A human resources strategy addresses a business’s long term people requirements needed to achieve the business strategy and plan. This includes understanding of business structure, employee positions and employee capabilities.
A business strategy outlines the long term direction of a business and captures the high level goals and direction of the business. Areas identified in the business strategy can include;
- Opportunity for process improvements or outsourcing
- Response to proposed industry changes or enhancements
- Introduction or acquisition of new services, resources and infrastructure including plant and equipment, technology, income streams, buildings and facilities, production materials
- Most importantly the requirements of your workforce including structure, positions, headcount and skill sets.
It is critical for a business to align its overarching business goals with its human resource strategy to achieve business success. While Human Resources requires having the right policies and forms in place, Human Resources is more than that. It also needs to be a part of every aspect of a business to support each stage.
There are a number of essential steps in the set up of a human resource strategy so it aligns with the business strategy and links in with the business’ goals.
To help a business define its human resources strategy, the business needs to know what it wants to achieve. This can include a mixture of short and long term goals. These high level, business goals are determined during annual planning sessions. This information can also be used to determine how the Human Resources Strategy will support the business in achieving these goals.
The next steps involve;
- Understand the human resources values of the business,
- Audit of the Human Resource function across the five categories of the employee lifecycle, and
- Develop a Human Resources Strategy that addresses the long term people requirements of the business to support the business strategy and plan
- Develop theHuman Resources Plan, which documents and details the initiatives and tasks required, across each of the employee lifecycle categories, to achieve the Human Resources Strategy, and links into the overall business strategy and goals.
Develop the Human Resource Values
An important part of Human Resources planning that sets a business apart from other businesses, is Human Resources values. That is, what does a business offer its employees from a human resources perspective that is relevant to the business and if possible unique, to help it stand out as an employer of choice.
For example, will the business invest in ongoing training and development for employees, how will it celebrate birthdays and employment milestones and will it offer flexible work practices.
A business should take the time to list all of the benefits that it offers and that it wants to be known for. These can be separated into tangible benefits such as additional superannuation contributions, ongoing professional development, additional leave options; and intangible benefits such as working from home, self managed working hours, and team building activities. It is also important to define how these benefits will work and why they are a good thing for employees.
It further helps to develop Human Resource values by defining what values a business is not. What does a business consider not to be a benefit, but in fact is a disadvantage or negative action that it does not want to be known for. Examples might include working overtime for no extra pay, or employees being too busy or understaffed to take annual leave regularly or staff not recognised for their individual and team performance
This information is an important part of a business brand and the reason why a prospective candidate will want to work for that business. It is also great to remind current employees what is on offer for them.
Conduct a Human Resources Audit of the business
To help understand the human resources requirements needed to support a business’ goals, it is beneficial to complete a Human Resources Audit of the business. This audit involves reviewing the business against the employee lifecycle. At Small Business Society we categorise the employee lifecycle into five key areas:
Planning; the current and future human resources needs of the business and ensuring the right processes and systems are in place to support those needs.
Attraction; of the right candidates and induction process which sets the employer and the employee up for success.
Management; of the development, expectations and behaviours of employees which will enable them to be engaged and grow with the needs of their role, the business and customer expectations.
Engagement; of employees is an important part in making individuals feel a part of the business, valued for what they produce and developing a good brand.
Conclusion; is the end of the employment lifecycle and can occur by the employer and the employee.
By auditing a business against these five areas the business will be able to identify what is missing or lacking from its human resources and therefore what is required to support the business in achieving its goals. This might be recruiting additional staff, developing certain skill sets, implementing a framework or initiative to support development and engagement or formalising a policy to manage expectations.
Develop a Human Resources Strategy
Once an audit has been completed, the business will be in a better position to understand what needs to be addressed from a human resource perspective. The next step is to develop the human resources strategy.
To develop a strategy the business needs to start by identifying high level initiatives and tasks required to support the direction of the business and offer best practice and compliant human resources. Some examples of what to include in your strategy are;
- Hire additional employees during times of growth, or reducing staffing levels as needed.
- Plan for new technology or systems to meet business demands or to meet legislative changes.
- Promote Human Resources values towards the business being an employer of choice.
- conduct an employee survey.
- Analyse the training needs of the business and individuals to upskill or further train employees.
- Develop a managers and leaders specific training program
- Undertake a salary and benefits review including benchmarking salaries and implementing a formal review and increase framework.
- Implement or revamp a health and wellbeing program including supporting certain charities and raising money from monthly casual dress days.
- Carry out a survey of employees about the current reward and recognition program or to implement a program that recognises and rewards against business values.
- Develop an exit framework to capture feedback and suggestions from exiting employees. You never know what the future may hold so it is always good practice (where applicable) to consider the exit process.
Your human resources strategy will include a range of short and long term goals which will be further broken down in the Human Resources Plan, the final step.
Develop a Human Resources Plan
Once a business has its human resources strategy, the business needs to develop and document a human resources plan.
To develop a plan the business needs to start by breaking down the initiatives and tasks outlined in the human resources strategy and includes timeframes, budget and allocates responsibilities. Some of the areas you should include in your plan are:
- An overview of the current business and plans for the future including information about your clients and potential customers, financial data, business objectives and demographics around your current employees.
- An outline of your human resources strategy which provides a breakdown of human resources needs including capabilities, structure and positions as well employees.
- Detailed action planning of the key objectives of the human resources strategy and assigns timeframes, budget requirements and allocates responsibilities.
- Consider the organisational implications of your human resources plan including financial requirements, increase in equipment and possibly a new office.
- Outline possible contingencies which may assist if things don’t go to plan including outsourcing, external funding or phased roll out.
In conclusion, it is important to align business goals with Human Resources Strategy to help a business achieve success. While Human Resources requires having the right policies and forms in place, Human Resources is more than that. It also needs to be a part of every aspect of a business to support each stage.
Human Resources takes time to set up and get right, but when it is planned right, and the business knows what its Human Resource needs are then that business is on the right path to success.
Contact Small Business Society for help in developing your Human Resources Strategy.
Contact Small Business Society for help in setting up your Human Resources strategy.
The information provided in this document is for your guidance only and is general in nature. It does not constitute as legal advice. It is the responsibility of the individual to seek legal advice where required.
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About Kate Tongue
Kate Tongue is the founding Director of Small Business Society.
She is a qualified and experienced Human Resources professional with more than 10 years of experience across the private and public sectors.
Her particular interest and experience is in managing the employee life cycle, delivering process improvements, and Human Resource strategy.
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