What is Human Resources Strategy?

What is Human Resources Strategy?

Introduction: What is human resources strategy?

A human resource strategy is an organization's plan for managing employees in a way that promotes its overall mission. [Read] Human resource strategy maximizes an organization's human capital potential to achieve its larger business goals. Human resource strategies help the organization to manage people in a way consistent with the firm's general aims. [Read] Understanding how to develop a plan for your firm may help you recruit the best employees, increase retention, and boost productivity.

Related: How to Strategically Manage your Human Resources

According to Gartner, a human resource strategy defines which HR and workforce practices and activities to pursue and improve to deliver business outcomes. Human resource strategy matches the human resources department's goals and operations with the organization's overarching objectives and vision. According to Ratton and Gold (2012), a human resource strategy is a strategic approach to managing employment relations which emphasizes leveraging people's capabilities and commitment to sustainable competitive advantage.

A human resources strategy is a detailed plan that defines how a company manages its staff to achieve its business goals. It includes developing, executing, and assessing policies and procedures that impact employee recruitment, development, retention, and performance. The ultimate objective of a human resources strategy is to establish practices that help the organization win in the marketplace. It entails matching HR operations, policies, and processes with the firm's broader strategy.

Related: What are the 3 Pillars of HR Strategy?

What is human resources strategy: Importance of having a human resources strategy?


When answering the question, what is human resources strategy? One has to factor in the importance of human resource strategies. SHRM sites that the more accurate the alignment between human resources and an organization's entire business strategy, the greater the company's ability to anticipate and respond to consumer demands while maintaining a competitive edge. Extensive study, planning, and development of worker culture, habits, and skills promote the successful implementation of corporate strategy.

A study by Ebrahim Nafari & Behrooz Rezaei shows that human resource strategy is linked to organizational performance. In this study, it was shown that there is a significant positive correlation between human resources strategies and organizational performance. A study done by Bersin found that companies with great talent acquisition strategies had 18% higher revenue.

A McKinsey & Company's Diversity Matters report (2020) discovered that organizations with diverse senior managers have a 36% chance of outperforming those without. An HR strategy focused on employee training and development may improve performance and productivity, increasing revenue and growth. Employee turnover may also decrease by improving employee engagement, job satisfaction, and work-life balance.

A human resources strategy can help an organization to:

  • Improves its reputation and brand image as a preferred employer
  • Improves consumer happiness and loyalty by providing high-quality products and services.
  • Increases innovation and creativity by cultivating a learning and collaborative culture.
  • Lowers expenses and risks by reducing employee turnover, absenteeism, disputes, complaints, litigation, and compliance concerns.

Related: Does the HR Strategy matter?

What is human resources strategy: Key Components of Human Resources Strategy?

The organizational strategy serves as the foundation for the HR strategy. The HR strategy covers all of the important aspects of human resources. These key components include recruitment, training, performance evaluation, remuneration, and succession planning.

Talent acquisition is the process of identifying, selecting, and employing suitable people for various jobs within a business. Identifying the organization's current and future needs, finding and screening possible individuals, conducting interviews and assessments, making offers and negotiating contracts, and onboarding new personnel are all part of talent acquisition.

Yet another key component to note is training and development, which is as well incorporated into the human resource strategy. It provides employees with chances for learning and growth to improve their skills, knowledge, and performance. It covers designing and implementing training programs.

Retaining high-performing and high-potential individuals in the organization is another key component of a human resource strategy. This key component is creating a great work environment, giving competitive wages and benefits, recognizing and rewarding employee successes, providing feedback and performance assessments, and resolving employee problems and grievances.

Human resources strategy

How to create a human resources strategy

A human resources strategy is a plan that matches an organization's human capital with its commercial goals. It addresses all major HR issues, including recruiting, performance management, development, remuneration, and succession planning.

Related: How do you develop your Human Resources Strategy

To develop a human resources strategy, follow these steps:

Step 1 Understand your organization's objectives



An effective human resources strategy is intimately related to organizational goals. Collaborate with management or executives to describe the company's short- and long-term growth objectives.

Step 2. Evaluating the Work Staff

Perform a skills inventory for every employee to determine which individuals are skilled in specific areas. This may help you better understand how your employees can contribute to the company's objectives. It also helps you recognize your company's strengths, which you can use to craft a more specific and effective HR strategy.

Step 3 Perform a SWOT analysis.

After evaluating individual employees, conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis. This is a strategic planning technique used to identify areas where you can help the company grow. You can use this analysis to leverage your company's strengths to capitalize on market opportunities.

Additionally, by identifying threats and weaknesses, you can devise a plan to overcome them or minimize their impact.

Related: SWOT analysis: Everything you need to know

Step 4 Assess your future HR needs.

Next, evaluate what you will need from employees in the future to capitalize on opportunities, minimize threats and achieve company goals. You should be able to determine:

  • Which new jobs you will need to fill
  • Which skills will current employees need to obtain to fill the new jobs
  • Whether you're sufficiently utilizing the abilities of your current employees
  • Whether your current HR professionals and the hiring practices they use can accommodate the necessary growth

Step 5 Evaluate whether additional tools are necessary

Determine whether there are tools available that would enable your employees to do their jobs more effectively. In this step, one should work with the information technology department to audit your company's hardware and software. Scheduling, project management and goal setting can help a team coordinate efforts and improve productivity. There are numerous productivity tools available to teams, such as:

  • Recruitment tools: Finding the right candidates can be a breeze with modern platforms that connect human resources managers with companies seeking to boost their practices and outsource new talent.
  • Employee recognition platforms: Similar to social media, these apps allow employees to be applauded for their achievements within the workforce and can offer an easy way for team members to communicate via text.
  • Enjoy light-speed communication across teams and platforms: With programs such as popular Slack, employees can instantly message each other using a wide range of platforms and share the projects they're working on. Conversations and documents are easily searchable, improving productivity and reducing the need for team meetings.
  • Identify top candidates and verify their skills online: Save time reading resumes by screening recruits before any paperwork needs to be completed by your HR department and find the most highly trained talent to join your team. Reduce the number of under qualified applicants with programs such as Plum.io, which creates standardized tests for individuals to complete during the application process.
  • Use time management software to streamline HR procedures: Implement a digital time clock to make it easier for your human resources team to manage time records and improve attendance. The Hubworks program combines an online timekeeping platform with POS and inventory systems, among other features.

Step 6: Implement your strategy

After you've finished your analysis and completed an assessment of what you need, it's time to start expanding your workforce and developing the skills of your current employees to meet the company's needs better. Implement your HR strategy by doing the following:

  • Recruiting applicants: Search for candidates with the skills you identified during the analysis phase.
  • Organizing a selection process: Interviewing and identifying the right candidates are essential components of the process. You'll need to select relevant questions and tests to evaluate candidates and their abilities.
  • Hiring candidates: After completing the necessary background checks, extend offers to the most qualified candidates.
  • Designing an onboarding program: An employee onboarding program can improve retention and help new hires feel confident in their roles more quickly.

Related: Employee onboarding - Complete Guide

Step 7: Develop an HR monitoring and evaluating framework

Human resources strategies take at least one year to implement because a company needs time to track the success of new policies. Decide on a timeline after which you'll review your progress, identify areas for improvement and evaluate whether the changes are helping further your company's growth. If you determine that your strategy isn't getting you closer to your objectives, identify ways you could make adjustments.

Here are more steps to follow when creating a human resource strategy.

Implementing a Human Resources Strategy

What is human resources strategy: Tips for implementing a human resources strategy effectively?

Implementing a human resources (HR) strategy can be difficult, but some guidelines can assist assure its success. One of the most critical tasks is to integrate the HR strategy with the broader business plan of the firm. This guarantees that the HR strategy complements the organization's goals and objectives.

Another important recommendation is to explain the HR strategy to all stakeholders, including employees, managers, and leaders. This helps ensure that everyone knows the HR strategy's aims and objectives and their role in implementing it. It is also critical to give employees chances for training and development to assist them in developing the skills required to support the HR strategy.

What is human resources strategy -Common challenges in implementing a human resources strategy and how to overcome them.

Implementing a human resources strategy can provide several problems that firms must overcome to succeed. Some of the most prevalent difficulties and solutions are as follows:

  • Employee and management resistance to change: Employee and manager resistance to change can stymie the execution of an HR strategy. Organizations must convey the benefits of the new strategy and include workers in the planning and implementation process to overcome opposition.
  • Inadequate resources: Implementing an HR strategy necessitates more resources like time, money, and staff. To support the implementation of the HR strategy, organizations must prioritize their resources and guarantee that they are distributed properly.
  • Lack of alignment with the business plan: HR strategies that are not aligned with the firm's broader business strategy may fail to achieve the desired results. To address this, firms must ensure that the HR strategy is designed in partnership with business executives and that it supports the aims and objectives of the organization.
  • Inadequate data: Firms must have accurate and up-to-date worker data to implement an HR strategy properly.
  • Inadequate leadership support: Effective HR strategy execution requires strong leadership support. Leaders must offer the resources, authority, and dedication needed to implement the strategy properly. To address this, firms must ensure that executives understand the importance of human resource strategy and its potential influence on the organization's performance.
  • Ineffective communication: Effective communication is essential for the successful implementation of a human resources strategy. Employees and other stakeholders are unlikely to support the strategy if they do not grasp the strategy, its aims, or its responsibilities in achieving it. Organizations must build a clear and consistent communication plan encompassing many channels and emphasizing essential themes to overcome poor communication.

Frequently Asked Questions on What is human resources strategy

What is the meaning of human resource strategy?

A human resource (HR) strategy is a detailed plan that defines how a company manages its staff to meet its business goals. It entails matching HR operations, policies, and processes with the broader strategy of the firm.

A human resource strategy outlines an organization's approach to workforce management by considering variables such as talent acquisition, employee development, succession planning, performance management, compensation and benefits, and employee engagement.

Why is HR strategy important?

Human resource strategy is vital since it helps to align the workforce with the organization's goals and objectives. Human resource strategy helps to develop a unified and effective staff that contributes to the business's success by describing how the organization manages its employees. A good human resource strategy may assist a business in attracting and retaining top personnel by fostering a healthy workplace culture, providing competitive remuneration and benefits, and giving chances for professional advancement.

It may also boost performance and productivity by giving staff the necessary training and tools to succeed in their professions. Employee turnover may be reduced by boosting employee engagement, job happiness, and work-life balance.

What is HR strategy vs HR policy?

Human resource (HR) strategy and human resource policy are two distinct but connected concepts. HR strategy refers to a company's overall approach to managing its staff to achieve commercial goals. In contrast, HR policies are rules and procedures that regulate how HR operations are carried out.

What are strategic HR functions?

Strategic HR functions include compensation planning, recruitment, succession planning and employee development.

What are four human resource strategies?

  • Limit transactional problem-solving.
  • Be proactive rather than reactive.
  • Provide people-centric solutions to large-scale challenges.
  • Connect people who can solve each other's problems

What are the types of HR strategy?

There are essentially two types of HR strategies – those that are overarching and those that are specific. Overarching strategies apply to managing an organization's people as a whole, while specific strategies address subsets of HR, like talent management or recruitment.

How do you develop a strategic HR plan?

A strategic HR plan can be created by thoroughly evaluating an organization's strengths, weaknesses, opportunities and threats. This is known as a SWOT analysis. Once employers know this information, they can create realistic goals for what they do well and where they need improvement.


Human resource strategy is essential for every business that wishes to fulfil its mission and goals. A human resource strategy establishes how a business will manage its people to achieve its strategic goals. A human resource strategy should be aligned with company strategy and responsive to changing market and labor demands.

Tanyaradzwa Shava
This article was written by Tanyaradzwa a Consultant at Industrial Psychology Consultants (Pvt) Ltd

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