HR Strategy

First published on Monday, April 3, 2023

Last updated on Friday, June 7, 2024

As an employer, the success of your company is reliant on many factors. Ranging from recruitment, how you develop your employee's skills and how much you pay them.

Creating a HR strategy is a good way of ensuring you're doing all you can to grow your company and make it a success. Not doing so can mean both you, your senior staff and your employees are working out of alignment.

In this guide, we'll discuss what a HR strategy is, the benefits they bring, and common examples.

What is an HR Strategy?

Human resource strategy provides a framework that links both people management and development practices to business goals and outcomes. It's a pre-determined plan to overcome business challenges by using a people-centric approach.

HR strategy includes all key areas of HR within a company, such as:

Creating a HR strategy requires the involvement of your human resources department. So you should understand why it's important for your business moving forwards.

Why is HR Strategy Important?

You should never underestimate the importance of strategic human resource management to your company. HR strategy plays a big part in bridging the gap between employee satisfaction and organisational success.

A solid HR strategy helps an employer in reaching their business objectives whilst also aligning with their values. In essence, without a strategy in place it's more difficult to reach pre-determined company goals.

What's the Difference Between Human Capital Management (HCM) and HR Strategy?

There's no real difference between human capital management and HR strategy. Under human capital management, employees are treated as assets rather than costs.

If anything, human capital management helps to complement HR strategies. It adopts an integrated and strategic approach to managing your employees, which should be the concern of all major stakeholders in your business - not just HR leaders.

Human capital management can help strengthen your strategic human resource management due to the following:

  • Finds the links between what employees do in their job, their value and the overall strategic framework of the business.
  • Establishes a pattern between HR strategies and overall business success.
  • Provides clear guidance on what to measure, how to measure and how to report the outcomes of your HR strategy.
  • Shows the importance of HR professionals as business partners.

As well as human capital being an important part of your HR, workforce planning is crucial

How Important is Workforce Planning in HR Strategy?

Workplace planning is vitally important to a successful HR strategy. It's the process in which HR leaders in a company predict your future workforce needs.

For example, you may have secured a new project that requires your employees to have a certain set of skills. You'll have to bear this in mind when looking to recruit candidates.

You should always include workforce planning within your HR strategy. There are five types that you should be aware of:

  • Workforce optimisation: How the workforce is fully optimised to improve capacity, meaning the task or project is completed.
  • Working scheduling optimisation: How employee schedules are optimised to ensure the business needs are met.
  • Operational workforce planning: How you plan for the correct number of employees needed for a certain project to meet business targets.
  • Organisation modelling and transformation management: How resources are managed following major changes to the company. For example merger or reduction in workforce.
  • Strategic workforce planning: Also known as strategic planning, this is where the implications of the strategy of your business will impact your employees.

As an employer, it's important you become familiar with what benefits come with a good HR strategy.

What are the Benefits of Strategic Human Resources Management?

Having streamlined and strategic HR processes in your company comes with a range of benefits. So it's important you understand each one.

Let's discuss each benefit in more detail:

Helps Prepare You for the Future

HR planning will help to avoid problems in the future. By providing both managers and employees with all the tools they need to succeed, future problems regarding development and performance won't transpire.

Workforce and HR planning will mean you don't over or under-hire for your company, meaning most staffing problems will be avoided.

Increases Employee Retention

A successful business strategy will help to reduce both employee turnover and hiring costs. This is because you'll be able to understand how many employees you need to keep productivity levels high.

The more productive your employees are, the more likely they are to stay working for your company. Meaning the money you'd spend on hiring replacements can be spent in other areas to help your business grow.

Helps the Recruitment Process

HR strategies can help to identify the high performers in your company. So this allows employers to create hiring criteria solely designed to recruit candidates best suited to fit your company culture.

Having the correct hiring criteria will lead to better interviews and hiring rates.

Increases Engagement and Productivity

Having a successful HR strategy is key to improving the employee experience within your company. It goes a long way in improving the work environment and culture of your employees.

If your employees feel that you're trying to focus on the HR in the company, they're more likely to feel engaged.

Examples of HR Strategies

There isn't just one example of HR strategy that you can use within your company, there are multiple. And as an employer, it's important you analyse each of them before deciding which ones you should use.

Let's discuss them in more detail:

Hiring Purposefully

Hiring can prove to be difficult for employers, and there could be a temptation to hire the wrong employees if you're struggling to find the right one. But hiring with purpose can help you avoid the process dragging on.

Make sure that your recruitment process is in line with your company goals. For example when asking about their working style, their answer needs to match with your company culture.

Providing a Good Onboarding Experience

Another example of a HR strategy is to ensure you provide a good onboarding experiencefor all new starters. Ensure each onboarding process is unique to the employee and their role.

Provide online learning resources, meetings with important members of staff and do all you can to make any new starters feel comfortable.

Communicate Frequently

An easy HR strategy you can promote within your company is frequent communication. As an employer you should communicate any changes to the business, including rules and policies to your employees.

It's important you listen to any feedback your employees may have and make any changes on the back of this. Promoting transparency and open discussion within your company should be one of your main priorities.

Carry Out SWOT Analysis

Some companies choose to carry out SWOT (strengths, weaknesses, opportunities, and threats) analysis on their current HR strategy. This process allows you to find any areas of improvement within your current strategy and implement any changes on the back of the analysis.

This process will allow you to find any new performance management resources required to increase the engagement and productivity of your workforce.

Focus on Employee Wellbeing

The physical and mental wellbeing of your employees should never be ignored. You may have some employees who are suffering from workplace stress due to unmanageable workloads or deadlines.

A strategic plan to counteract this is to provide all your employees with tools and resources to help them if required. For example an EAP or wellbeing questionnaire.

Diversity and Equality

Another example of a HR strategy is to ensure your workforce is diverse and equal. This includes during the hiring process and throughout employment.

You must ensure there are equal opportunities for all your employees, no matter their age, background, race or sexuality. Not doing so may leave you liable to claims in the future, so this HR strategy should never be ignored.

Offer Competitive Salaries

Offering competitive salaries is an important HR strategy. Feeling underpaid is a common reason why employees choose to look for new employment.

Employees who are paid what they deserve are more likely to feel valued, secure and motivated. Leading to higher retention and lower turnover rates. If you're unsure about how much you should be paying your staff, regularly undertake some industry research.

How to Create a Successful HR Strategy

There are steps you should follow to create an effective HR strategy, all of which are as important as each other.

Having successful HR processes within your strategy will help ensure its ongoing success within your business. So let's discuss them in more detail:

Create a Plan

Spend time creating a detailed plan for how you'll create your HR strategy. Included within the plan should be timeframes for implementation, important stakeholders you'll communicate with, and any external resources required.

Focus on Employee Development

Within your plan, you should focus on the skill development of your employees. This can be done by regularly reviewing employee performance and setting development goals for them moving forwards.

The development of your employees is vitally important to the long-term success of your company. Failure to do so can lead to your staff looking for new employment elsewhere.

It's important to remember that the goals you set must be achievable and manageable. Not doing so will lead to an overall decrease in employee experience.

Establish Clear and Achievable HR Goals

You should work with your human resource department and senior staff to create clear and achievable HR goals. These goals should be in line with your company values.

The HR goals you establish must be able to increase business performance. For example, carrying out six-monthly employee surveys can go a long way in improving company cultures. This can have a clear impact on retaining your best employees and attracting top talent.

Make Sure the Benefits You Offer are Relevant

Assess your talent strategy and ensure the compensation scheme you offer is correct. Regularly audit your pay, benefits and any bonuses you provide to your employees. This can be done by undertaking industry research. Known as compensation planning, this should be carried out on a six-monthly or annual basis.

If your employees don't feel they're receiving competitive salaries, then they're more likely to seek employment elsewhere.

Involve Key Stakeholders

When creating your HR strategy, include important stakeholders. Any HR professionals, your HR department and senior staff should be involved in the creation of your strategy.

But you should also include your employees within this. If the strategy involves any changes to their daily working lives, you should make them aware. Failure to do so can lead to an increase in employee unhappiness, a dip in morale and them looking for new employment.

Ensure it Matches with Your Business Goals

The HR strategy you create must align with the overall business strategy and goals. The goals of your business play a vital role in its success. So if your business goals focus on the development of your employees, then the plan you create should do. Not ensuring this may mean your HR strategy isn't a success moving forwards.

Should you Monitor the Progress of Your Strategy?

Yes, you should monitor the progress of your strategy. This can be done via key performance indicators (KPI's). You should create clear criteria for how you'll measure successful strategy execution.

There's no point in creating a strategic HR plan if you aren't going to track progress. Both you and your employees need to be aware of how the plan is going and what areas need improvement.

Get Advice on HR Strategy with BrightHR

How successful your company is depends on many factors. Such as recruitment, how you develop your employee's skills and how much you pay your staff.

A HR strategy is the best plan to ensure your company is growing and becoming successful. Not having one can mean both you, your senior staff and employees are working out of alignment.

If you need any advice on HR strategy, we are on hand to help. Our BrightAdvice helpline. Give our friendly and helpful team a call on 0800 783 2806.


Jenny Marsden

Associate Director of Service

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