Why do you need a People Strategy?


There’s a lot of talk about the importance of businesses having a People Strategy yet, like anything in the world of business, it requires some investment in time and effort to produce one. It is worth that investment?

It’s a competitive world out there and with a robust People Strategy within your Business you can see improvements in productivity, employee engagement and reduced costs, thereby increasing profitability.

A people strategy created to complement business objectives, integrating company culture and values, has been shown to help reduce staff turnover and ensure that your workforce is fully committed to achieve your overall business objectives. Considering that a huge part of business income is spent on employees the ROI on that spend is crucial. For example, in the care sector, nearly 60% of income is spent on employees whilst around 15-30% is the norm. With those sort of numbers in play, isn’t it worth some time looking at how you work with your people?

It could also put your business on the map; setting the tone on how your business works and how it’s viewed by competitors, employees and potential candidates for employment.

A people strategy is also something that can and should be measured so it isn’t all fluffy and disconnected from the rest of your Business and should use the same metrics that your Board and Senior Management team will be used to. These measures can include:

  • Costs – recruiting / hiring / training / management / compliance / compensation
  • Quality of new hires – correct job descriptions (skills and ability) / compensation
  • Productivity of employees – setting goals and objectives / training
  • Retention – communication / benefits / training

Discussions with senior colleagues during the creation of the strategy promotes collaboration and debate on priorities and pain points for the business which your HR team will need to understand in order to support your business effectively.

Should you align your People Strategy to your business strategy?

This is a question that I hear over and over again and the HR literature is full of articles on the topic. Personally, I consider it to be somewhat of a strange question as the People Strategy should be part of your overall Business Strategy. Indeed, it’s not something that sits outside of it as it can’t be effective otherwise, in the same way as your commercial or manufacturing strategies must be integral parts of it. Your People Strategy can only be achieved when the business is completely clear on its top-level goals and must take into account the business context including current and future employees who will be working to achieve these goals. Done correctly, the purpose of a people strategy is to enable business goals to be achieved in the same way as any other departmental strategy that is put in place.

Focus and teamwork are key when formulating your People Strategy

For an HR professional, it’s quite easy to see what’s working and what needs improvement within a business. However, not everything is a winner unless it is supported and communicated effectively by senior leaders and cascaded down through the organisation.

Senior leaders need to understand how the People Strategy underpins every aspect of the business strategy and how it can therefore benefit the company as a whole. This is where I see many HR professionals fail in gaining credibility as – whilst many suggested initiatives will be abstractly relevant – they are rolled out at the wrong time or in the wrong context or worse, not linked specifically to the overall business strategy. In such cases conflicting priorities will muddy the waters causing frustration and delay for both HR and the departments they support. Obviously not the best use of time or budget!

There is no quick win situation and to have successful delivery takes time, commitment and resilience. Early discussions must resonate with senior leaders, who need to embrace the process to successfully communicate to their teams. Managers also need to understand where the business is going to be able to deliver the same consistent message, so employees understand what the strategy means to them and which exciting opportunities lay ahead for them and the business.

Strategy and change

The world in which we live is changing and changing fast and HR needs to be on top of their game! HR must plan for change; a challenge in itself. Your People Strategy may not be able to plan for every eventuality but together with a strong communication plan, you can be prepared to embrace the next steps.

There are many elements as to why change is unavoidable. We have an aging population meaning more generations working together, Brexit’s on the horizon, unemployment is at a record low, younger people have different expectations to earlier generations at work, to name just a few. Employers will need to adapt to those fundamental elements to be able to recruit and retain the best talent in a world that just doesn’t stop.
People have more choices than ever in where they work, how they work and their preferred lifestyle. These choices mean that self-employment is on the rise and many mention a greater need for flexibility. These factors must be taken into consideration when looking to attract the best candidates and lower turnover.

In some sectors such as the care sector, there is a real struggle to attract and retain people. There are many pressures on workers, including expected high standards of care and service delivery, high expectations of families for their elders and comparatively low wages which make it very hard for workers day to day. Engaging these people through a good quality people strategy that will make a difference to them, and to the organisation as a result, is surely not a hard decision.

Or is it…?

If you need help and advice in creating the best People strategy for your business, please contact us or why not give us a call on 01494 702 701? We’d love to hear from you!

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