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What is an HR strategy?

The goal of a strategic HR plan is to utilize the support of HR professionals to create company policies and programs that support the organization’s overall business strategies. Think of it as a calculated approach for businesses to manage employees that supports the organization’s overall mission, values, and goals. A few of the most common programs included in an HR strategy are:

  • Hiring and Onboarding
  • Employee training and development
  • Performance Management
  • Employee relations/workplace culture
  • Compensation and Benefits

These are just a few examples. It’s essential to remember that your particular business’ HR strategy may vary depending on your company’s mission and goals. Additionally, some flexibility is necessary as a company’s HR strategy may change over time as employee needs and the future needs of the business change.

Why is HR strategy important?

There are many reasons why a strategic approach to human resources and people management is advantageous. Simply put, implementing an HR strategy is essential in helping any company achieve its goals. But a few key areas come into play when considering how much of an impact having an organized HR plan can have for an organization.

  • Reduce turnover and create a more positive company culture – with an organized and thoughtful approach to designing compensation and benefits packages that attract and help retain top talent.
  • Improve employee performance – HR professionals can help to develop systems that track and improve employee performance by identifying the developmental needs of their workforce. Employees who see how committed their organization is to their development and well-being are more likely to feel empowered, confident, and appreciated, and that equates to increased productivity and a healthier bottom line.
  • Improved employee engagement and productivity – it’s been proven that happy and fulfilled employees are more productive individuals and become loyal brand ambassadors. It’s a winning combination for everyone.
  • It helps to identify any gaps in compliance on a state and federal level – from onboarding to payroll and benefits; any organization needs to maintain compliance.

How to create a human resource strategy

Every business is different, with its own unique set of goals and challenges. But when creating a human resource strategy, all businesses should consider using a SWOT analysis technique. What exactly is SWOT? It’s a systematic approach to help businesses analyze what’s happening in and outside of their organization in the following four areas:

Strengths – What does your organization do well, and what makes you unique? What do others see as your strengths?

Weaknesses – Where does your organization have opportunities for growth or improvement? What resources do you need in comparison to competitors?

Opportunities – How can you turn your strengths into opportunities? What new trends or chances are you open to?

Threats – What is your competition doing? What weaknesses leave your business exposed and at risk?

Assess Your Current Workforce

Conduct a skills inventory of the current staff. Assessing such things as their work performance, resumes, continuing education history, and project history of individual employees as well as the collective knowledge base of the entire workforce, will help to know where you’re starting from and what you’re working with. It will also help to give valuable insight into individuals’ goals for development and willingness to assume greater responsibility.

Create Employee Development Plans

While not all employees may have the ability or desire to progress and take on additional responsibilities, others, the star performers, continuously outperform and stand out from the rest that will want to continue to grow, develop, and advance within the organization. HR managers can help them reach their career goals and advance by developing a successful employee development plan. A strong emphasis on employee development can produce long-term, tangible benefits that give any business the completive edge to retaining top talent and attracting new talent.

Forecast the Demand & Supply

The first step in forecasting demand and supply is to confirm the number of current employees while considering their skill set or knowledge base, role within the organization, pay, and potential for advancement. Because forecasting supply and demand from an HR standpoint requires keeping the organization’s long-term goals for the future in mind, it’s important to keep a finger on the pulse of current employment trends and take into consideration what HR resources will be needed to maintain the correct number of people in the right place, at the right time in the foreseeable future. Other factors to consider when forecasting supply and demand include:

  • Turnover and absenteeism
  • Retirement
  • Growth and expansion of the business
  • Resignations
  • Employee productivity

There are several HR demand and supply forecasting techniques, such as The Markov model, managerial analysis, workload analysis, and the Delphi technique, just to name a few. Choosing which approach is right for your business will take time, effort, research, and thoughtful consideration. Accurate HR demand and supply forecasting are essential to the success of your business.

Create a Succession Plan

When creating a good succession plan, the goal is to nurture and develop talent within the organization to avoid any disruptions should planned or unplanned changes with key employees in a critical position arise, whether as a promotion, change in department, or leaving the organization altogether.

With a thoughtful approach, creating a succession plan will ensure that your business is prepared to adjust to any HR changes and circles back around to establishing a positive work culture and employee engagement. Succession planning gives high-performing individuals a clear path to advancement.

Perform a GAP Analysis

Effectively executing a GAP analysis will help you to determine which resources your organization currently has and which ones will be needed in the future. There are many other contributing factors to consider here, such as business goals, budgets, and human capital; however, with gap analysis, you’ll want to hone in on these specific areas:

  • Employee handbook – Does your business have one, and if so, when was it last updated?
  • Job Descriptions – Do they effectively communicate the expectations of each role, and are they up to date?
  • Training Programs – Does your organization offer additional training opportunities or have an organized employee training and development program? Do your employees understand their role and have the tools to perform their day-to-day job responsibilities effectively?
  • Health Benefits and Sick Time – Federal and state laws regarding health care benefits and paid sick leave are routinely updated. Is your organization in compliance with the Affordable Care Act? Check into any updates to federal and state laws regularly to ensure compliance.

Decide how to increase resources for the future

As your brand awareness expands and your business grows, so will the need to hire additional employees to meet the growing demand. To find the best talent to meet your business goals, knowing precisely what desired traits and skill sets your ideal candidates need is important. It’s important to ask a few of the following questions to be prepared when searching for the right candidate:

  • Will they need to have mastered their craft before joining your team, or is your organization open to hiring someone with a great work ethic but needing additional training to fine-tune skills?
  • Do you already have your ideal candidate that can be promoted from within the organization? If so, are you prepared to fill that vacancy?
  • Are there gaps in policies, procedures, benefits, and or compensation that may not meet the expectations of the ideal candidate?
  • What is our current reality? Do we have a good company culture, or must we make some adjustments before adding to the team?

Proceed with the Application Process

Now that you’ve identified the skills required of your ideal candidate, it’s important to proceed with a formal application process, whether you’re hiring from within or recruiting from the outside. Creating the right ad and recruiting the most qualified talent has always been challenging. Implement your HR strategy by:

  • First recruiting applicants
  • Conducting interviews and narrowing down top candidates
  • Formal offer letter
  • Formal onboarding process to include reference and background checks
  • Re-evaluating your approach regularly is important to the continued success of the businesses HR function

What are the benefits of creating HR strategies?

What better way to ensure the success and longevity of your brand than by implementing a strategic HR plan that will provide a clear vision of the company’s future goals and how to achieve them? Read on for a closer look at just a few of the rewards.

Forecasting talent requirements

Gain a competitive advantage by forecasting your current and future employees’ needs in the present and the future.

Non-compliance costs

Human resource management is brimming with administrative duties and paperwork. Many of those duties are time-consuming due to the importance of risk management. Seeing to it that compliance for a small business or a corporation is maintained is no small feat. From payroll and benefits to employee performance management, having a rock-solid HR strategic plan will help mitigate human error and put the organization at risk for noncompliance, fines, or penalties.

Happy employees are more productive

Happiness fuels motivation. It’s a fact. Happy employees are as much as 20% more productive at work than unhappy ones. Creating and maintaining a winning HR strategy plays an important role in developing an engaged and motivated team.


Collectively, employee engagement and retention go hand in hand. When you’ve found the right people with the right skills, it’s vital to the future success of your organization to keep them happy and motivated. Consider including career development opportunities, training, and formal performance recognition programs in your HR strategy.

Continuous Improvement

We all know, or at least we should, that there is always room for improvement. Without a strategic plan, how will you measure your progress or that of your employees? Having an HR strategy plan in place can help HR managers to measure employee turnover and why it’s happening, employee engagement, training and development opportunities, and improve the overall success rate of the organization. If your HR department continually monitors these areas, your organization is much more likely to handle any situation swiftly and efficiently.