Create a Strategic HR Program: Important Steps for HR Professionals
By TOI Staff January 24, 2023 Update on : January 24, 2023
There are three critical steps that all HR professionals should take to create a strategic HR program:
- Build a strategy.
- Align HR practices with business goals.
- Measure the impact of HR policies.
By implementing these essential steps, your organization can begin a strategic HR initiative that will increase employee engagement and productivity and decrease your organization’s overall cost of labor.
Aligning HR Practices With Business Goals
Aligning HR practices with business goals is necessary for companies looking to maximize success. With the help of a strategic HR team, you can better manage your workforce and support your business in various ways.
First, you’ll want to set a clear goal. For example, reduce employee turnover, increase productivity, or decrease costs with suppliers and vendors. Your HR team can provide insight on which initiatives to prioritize.
You’ll also need to measure your progress. For example, you’ll need to conduct employee satisfaction surveys at regular intervals. Compare those surveys to previous ones to determine whether or not your efforts are making a difference.
You must be aware of trends in your industry and current events to identify what is working. These insights can help you determine what type of training and recruiting your team needs.
The right HR strategy can give your company a competitive advantage. By aligning your HR practices with your business goals, you can boost your bottom line and keep your employees happy.
However, it’s important to remember that your company’s goals are just some of the things you need to focus on. It would help if you also considered other factors like your compensation structure and overall workplace culture.
One way to accomplish the feat is to implement an HR scorecard. This process helps you and your business team understand the value of your HR department. It will also help you integrate your data across your organization to pinpoint any HR decisions affecting your strategy. The traditional administrative duties of human resources (HR) departments—recruitment, training, payroll, compensation, and performance management—are transformed into chances to boost engagement, productivity, and business value through the human capital management system.
Building an HR Strategy
HR professionals must understand the critical steps to building an effective HR strategy. As well as providing the framework for an efficient employee experience, an HR strategy can also provide opportunities to improve productivity and enhance workforce engagement.
The first step in creating an HR strategy is identifying and evaluating the business’s current and future needs. This includes understanding the company’s competitive advantages. For instance, if a company is in an industry where its competitors are well-established, it may be wise to pivot its focus toward customer engagement or retention.
Next, it’s vital to conduct a gap analysis to determine the skills and infrastructure necessary to support the organization’s goals. Once the gaps are defined, the company can implement practices that fill them.
Another critical step in developing an HR strategy is to create a mission and vision statement. These statements serve as a “litmus test” to ensure that the organization’s decisions are aligned with its strategic direction.
Once these steps are complete, it’s time to build a budget for your new HR strategy. Adequate funding will help to drive the execution of your HR strategy.
To help you build an effective strategy, the HR department should collaborate with the entire organization. All departments must buy into the idea of an effective strategy.
Testing The Strategy With Key Stakeholders
Involving key stakeholders is one of the best ways to test an HR strategy. Getting buy-in from employees, leadership, and other groups can be challenging. But it’s essential to make sure your plan has the support of everyone.
To do this, you need to create a collaborative plan that will engage stakeholders and drive the implementation of your HR strategy. The following five steps can help.
First, identify your objectives. These may be a combination of short- and long-term business goals. In addition to defining a specific set of objectives, you must establish key performance measures (KPMs) to track progress.
Next, determine your stakeholder group. You’ll want to make sure you include people from different departments. For example, your IT department could have another way to achieve your HR objectives than your human resources department.
Third, ensure that your strategy is aligned with your broader business objectives. A clear vision of what your organization wants to accomplish will ensure your HR strategy aligns with other company areas.
Finally, communicate your strategy. Communicating with people outside your organization will build trust and awareness of your decision. It will also provide feedback. This will help to fine-tune your plan.
Measuring The Impact of HR Policies
Measuring the impact of HR policies and practices can be difficult. Many variables can affect employee behavior, resulting in disconnects between managerial reports and employee-based measures. However, it is essential to consider the overall effectiveness of an organization.
Measuring the impact of HR policies requires an in-depth understanding of the factors that influence these. It is crucial to establish specific objectives and metrics for measuring the performance of an HR department. Some standard HR measures include the number of new hires, retention rates, and development programs. In addition, HR managers can measure the number of employees participating in employee training and personal development plans.
Employee-based measures of HR practices are often argued to be more reliable than management-based measures. However, there needs to be more systematic evidence about the validity of this type of measure.
This research examined the validity of several employee-rated measures of HR practices. A total of 211 studies conducted across a variety of countries, industries, and levels of government reported results based on employee-rated actions of HR practices.