As you’ve you no doubt realized, Human Resources (HR) is evolving within the organizational structure. Technology is changing the workforce, as evidenced by the tight labor market we’ve seen over the past few years. And this evolution shows no signs of slowing down. In fact, to deliver continued growth in the coming years, you need a human resources strategic plan.
When you consider what companies are concerned with, it can be summed up with three categories, technology, financial, and human resources. Are you keeping up with technology changes that allow your business to be more efficient? Are you profitable and generating positive cash flow to grow your business. And finally, do you have the right people in the right positions, and are you able to attract top talent to your company?
As an HR professional, you can argue that without a focus on HR, the other two categories won’t be successful either. That’s why you need a human resources strategic plan now more than ever. Aligning human resources goals with company goals may seem like a no brainer, but it hasn’t always been the case. SHRM has a great analogy, “Not so long ago, HR managers were like high school assistant principals―paper-pushers who kept the building running and tsk-tsked those who broke the rules.”
Today, HR can flex its muscles by developing a strategic plan that can impact the overall business plan. According to Digital HR Tech, when creating and implementing an HR strategy, there are a number of best practices to keep in mind.
- HR professionals should know the strategy and (at least to some extent) be involved in its creation – A strategy will only be effective if it is clearly communicated. Involvement in the creation of the strategy will help in the communication and create buy-in.
- Management buy-in and HR budget are critical enablers of strategy execution – An HR strategy can never be realized in isolation. Conditions are management buy-in, budget, skilled HR professionals, and appropriate digital technology.
- HR initiatives should be aligned with the HR strategy – The strategy is there for a reason: it should be followed. HR practices and initiatives should follow the strategy.
- Performance incentives should be directly connected with the execution of the strategy – the idea of contingent compensation is as old as HR itself. People will work harder if their goals and incentives are aligned.
- Strategies should be monitored and execution measured through KPIs – Strategy will never be effective without consistent implementation and monitoring of results. This is done through KPIs (metrics that measure strategic goals).
- 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 be – and sometimes should be – adapted to better fit the external environment.
So how can you build out a human resources strategic plan? Deloitte assembled a 10 step HR strategy framework in three areas that will better align and measure the strategic contribution of HR to the business strategy. Let’s take a look.
Define human capital value to understand how business value is created
Step 1: Understand the business strategy
Understand market forces, trends and the business strategy and identify their impact on the HR strategy and priorities required to execute the business strategy.
Step 2: Define HR strategy
Provide a roadmap for creating a unique competitive advantage by outlining how the organisation will leverage the organisation’s human capital to address business challenges and achieve business objectives.
Align HR policies, programs, and practices with the defined HR strategy
Step 3: Segment HR customers
Identify the critical workforce segments and tailor specific programs and services.
Step 4: Prioritize HR investments
Identify all HR projects and understand their expected costs, benefits, and primary focus to properly allocate scarce resources.
Step 5: Design HR services
Design and implement HR solutions that are critical to ensure the execution of the HR strategy for every phase of the workforce life cycle.
Deliver tangible value and track results
Step 6: Ensure right HR service delivery model
Think through people-related business challenges to design the right HR service delivery model.
Step 7: Establish right HR capabilities
Identify and build the advanced skills, competencies and capabilities required for HR to fulfill its strategic role.
Step 8: Improve HR operational excellence continuously
Design supporting tools, processes, and infrastructure to help the HR staff succeed.
Step 9: Build HR brand
Understand and communicate the value of HR to business leaders and key stakeholders.
Step 10: Measure the impact of HR products and services
Identify key performance measures to track the return on investment of HR products and services.
If you have questions on building out your company’s human resources strategic plan and would like to speak with one of our retained search consultants, send us a note. Our experience working with companies of all sizes, across industries, has helped us understand the need to match best practices with culture.