Whatever the size of the business, a small start-up to a large well-established organisation, a human resources strategy forms the basis of everything in HR. It creates a robust, relevant and effective plan for how the business will successfully manage its workforce and ensures it aligns with its business needs and activities.
An HR strategy is a long-term plan that directs HR practices throughout the organisation and sets the size, structure, cost and direction for all the key areas of HR. These include recruitment, performance appraisal, training and development, salary and succession planning. While a business may aspire to become the market leader in its industry, it cannot achieve this without the organisational capability.
Human resources planning
Human resource planning can often be overlooked, particularly in newly established businesses when the initial focus is profitability and ensuring the business model is sound. However, there will soon come a time when planning becomes more crucial and this is what will become the basis of the HR strategy.
Planning for growth
A business can experience real benefit by growing its workforce quickly. If there is a robust plan in place, then the company is in a position to bid on larger contracts and grow with the required amount of staff in place. When an organisation needs to grow quickly or employ a large number of seasonal staff, then there needs to be an organised approach to recruitment. Even with temporary staff, there still needs to be appropriate onboarding and training. Planning for this will ensure new employees understand their roles, company policies and will guide them into position so they can quickly become productive.
Planning for downsizing
Planning for the possibility of downsizing and redundancies is an important part of any HR strategy. A business can suddenly lose a crucial account that sees it no longer require the same size workforce. The credit crunch in 2007 hit many businesses hard, forcing them to lay off staff. But planning for such a scenario ensures the company is prepared and can fulfil its legal and financial obligations. Telecoms giant BT was one of the few companies that avoided laying off staff during the 2007 credit crunch. Thanks to an effective HR strategy, it was able to retain its staff by retraining and redeploying them across the business.
Features of an effective HR strategy
While a business may aspire to become the market leader in its specific sector, unless it has the correct organisational capability and strategy to make it possible, it won’t be able to reach this goal. An organisation must ensure it has the internal capability to deliver its business goal. The HR strategy covers all of the key areas in HR including the following key points:
- Company vision
- Defines the role of HR
- Aligns business and HR needs
- Develops company overview
- Investigates company needs
- Evaluates existing HR processes
- Reviews organisational design and culture
- Compensation and benefits
Examples of successful HR strategies
Many of the companies that are successful in their industry and have developed a reputation for being a great place to work will have innovative HR strategies. Retailers Tesco, John Lewis and Sainsbury’s all know the importance of a good HR strategy that makes their business stand out. Each has focused on a particular aspect of their business and concentrated on developing it to provide an effective channel for their brand image, loyalty and employee engagement.
John Lewis Partnership
The John Lewis Partnership has become a retail brand renowned for its unique approach to employee management. The employee-owned business has developed an employee wellbeing strategy that reflects the company’s values and today’s business priorities. Its formal HR strategy is built around the company’s written constitution that sets out their principles, governance system and rules. Employee happiness and harmony are considered the most important goal for the business.
Supermarket giant Tesco has a well-established HR strategy that has enabled the business to grow from strength to strength. They base their HR strategy around the communities of each of their 3,960 UK stores. They promote their brand by providing active support to local communities, employing local people and looking after the local environment.
Despite the incredibly competitive market that is the food retail sector, Sainsbury’s has been a consistent performer thanks to its innovative approach to human resources. It was actually the retailer’s HR department that pioneered the self-service style of shopping which can be now be seen in supermarkets across the world. Since opening its first worker academy almost 100 years ago, today, the retailer’s training academies concentrate on preparing staff to deliver the best levels of service.
HR Planning Support
HR Solutions can help you formulate your HR Strategy, through an engaged exercise to help explore your company’s risks, objectives and overall strategy. Find out more by calling us on 0844 324 5840 or contact us online.