A strong people strategy is a cornerstone of company success. It will help all your employees to thrive, while bolstering workplace morale. This can have profound effects on engagement, productivity, satisfaction, and retention.
According to Korn Ferry, 82% of the world’s most reputable companies have a well-developed people strategy. And those that centre the employee experience are 4X more profitable than others. Let’s discuss why a people strategy plays such a crucial role in success—and how to design and implement one in your company.
Table of Contents
- The Need for People Strategy in the Evolving Workplace
- Pillars of a Winning People Strategy
- How to Align People Strategy with Business Strategy
- Measuring the Impact of Your People Strategy
- People Strategy in Action: Case Studies
The Need for People Strategy in the Evolving Workplace
In the past, HR fulfilled more of an administrative function—and these duties, like ensuring compliance, remain important. But today’s HR should act more as an employee advocate and architect of the employee experience. With the prevalence of remote work, coupled with shifting employee expectations, developing a people strategy has become a core part of HR’s mission. Let’s examine why in more detail.
Meeting Employees’ Changing Needs
Today’s employees expect their company to enhance their experience in several key ways:
- Offering flexibility—the option to work when and where they want.
- Taking a human-centric approach that supports their well-being as a whole person instead of just a worker.
- Instill an inclusive culture, while prioritizing diversity and equity.
- Provide training and development that nurtures their growth, preparing them for changes sweeping their industry or function.
With the fast pace of technological changes, we’ll see an increase in skills gaps over the coming years. But a robust people strategy can help fill these gaps, keeping individuals and organizations competitive.
What Are the Benefits of a Strong People Strategy?
A people strategy enhances both the employee experience and talent development, benefiting organizations in multiple ways:
- Cultivating a strong employer brand and building loyalty by ensuring people feel valued and supported.
- Encouraging innovation by empowering employees to take risks and voice creative ideas.
- Increasing retention by instilling a culture where everyone feels fulfilled and included. Turnover can decrease by 21%, and absenteeism can drop by 78%, in organizations with high engagement, Gallup has found. And highly engaged employees are 73% less likely to consider leaving, says the Society for Human Resource Management (SHRM).
- Boosting returns: According to McKinsey, companies with a culture in the top quartile see 60% higher returns than those with median cultures and 200% higher returns than those in the lowest quartile.
With all of these benefits, no organization can afford to neglect developing a people strategy.
Pillars of a Winning People Strategy
Let’s explore the key elements of a strong people strategy.
Talent Acquisition & Onboarding
A full 90% of employees decide whether to leave or stay within their first six months. Work to attract and integrate the right people by optimizing the employee experience throughout the hiring and onboarding process.
Make hiring as hassle-free as possible, streamlining the sequence of interviews to eliminate any unnecessary requests. Build in regular touchpoints to thank and update employees on their status, too.
Further, design an onboarding process that lasts a full year, as SHRM advises. Provide regular check-ins, peer support, mentoring, tools, and training tailored to each individual’s needs.
Performance Management
Just 1 in 5 employees say their company’s performance management practices inspire them to do outstanding work. Yet effective performance management can boost productivity by 24%.
To support employees, today’s managers must transition from the role of boss to supportive coach, says Gallup. Here are several ways in which they can do that.
- Hold inspiring conversations with employees and teams, discussing progress toward goals and KPIs.
- Share frequent feedback—and relate it to a specific goal.
- Use a quality goal-tracking system. Such tools can reduce burnout while boosting productivity by keeping people focused on their most vital duties.
Through these practices, you’ll drive excellence and growth throughout your company.
Learning & Development
Invest in cultivating employees’ skills and potential in ways like these.
- Create a personal development plan for each employee, targeting resources and opportunities to support their growth.
- Identify high-potential employees who are ready for advanced training, providing them with leadership training and stretch assignments.
- If you’ve identified skills gaps, look for skill adjacencies. This means considering who might already have skills in related areas—even if it doesn’t seem obvious. Through cross-training or peer mentoring, help them build these competencies.
- Foster a culture of continuous learning. Praise employees when they proactively work to grow, and give them chances to share their knowledge. Show your own excitement for learning new things, too.
Supporting employees’ growth in these ways will greatly enhance their experience.
Employee Engagement & Retention
All of the above steps will promote employee engagement. But here are a few additional ways to create a thriving and motivated workplace:
- Inspire them with a compelling vision—and show how their work contributes to it.
- Give everyone the chance to do work that feels deeply meaningful. Talk with each employee about what drives them and what tasks they find most fulfilling.
- Share success stories. When their work made a difference to a customer, let them know why it mattered.
- Provide opportunities for peers to connect on a human level, either in-person or via video chats. Group meals and volunteer days are a couple of options.
Through these strategies, you’ll build an engaged and unified workforce.
Total Rewards
Revisit your compensation and benefits package regularly. Conduct industry research to see what competitors are offering, and make upgrades as needed. For example, excellent wellness, parental leave, and mental health benefits are essential.
Also evaluate salary levels to make sure you’re equitably compensating employees. And consider making salary data transparent, so employees feel fairly rewarded.
Share frequent recognition and appreciation, too. Consider offering financial incentives for exceptional work, clearly outlining how you’ll distribute these rewards.
Diversity, Equity, & Inclusion
Build a fair and inclusive culture through the following steps:
- Seek out diverse perspectives when making organizational or team-level decisions.
- Democratize access to learning opportunities by creating standardized protocols and training modules.
- Teach leaders how to create space for all employees to speak up in meetings and show up as their authentic selves.
- Provide workshops and discussion groups on allyship, as well as forums where employees from marginalized groups can discuss issues affecting them.
Take an honest look at your performance in each of these areas. Document your degree of success in each area with clear metrics, wherever possible.
How to Align People Strategy with Business Strategy
Now, let’s discuss how to ensure your people strategy aligns with overarching business objectives.
Review Key Business Goals
Your people strategy can support specific business goals, like increasing market share or launching new products. So, review your organizational goals and KPIs to inform your people strategy.
Set Priorities Supporting These Goals
After reviewing your business goals, ask yourself these questions:
- What objectives are we falling short of because of our talent management practices? (Engage in honest reflection about your performance in each of the key pillars of a people strategy shared above.)
- How can we upgrade our practices in these areas?
- What changes can we agree to implement?
For instance, if you aim to launch innovative new products but don’t have an inclusive culture, you may be stifling creativity. Homing in on diversity, equity, and inclusion could unleash a wealth of ideas.
Or, if the company is pursuing a digital transformation, it will need to focus on learning and development that instills the necessary skills in its people.
Enlist Support from Leadership
Leadership should play a crucial role in championing your people strategy and driving its growth. Leaders can emphasize how the strategy supports the business’s vision and mission. They can also help department and team managers to understand how implementing the strategy will help achieve business goals.
Measuring the Impact of Your People Strategy
Identify key metrics for evaluating the effectiveness of your people strategy. These can include employee satisfaction, retention rate, and performance data.
Use data and analytics to track the progress of your efforts and make adjustments. Analytics software can aid in measuring the impact and ROI of your people strategy. Examine how engagement, satisfaction, and retention change after implementing this initiative. And use performance management tools to monitor and support employees’ ongoing growth.
Conduct regular performance reviews and share frequent feedback to ensure alignment with business goals, too. This feedback will enhance engagement while keeping teams on track to achieve targets.
People Strategy in Action: Case Studies
Let’s look at a couple of real-world examples of companies that have successfully implemented people strategies.
Hilton
Hilton is known as a Great Place to Work.® The company strives to improve employee well-being in numerous ways, reports SHRM. First, it offers a robust employee assistance program to support mental health well-being. Second, it also offers curriculum on topics like stress management and coping with grief, while also providing free educational opportunities and caregiving support.
To inform its efforts, Hilton surveys employees regularly—and it achieved 90% participation rates in the past year. Through a mix of qualitative data and comments, it gains rich insights on how to improve the employee experience.
The road to success hasn’t always been smooth for Hilton. During the pandemic, as travel came to a standstill, it was forced to lay off thousands of employees. But Hilton partnered with other companies to connect furloughed staff with new opportunities. By prioritizing transparency and employee well-being, it maintained a strong employer brand through that difficult time.
“Stay close to your team members. Stay close to the business, too,” says Amanta Mazumdar, Hilton’s VP of total rewards, in a SHRM interview. “You learn a lot from speaking to team members about what’s really resonating, what’s really working, what their needs are.”
Zillow
Zillow is also recognized as a Great Place to Work. In fact, 93% of employees characterize it as a great place to work, compared to 57% at a typical company.
What sets Zillow apart? First, the company prioritizes listening to its employees. Like Hilton, Zillow surveys employees regularly (on a quarterly basis) to better understand their needs. Second, it strives to foster a workplace that supports equity, continued development, and flexible working options. And it offers well-crafted wellness initiatives, like access to mental health counseling and paid volunteering time.
During the pandemic, Zillow worked to reimagine the role of managers. By implementing peer coaching sessions, they helped managers open up and learn from each other rather than feeling isolated. Through this strategy, they helped managers build their human skills to support their employees—and feel supported themselves—during a critical time.
A strong people strategy will play an essential role in your organization’s continued competitiveness and growth. As you enact a well-planned people strategy, your efforts will further long-term company success by enhancing fulfillment, engagement, and achievement.
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