Meal and break guidelines
- Policies regarding interpersonal relationships and incidents such as sexual harassment
- Disciplinary actions and guidance regarding anti-harassment and antidiscrimination laws
- An employee handbook