If you want to hit your business goals, you need to be able to attract, retain, and grow top talent within your organization. And the way to do that? By taking a people-first approach to business strategy—also known as people strategy.
The right people strategy can help you accomplish a variety of business outcomes. These can range from filling skills gaps in your workforce to leading innovation in your industry. And as organizations navigate one of the most challenging labor markets in recent memory? Having the right people strategy is more important than ever.
But what, exactly, is people strategy? Why is it such an important asset to your business? And how can you set up the people strategy you need to attract, retain, and grow the best talent in your industry? (And take your business to the next level in the process?)
What is a people strategy?
Before we jump into the benefits of people strategy (and how to build out your people strategy), let’s quickly cover what people strategy actually is.
What is a people strategy?
People strategy is your company’s plan for attracting, retaining, and growing the talent you need for your business, today and tomorrow.
At the most basic level, people strategy is your company’s plan for attracting, retaining, and growing talent. To expand, it’s about how you can best support your employees’ needs and professional growth throughout the employee lifecycle.
People strategy can include a lot of elements. For example, it can include plans to roll out a recognition program to make sure your employees feel valued every day. It might include strategies for improving key people analytics metrics, like employee engagement. Or it can include a plan for upskilling your existing workforce to fill skill gaps and help your employees grow on their career paths. (All of which, in turn, can help your organization improve employee retention).
There are a variety of elements that go into creating an effective, cohesive people management strategy. According to the Boston Consulting Group, the pillars you need for a successful people strategy include:
- Leadership and culture. Have you built a people-centric company culture within your organization? And does your leadership reflect those people-first values?
- Talent and skills. Does your organization have the talent and skills necessary to succeed? And, if not, do you have a plan for attracting that talent and building those skills?
- HR. Is your HR team equipped to build, support, and grow your people strategy?
People strategy versus human resource strategy
Defining people strategy is important. But so is defining what people strategy is not. And, more specifically, how it differs from another type of business strategy you’re probably familiar with—HR strategy.
Now, there’s definitely some overlap between HR strategy and people strategy. For example, both strategic initiatives are led by HR leaders and both have the end goal of creating a better experience for employees.
But there are also differences between the two that are important to note. And the most important difference is what each strategy is ultimately responsible for.
HR strategy is focused more on logistics. It focuses on creating a plan to manage the more logistical side of human resources management. This might include things like onboarding procedures, evaluating benefits, or revamping compensation structures.
People strategy is all about talent management. Or, in other words, better managing your human capital. It’s about creating a positive environment for employees, and helping them grow professionally and personally. One of the hard parts about people strategy is supporting people now while also staying focused on the types of behaviors, skills, and capabilities you're going to need in the future.
This might include things like leadership development and helping to grow your best managers. It might mean creating performance management plans to help employees articulate and hit their career goals. Or it might mean spearheading employee wellness initiatives (like company-sponsored gym subscriptions).
Some other responsibilities that might fall under the HR or people strategy umbrella include:
HR strategy
- Creating processes (for example, sourcing, payroll, interviewing, or PTO)
- Creating org charts
- Creating compensation plans
- Managing employee files
- Managing compliance
People strategy
- Creating employee growth and development plans
- Diversity hiring initiatives
- Fostering better cross-functional communication
- Driving and shaping company culture
- Collecting employee feedback and using that feedback to improve workplace experience
- Planning team events to foster belonging and inclusion
Benefits of an effective people strategy
Now that you understand what people strategy is, let’s jump into how it can benefit your team and organization.
Some of the major benefits of an effective people strategy include:
1. Increased employee engagement
People strategy is all about investing in your employees. Investing in their happiness, in their employee experience, and in their growth.
And when you invest in your team, they’re going to be more engaged with their work and with your organization. And that engagement translates to a host of positive outcomes.
For example, according to the State of the American Workplace Report from Gallup, employee performance improves with engagement. Engaged employees are 17 percent more productive and have 41 percent lower absenteeism and 10 percent higher customer satisfaction metrics than disengaged employees. And according to research from Deloitte, when employee engagement increases, employee retention also—by up to 87 percent.
2. Makes it easier to attract top talent …
When you invest in people strategy, you’ll build a reputation as an organization that truly cares about their employees. And that kind of employer brand makes it easier to attract the best talent in your industry.
For example, let’s say an individual contributor is interviewing with your company and your top competitor. Your competitor isn’t doing much in the way of people strategy. But during the interview process, your hiring manager can share all the ways your organization is investing in their people. (For example, your corporate wellness initiatives, leadership development program, and company-sponsored education opportunities.)
Which company do you think that IC is going to be more interested in?
3. … and keep them with your organization
People strategy can help attract talent to your company. But it can also help keep them there.
When employees feel like their employer is truly invested in them and their success, they’re more invested in their employer. Because they feel supported and are having a positive experience at work, they’re less likely to want to leave or look for a new job. This leads to increased employee retention. Which, in turn, leads to better business outcomes for your organization.
How do you set up a people strategy?
Clearly, having an effective people strategy is a must. But how, exactly, do you set up that people strategy?
1. Define how to support your employees at each point of the employee lifecycle
If you want to create an effective people strategy, you need a strategy for every point in the employee lifecycle.
When developing your people strategy, think about how you can improve your employee experience across the board. For example, how can you improve experience when employees are interviewing? Once they're hired? Once they've been at the company for 1, 3, or 5 years? And how can you create a positive offboarding experience for exiting employees?
2. Create employee development plans
A key part of a successful people strategy is identifying clear ways to develop your employees and help them grow in their careers. And one of the best ways to develop your workforce and foster their professional growth? Creating employee development plans.
Have your managers meet with their direct reports to talk about their career goals. Then, have them help the employees create a plan for how to get from where they are now to where they want to go. And the more specific the plan, the better.
For example, let’s say you have a marketing assistant that wants to grow into a marketing manager role. In that situation, you’d want to identify what skills they need to develop in order to get promoted. (For example, they may need to gain experience managing people or learn how to use your company’s marketing analytics software.) You’d also want to help them create a timeline and set goals and metrics to monitor their progress.
Once the development plan is in place, make sure managers are meeting with their employees regularly to discuss progress. (And that they're adjusting the plan as necessary.)
3. Invest in learning and development opportunities ...
BetterUp has trained peak performance coaches to help your organization thrive. The well-being and health of your workforce is worth investing in.
When employees thrive from coaching, teams are more productive, see higher employee retention, and are more likely to recover from setbacks. Our data also reports that virtual coaching increases employee satisfaction. In addition, employees are less likely to experience mental illness.
4. ... and well-being initiatives
In order for employees to have a positive experience at work, they need to feel their best. So, if you want to support your employees, you should definitely make wellness initiatives a part of your people strategy.
Look for ways to invest in your employees’ mental, physical, and emotional health. For example, you might host a weekly yoga class for employees. You might change your benefits plan to a plan with expanded mental health coverage. Or you might offer employees a weekly meal stipend to invest in healthy, nutritious foods to promote mental and physical health.
The point is, when employees feel their best, they do their best work. So employee wellness should be a non-negotiable part of every people strategy.
Looking to better support your employees’ mental health? BetterUp can help.
5. Ask your team for feedback
If you want to know what kind of people strategy would best support your team, the best thing you can do? Ask them.
Regularly ask your team for feedback on how you can improve their experience at work. (For example, you can send out employee surveys. You can ask for feedback during one-on-one meetings. Or, if you have a topic that impacts your entire team, you can host an all-hands meeting to ask for feedback.) Then, take that feedback and use it to make the improvements that are going to matter most to your employees.
Create (and iterate) the strategy your business needs
Create a people strategy that empowers your team—and takes your company to the next level
The right people strategy can help you attract, retain, and grow top talent. And that talent can have a huge impact on your organization’s success. So, if you want your company to succeed, invest in your people. Craft a people strategy that makes your team feel supported, valued, and appreciated. And watch your company thrive as a result.
-1.png)
