What is “People Strategy”?

What is People Strategy?

To understand what People Strategy is, it is important to understand business first. People Strategy is not the same as HR Strategy and HR Strategy that has been developed and implemented without being aligned to an organisation’s People Strategy is prone to failure.

People Strategy may be written down, or may just exist unwritten, as part of the overall business strategy. HR Strategy is then (or should be) developed to follow and deliver elements of the wider People/Business Strategy.

So what happens when you put the cart before the horse – when you implement an HR Strategy before working out and articulating your People Strategy?

 “A People Strategy helps to direct the investment in talent and the programs to manage them. Companies without an articulated strategy run the risk of developing programs that don’t meet organizational needs or further the business. For example, a large consumer products company launched a people management “best practices” study and instituted most of the practices, unconnected to the business strategy or particular business issues. The adoption of best practices became the focus and drove most of the people priorities. Unfortunately, many of the “best practices” didn’t work as well for this company as they did for others. As a consequence, company performance lagged competitors by more than half.“

Does Your Business Need A People Strategy? By Jim Kochanski and Peter LeBlanc

But what is it?

Put very simply, a People Strategy is what a business needs to ensure that it has the right talent, in the right places, displaying the right behaviours, and delivering the right performance outputs, within budget.

A People Strategy is a set of specific, prioritized choices about where and how to invest in human capital. Choices may include:

    • Employee groups to grow or shrink
    • Skill sets to invest in
    • Performance levels required
    • Number of employees needed to achieve required productivity and service levels
    • Types of work to in-source and outsource
    • Total reward strategy that defines the employee value proposition
    • Cost base associated with different segments of employees
    • A People Strategy is owned by business leaders, and it is viewed as critical to executing business strategy successfully.

Does Your Business Need A People Strategy? By Jim Kochanski and Peter LeBlanc

Why does it matter?

To succeed businesses need the right talent, in the right places, displaying the right behaviours and delivering the right performance.

For the vast majority of businesses and organisations, people are both an essential resource and a significant liability at the same time (both in terms of finance and risk generally). People are also often an opportunity; and productivity generally comes down to people (at least until we are all replaced by robots).

People are therefore an essential element of any commercial development or group development plans, in respect of organic or inorganic growth, in that they can make or break a growth strategy.

How do we create a People Strategy?

There is a growing trend of successful businesses publishing nice and shiny “People Strategy” documents, and this is generally great for their brand, consistency of values, employee engagement and overall business alignment.

The reality though is that these documents are not dreamt up in isolation. They overlap significantly with branding, market positioning and communications considerations, so in order to be effective they must be formulated alongside other key strategic considerations such as growth objectives, growth strategy, finance, asset base and risk. These are clearly commercially sensitive areas, and as such it is typically only parts of the People Strategy that are actually published.

In formulating those strategies it is important to have the right mix of advisers “at the table”. Representation from Finance, Commercial, Technology, Legal, and HR should all be there to support the business leaders formulate the strategy.

The focus of the legal support in relation to the People Strategy element should be to advise and support the business, utilising their experience and legal grounding to ensure that strategies are appropriate and that solutions are robust and suitable in the circumstances. This should be done by providing direction, tools and resource to help the business identify its “people” objectives and reach its intended goals.



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