This guide is part of a progression set comprised of Core, Advanced, and Emerging HR Strategy practices.

What it is

An HR Strategy sets business-based human resource (HR) tactics that will constitute a comprehensive multi-year approach to managing the HR function's structure, governance, programs, policies, and practices. It is a basic assessment of how HR will directly and indirectly contribute to achieving business objectives and goals. 

The process begins with a review of the primary business objectives and goals for a given timeframe. It then engages leadership and identifies the external (to the company) and internal pressures and forces that are projected to act as either barriers or enablers to achieving those objectives. It articulates how the HR function responds to impact both the business goals and potential challenges to meeting them, weaving all of that information together into a base strategy that defines the HR direction and strategies to be employed to meet those goals and objectives.   

Leading practice calls for HR leadership to participate in the corporate strategic planning process, with HR having a fully integrated section that outlines how it will impact the meeting of business goals. A separate and formal HR plan might be necessary to provide greater detail to guide HR teams in their pursuit of supporting corporate, functional, and business unit goals. In either case, a plan should offer sufficient detail to guide comprehensive goal setting and be directly linked to key business objectives.

Why use it

An HR Strategy serves as a guide to aligning HR plans, practices, initiatives, and programs with business needs. It ensures that the HR organization is dynamically prepared to support the larger organization and that all HR activities and initiatives are "tuned" to meet the needs and challenges the company could face. It engages HR leadership in detailed assessments of the organization's business needs and the existing internal barriers and stimuli to success and clarifies the full range of external business- and talent-related issues and pressures that can impact or support achieving corporate business and talent goals. It further serves as a method to engage functional leadership in HR governance and discuss HR practices, programs, and capabilities that need to be developed or enhanced, and how those address and align with business challenges and needs. Finally, it guides the HR team regarding its multiple priorities and the rationale and business grounding for each of its goals and objectives.

Outcomes

At its most basic level, a quality HR strategy provides outcomes designed to provide guidance and direction to the HR function throughout the planning period (typically 1-3 years into the future). It establishes an essential but well-defined roadmap for the HR function that encompasses capabilities and practices related to topics ranging from talent acquisition to employee development to engagement and retention, ensuring that the company's human capital aligns with its overall goals. It also ensures that HR goals are articulated and formulated precisely, providing HR teams with direction on how their efforts will contribute to the enterprise's talent and business objectives. These goals are designed to be SMART (Specific, Measurable, Achievable, Relevant, and Time-bound), ensuring they can be effectively tracked and measured. This enables HR to set clear performance expectations and benchmarks for its team. It communicates the added value HR will produce for the managers and the organization as they pursue business success.

The resulting HR strategy can be intricately woven into the organization's broader business-aligned strategy and goals. Such alignment ensures that HR initiatives align with and directly contribute to the company's overarching objectives, whether related to revenue growth, cost efficiency, or customer satisfaction. The corporate strategic plan can effectively and comprehensively address all its operations through such activity for a more robust and impactful plan. Lastly, it provides a robust strategy governance model established to monitor and control the execution of the HR strategy. The model outlines the responsibilities of various stakeholders, engages them in the planning and monitoring of the function’s performance, and creates a feedback loop to ensure continuous improvement. This governance framework is instrumental in thoroughly engaging leadership and gaining ownership over HR initiatives while maintaining the business relevance and effectiveness of the HR strategy over time.

Developing and deploying core HR strategy practices yields a simple yet elegant package of HR objectives designed to impact the organization’s business strategy. They generate a defendable and easily communicated set of priorities that can be traced directly to leadership’s imperatives and inputs as a key driver of future success.

Practice guides at this level

Understanding business strategies to align the HR direction.

Building an understanding of the key business strategies and initiatives to set an HR direction that is appropriately aligned and supports the company’s objectives.

Assessing external and internal business trends, pressures, and drivers of HR strategy.

Researching and determining environmental factors that may represent barriers to or enablers of success addressable by HR strategy. 

Engaging leadership in defining and governing an HR Strategy.

Ensuring top leadership’s buy-in and alignment with HR strategies through their engagement in the development and monitoring of HR strategies. 

Developing a base strategy that provides guidance on HR direction, initiatives, objectives, and goals.

Leveraging and translating the outcomes of various discovery activities into HR objectives and plans.