6 min read | 13 February, 2020 By Laura Sands
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It’s pretty much 'lesson 101' when you’re running a business: develop and stick to a business strategy. But what about an HR strategy?
An HR strategy can give you a competitive edge and is often neglected by SMEs in favour of sales-driving strategies.
Get your this right and you’ll drive growth, fill gaps in technical skills and encouraging behaviours that contribute towards a more successful organisation.
Without a solid HR strategy, you put your business at risk. A lack of cohesive human resource planning impacts your business from top to bottom - think costly hiring mistakes and dissatisfied customers.
And, with 40% of small businesses failing within their first 5 years, can you afford to ignore your HR planning?
In this article, we focus on understanding what an HR strategy is and provide tips on developing a successful HR strategy for your small business.
At its simplest, an HR strategy is a formalised plan that aligns your human capital with your business’ needs. A well-planned HR strategy lets you allocate time and resources to support your business effectively.
For instance - is your business plan to innovate and introduce new technology to the market? If so, you’ll want to hire researchers and a specialist sales team. You’ll also need to foster a more innovative culture.
However, if the next 5 years are about improving customer service and establishing a reputation for trust, you’ll need to focus on a different set of initiatives.
A good HR strategy will help you hire, onboard and train your staff more efficiently. It will also help you keep your best employees, attract top talent and establish a healthy workplace culture that avoids the risk of employment tribunals and other bad employer PR.
So, how do you go about building a HR strategy that helps your business thrive? Here are our 7 top-tips.
It almost goes without saying that your HR strategy cannot be developed in isolation - it must support your broader business strategy.
Be certain that you’ve identified every area of the business strategy with a human element attached to it – from recruitment through to compliance. There shouldn’t be any surprises in the HR strategy; it should be a natural progression.
You can’t ignore the way external factors affect your business’ performance. A successful HR strategy takes account of these.
Make sure other stakeholders are onboard with the new HR strategy, too.
From software budgets to skills planning, getting the input of the rest of the business will ensure your approach fully supports everyone at the right time, for a better chance of success.
Think about the way the initiatives in your HR strategy may affect your business culture.
Multi-tasking initiatives such as flexible working, inclusive hiring practices and career conversations will (if implemented well) do more than one job. They can help improve employee health and wellbeing, increase productivity and improve retention - and that’s just for starters.
But beware: if they’re implemented poorly or ignored altogether, these initiatives can damage your workplace culture.
You can’t manage what you don’t measure. Include KPIs in your HR strategy to help you understand how you’re performing. You don’t have to achieve everything at once – give yourself short, mid-term and longer-term goals.
Tools such as absence rate and employee turnover can give you an indicator of how you’re tracking.
For more insight, KPIs such as employee satisfaction can be helpful, especially if they’re backed up with an open feedback culture.
If you’re a small business, it’s likely your HR manager or director doubles up with another role. Our own research shows that CEOs are spending a 5th of their working week on HR tasks.
Take the pressure off with a dedicated HR resource – a consultant or agency can really help take the pressure off and advise on areas that need special expertise.
On a more practical level, investing in HR software like Breathe can help make life easier by providing a central location for all HR documents. The system also supports the day-to-day running of the business with functions such as holiday tracking and performance management.
Your HR strategy is a living document, and just like a journey programmed into a sat-nav, you may need to re-route your HR strategy you encounter problems along the way.
Don’t be afraid of changing your approach if factors change or if you realise that certain plans aren’t coming together.
Reviewing your strategy on a quarterly basis alongside other business strategies will help you keep your plans running smoothly and tuned to your business’s needs.