What Is HR Strategy? And How Can You Best Execute It?

Setting strategy is only the first step; turning it into a strategic HR plan that you successfully execute is far more challenging. The process fails for a number of reasons, including lack of visibility into business goals and inadequately defined measures for success. The volatile conditions in recent years also require measures to keep the strategy aligned as business needs change. Being programmatic helps to ensure that relevant strategy is executed effectively.

Align with business strategy. Human resources strategy should always respond to business strategy; it also should align both upward (with business priorities) and downward (with functional priorities). In a world where talent is increasingly seen as an organizational priority, HR strategy should inform and influence business strategy. 

Establish goals as part of the strategy. Consider what constitutes long-term success for your HR function and how to prioritize goals to support enterprise strategy. Perhaps create a prioritized list of initiatives and HR goals, and evaluate the gaps between the current state and your mission-critical initiatives. 

Set criteria for measuring successful strategy execution and adaptation. Once you’ve developed goals, identify four to seven key performance measures that describe the current level of performance of the HR function. Make sure these measures are specific, quantifiable and clearly tied to the desired performance, and use those same indicators to measure performance in the future.

Craft a clear and concise statement that captures the core of the strategy and summarizes the key objectives on which the HR function will focus over the next year. This empowers your organization’s HR professionals and employees to contribute positively to enterprise objectives. Tailor the communication to each stakeholder group to provide employees with direction for their decision making.

Adapting to the rapidly evolving COVID-19 situation has required C-suite leaders to regularly revisit and adapt their HR strategies and tactics to track changes in business strategy and ensure their organizations’ survival and growth through strategic human resources management.

The days when strategic planning was a once-a-year, set-it-and-forget exercise are over. Today’s rapidly changing business environment requires HR strategies to adapt. Gartner research shows:

• Most organizations (66%) say the top barrier to effective strategic planning is the lack of integration with business needs.

• Thirty-eight percent of HR leaders state that their HR strategic planning process is not aligned to the business strategic planning calendar, and changes are not triggered by shifts in the business plans.

• Fifty-eight percent of organizations point to the lack of relevant metrics to track progress as one of the top barriers to effective strategic planning.
• Only 28% of HR leaders report reviewing their strategies more than once per year, and only 12% change them more than once per year. 

To respond to changes and avoid wasting time on strategic planning, CHROs should identify external and internal triggers for strategic review and monitor them continuously. To do this:

• Talk with relevant stakeholders to identify business-, management- and function-driven strategy triggers for your organization.

• Use this preemptive identification of triggers to act quickly when they occur instead of falling behind the rest of the business.

• Once triggers are established, proactively monitor business changes to ensure the function can meet business needs as efficiently as possible and improve overall business outcomes.

Goals of workforce planning include:

1. Aligning talent planning with the strategic business plan

2. Identifying key workforce risks in the short, medium and long term

3. Creating a talent strategy to mitigate potential workforce risks

4. Mapping out critical skills needed in existing roles

5. Ensuring talent readiness for future business needs

6. Filling current and projected talent gaps

7. Recruiting future talent for the organization

8. Preventing attrition

As part of strategic workforce planning, it is essential for HR leaders to identify whether the organization has the capabilities and skills it needs to achieve its business goals. It’s also critical to incorporate plans to address skills needs directly into HR strategies.

Skills are a foundational element for managing the workforce within any industry. Improving and automating the detection and assessment of skills enables significantly greater organizational agility. Especially in times of uncertainty, or when competition is fierce, organizations with better data on skills can adapt more quickly by more accurately identifying which opportunities are feasible immediately and which require more investment over time.

Gartner research shows that headed into 2022, building critical skills and competencies was a priority for 59% of HR leaders — and the challenge remains complex. 

Many of today’s new and emerging skills are also difficult to obtain, so HR leaders first need a way to sense shifts in skills needs dynamically. This allows them to:

• Anticipate needs as they occur, rather than trying to predict the future, and adapt to those shifts in an iterative, course-corrective way

• Develop skills at the time of need by identifying and implementing skills accelerators — strategies that leverage existing resources (e.g., content, people and skills adjacencies) to develop new skills solutions at speed

• Enable employees to make skills decisions dynamically, such as by creating channels for them and the organization to exchange skills information for mutually beneficial and flexible skills development 

Prioritizing skills according to enterprise goals will help HR leaders understand the key talent issues they will need to tackle.

Pandemic-accelerated trends continue to transform how organizations acquire, develop, motivate, reward, serve and manage talent. Technology has emerged as an essential tool in responding to uncertainty and creating a more human-centric but adaptive and composable organization. HR technology, in shaping employee experience and driving business productivity, is therefore an increasingly critical component of successful HR strategy.

Increasingly, designers of human capital management (HCM) applications aim to improve the candidate, worker, learner and manager experiences, while acknowledging that most employees spend relatively little time using these applications. Many applications have a conversational user interface or use insights from behavioral science disciplines to engage users, influence behaviors and contribute to improvements in organizational culture. Continuous learning, listening, feedback and performance management are also becoming necessary to support hybrid and agile ways of working. HR technology shapes employee experience and impacts business productivity.

But amid continual hype around technology trends, HR leaders must understand their own needs and capabilities as they plan to add technologies within HR processes and existing applications. Aim to improve the employee experience by resisting one-size-fits-all solutions, and instead deploy flexible, human-centric HR processes and tools to meet diverse workforce needs.

The core functional pillars of HCM applications are:

• Administrative HR: Core HR organizational and employee data management, employment life cycle processes, transactional employee and manager self-service benefits, and payroll administration

• Talent management: Recruiting, onboarding, performance management, compensation allocation, career and succession planning, learning and development, and workforce planning

• Workforce management: Time capture, absence management, scheduling, task and activity tracking, budgeting and forecasting

• Integrated HR service management: Content delivery via a portal and knowledge management capabilities for employees and managers, which may include case management (ticketing/routing), business process management tools and digital document management