How to create a people strategy and be less reactive

The causes of most significant business problems will most often relate to people.

For example, if you ask your staff why growth is slow, they might say: “We don’t understand the strategy or the plan. We don’t understand our roles or how they relate to those of our colleagues.”

Your people strategy is critical to solving such issues.

Rather than reacting to problems with staff, a people strategy proactively aligns your people with the company’s vision. It shows them what that looks like through short and long-term plans. And it shows them specifically how their roles contribute.

In this way, a successful people plan is essential for boosting recruitment, retention and performance – and ultimately ensuring your future success.

In this article, we talk about how to create and deliver a people strategy for your business.

Here’s what we cover:

• Problems with reactive people management
• What is a people strategy?
• How people strategies benefit employees and businesses
• How HR technology can help
• How to create and deliver a people strategy
• Creating a blueprint for people success

Problems with reactive people management

The UK is suffering a huge skills shortage fuelled by a dramatic spike in vacancies following the pandemic.

But, with runaway inflation in the cost of goods and wages, simply paying people more to boost recruitment and retention is not always helpful or possible.

A reactive stance to these challenges will likely lead you into a raft of longer-term problems. Unable to attract the right staff, you’ll be challenged to operate your business effectively, let alone grow and develop.

Martin Brown, CEO of business growth adviser Elephants Child, says: “We’ve had clients offer 10 people jobs but only six showed up because, in the space of a week, they’ve received a better offer.

“If existing personnel see colleagues leaving for greater freedom or salary, they will also get twitchy about their commitment to the business.

“That could lead to reputational and brand risk because you don’t have the staff to deliver your promised service quality.”

Vicki Field, director of Field HR, says another problem with a reactive people management stance is that the HR team is constantly fighting fires, making it unproductive.

“HR has the same obligations as other business functions,” she adds. “None can run successfully on a reactive basis.

“The chief HR officer is responsible for ensuring the people function grows with the business, and I’d always recommend planning and preparation with a six-month, one-year and five-year plan.”

What is a people strategy?

A proactive people strategy helps solve many of these problems by describing your business’ relationship with its talent. It covers every part of that relationship and how it aligns personnel with business goals.

It includes recruitment and onboarding, rewards, recognition, development, culture, values, and internal communications. It should also cover practical issues such as working from home or hybrid-working policies.

Each category should contain actions and goals designed to drive the company strategy.

Your people strategy is effectively a roadmap that will guide you as the business grows.

Take hiring, for example.

As the size of the company grows, it’s good practice to have a plan in place for employing more people. You’d want a plan to cover anything from a year to, say, four years ahead.

And you’d have clear hiring goals that correspond with the growth of the business, plus pathways to achieve those goals.

Say, for example, the business had a growth target of reaching 1,000 customers. You’d need to ensure by that point you’d be ready to hire extra customer support team members and sales reps to meet the demand and keep things moving in the right direction.

Martin says: “Your people strategy should also cover how you aim to create the right physical and psychological environment for people to thrive.

“That includes inclusivity and other environmental, social and governance (ESG) factors related to people.

“You need your strategy to demonstrate excellence and engagement with your people. Failing to do that risks damaging your brand.”

How people strategies benefit employees and businesses

A proactive people strategy boosts morale and motivation by giving people clarity over their roles and showing how they align to the overall business strategy.

Vicki says it helps each member of the HR team by explaining their specific objectives within the overall HR strategy. It also helps you focus on each aspect of HR, and continued development of the function, she says.

A people strategy motivates staff by giving them autonomy and enabling progress.

If the strategy can show them how they fit into the business’ wider purpose – not just a narrow commercial goal – it can further improve their engagement and productivity.

For the business, better morale and motivation increase staff retention and productivity. It also creates advocacy among your staff, meaning they’ll talk positively about your business and help you attract others.

There are many other potential knock-on benefits from having a robust people strategy. For example, if it covers preventative measures on mental health in the workplace, this could avoid much bigger problems in future.

How HR technology can help

Cloud HR technology can play a critical role in delivering your people strategy and ultimately boosting business performance.

You can use HR tech across the employee journey – from onboarding to offboarding – and to gather and analyse data to help you make smarter decisions and boost performance.

Good HR tech can do much more too. For example, it can help create amazing employee experiences for your staff.

Interactivity is a key factor. Small businesses tend to grow ad hoc, accumulating various software and solutions that don’t talk to each other.

Good HR technology links to other software such as your accounting and payroll systems, and as businesses mature that interactivity becomes critical.

For example, linking packages helps you get feedback from your business and benchmark that against your sector. It can also help you get more qualitative analysis in addition to the numbers.

Martin gives the example of a client who is already highly proactive in their people management.

“But they still have a constant challenge in recruitment and retention,” he says.

“We’ve been able to use data and analytics in HR technology to help them be more specific in the way they recruit – about what they need and why; making recruitment practices faster and more effective.”

How to create and deliver a people strategy

The first principle in building an effective people strategy is to link it to the overall business purpose, values and strategy.

Each category – such as recruitment, rewards, and training – should contain short, medium and long-term goals and behaviours that link to your purpose, values and strategy.

Martin says: “Your people strategy needs to link your longer-term plan with your annual operating plan – to give people the vision and show them how to get there.

“It should also clarify roles and targets, including how their roles relate to others’, so they can see what part of the jigsaw they are in.”

Revisit your people strategy regularly to ensure it aligns with the business as it develops.

Measure and monitor progress against goals, and report these to the leadership team.

Maximise the potential of HR technology, as described above, to help deliver your strategy and boost business performance.

Communicate your strategy via a broad range of channels to keep personnel engaged.

Martin says: “You can’t afford to have just one communication format. You need a mix of informal and formal formats. For example, some people don’t respond well to presentations, but may prefer emails.

“So cascade the message in your strategy to individuals via newsletters, emails, and events.

“Make sure you understand the best media for your organisation and work all channels.”

The final step in creating an effective people strategy is to lead by example.

Creating a blueprint for people success

People strategies are a vital business performance tool that many businesses either undervalue or overlook completely.

As an employer, you may have spent hours creating a powerful business plan and strategy. You may also be proud of the work you’ve done in developing your purpose, values and vision.

But all this effort is likely to be ineffective, or even wasted, if you don’t put the same effort into your people strategy.

People make all these things – strategy, purpose, values and vision – come to life. Your people strategy should be a detailed and well-communicated blueprint for how they do it.