Why Your Business Needs a People Strategy

A sound people strategy goes beyond the basics of human resources, emphasizing leadership, culture, talent, and more – it is a more comprehensive understanding of your team. How a company empowers its workers determines how well they will perform as your organization grows and changes. You need to have a people strategy in place that nurtures and encourages their talents, shores up their weakness, and gives them room to grow.

Here we’ll take a look at what exactly a people strategy is and why it’s important for your organization to have one in place.

An Overview of People Strategy 

Undoubtedly you have a strategy in place for achieving both your business goals and empowering your team, but how well do these strategies intersect, if at all? If you don’t have a good answer to this question, you might need to revisit your overall approach to talent. It’s no secret that the most valuable asset at any company is your team, especially if they are well supported and given the tools they need to succeed. Without direction or a good plan for progression and growth, however, even your best talent may struggle.

A people strategy is a set of practices that dictate how you attract, retain, and develop your employees to best accomplish your company’s mission. Essentially, a people strategy exists to keep the business, its employees, and the human resources team aligned. A people strategy helps employees reach their fullest potential by providing professional development, ongoing education, and other support. At the same time, a people strategy helps the company reach its desired business outcomes by reducing turnover and increasing productivity. 

Why Does Your Business Need a People Strategy?

Having a strong people strategy indicates that your company is forward-thinking and willing to invest in critical assets. Developing a sound people strategy will also help you define who you want to be as an employer and as a business. It’s also potentially dangerous not to have a people strategy in place – this can lead to a fragmented organizational culture, frustrated employees, and an overall lack of direction. 

Here are some areas where a people strategy will come in handy: 

Employee empowerment: Your team is crucial to your organization’s ability to meet its objectives and achieve business goals. A people strategy helps enable your employees to thrive by providing them with the right tools and a favorable work environment. When employees are empowered, they deliver better outcomes, both externally and internally. 

Loyalty: When employees are engaged, they are not only more likely to meet company goals, but also more willing to go beyond them, and feel empowered to innovate on and improve existing processes. When employers value and encourage their employees, they are more likely to feel loyalty toward the company, and this will in turn reduce turnover. According to a Gallup survey, highly engaged teams are 17% more productive and 20% more profitable, and employees are 41% less likely to be absent from work. 

Growth: Many firms have a bias toward hiring talent from outside, but investing in growing your current employees is often a better strategy, even if it requires more up-front investment. Moreover, investing in the growth of your employees makes them feel valued by the firm and helps them feel engaged with the work that they do.

Communication: Implementing a people strategy helps businesses connect on a deeper level with their employees. It helps demonstrate that, as an employer, you are committed to their well-being. Modern workers value security, support, and flexibility as much or more than a high salary or workplace perks. In the long run, communicating well with your employees demonstrates just how attuned you are to their needs. 

People Strategy vs. Human Resources Strategy 

While a broader human resources strategy and people strategy can overlap, they have a different focus. Here is an overview of some of the distinctions between them:

People strategy:

  • Enables team growth
  • Establishes a culture of feedback
  • Focuses on employee experience 
  • Nurtures respectful, two-way communication
  • Responds to the needs of the workforce
  • Fosters equity, diversity, and inclusion

Human resource strategy:

  • Strives to recruit and keep top talent
  • Manages employee logistics and administration
  • Builds onboarding and payroll processes
  • Implements performance management tools and assessments
  • Ensures compliance and mitigates risks
  • Establishes compensation structures 

While the distinctions between a people strategy and human resources strategy may seem subtle, there are important differences. Where a people strategy strives to build relationships between employees and organizations, a human resources strategy focuses on building systems that attract and retain employees. You can think of the HR strategy as the foundation for a high-performing team, while a people strategy acts as the key that unlocks their potential and further empowers them to surpass their business goals.

How to Build a People Strategy 

The business world changes frequently, and it’s difficult to predict what circumstances will be, even a few years out. That said, building a future-proof people strategy helps ensure that your team remains resilient, no matter how uncertain the future. Consider these tips to help you build an excellent people strategy: 

Develop a strong leadership presence

How well you manage your organization’s talent pool plays a massive role in determining how successful your organization becomes. When managers are sources of inspiration and confidence for their teams, this can encourage team cohesion and help team members be more engaged with the company.

Focus on employee engagement 

To give your employees a sense of connection with your company that goes beyond their job duties, it’s important to emphasize and encourage employee engagement. Make sure your workers know that they are a key part of the organization and crucial to its success.

Prioritize training, learning, and development 

Providing the tools and opportunities that your team needs to grow and improve should be at the top of your company’s priority list. Provide your employees with professional development opportunities and ways to hone their existing skillsets. Learning and development opportunities are important to your team. In fact, a recent LinkedIn study on global trends revealed that training opportunities motivated 73% of employees to remain with their current employers. 

Offer advancement opportunities

A sound people strategy supports a strong leadership pipeline that not only identifies people with leadership potential but also creates a leadership development strategy to build the skills future leaders will need. Creating a clear career path helps retain top talent. 

Establish employee feedback mechanisms

Establishing a solid feedback mechanism will enable you to understand your employee’s concerns and needs. Feeling like their concerns are heard and especially acted upon is a critical part of employee engagement and a key element of employee satisfaction. There are lots of tools you can use to build these feedback mechanisms, but equally important is how management responds to and acts upon criticism that they receive.

Support the hybrid workplace

Let’s face it: COVID-19 has disrupted the workplace environment. While some employees prefer working in brick-and-mortar offices, others have embraced the virtual workplace. In order to meet the needs of both sets of employees, consider adopting a hybrid workplace environment, and be certain that you are sensitive to the challenges that such a framework brings. 

Show that you care about the health and well-being of your employees

The pain of the COVID-19 pandemic has revealed that employers, as a whole, do a poor job of attending to their employees’ health and well-being. Both the mental and physical health of your employees impact their performance. Wellness programs, flexible leave, and other policies can help your team manage difficult times and build resilience for the future.

The Bottom Line: Invest in Your People

When it comes to improving the performance of your workforce and giving your company a competitive advantage, you must go beyond a mere human resources strategy. Building a sound people strategy helps foster the excellent relationships with your employees that helps motivate them to become their most productive selves.