YOUR PEOPLE STRATEGY IS YOUR BUSINESS STRATEGY

As someone who has spent years partnering with executives and business owners, there has often been a common theme. When leaders talk about growing their business, they don’t usually start the conversation by talking about their HR function.

Their focus tends to be on increasing revenue, improving profitability, expanding into new markets, enhancing customer experience or becoming more efficient. Every one of those business objectives depends on one thing: having the right people in the right positions, doing the right work.

That’s why HR might possibly be the most important business strategy within your organization. Every hiring decision, leadership investment and workforce decision has a direct impact on a company’s financial performance.

START WITH THE BUSINESS GOALS

The best HR strategy includes more than just benefits, policies or compliance. It needs to start with asking one question: Where is the business going?

If your goal is to double revenue over the next three years, your workforce strategy should look different than if you’re focused on improving profitability or preparing for an ownership transition.

Your people strategy should be intentionally designed to help you achieve your business strategy.

BUILD A CULTURE THAT DRIVES PERFORMANCE

Culture is about creating clarity within the organization. People want to know what’s expected of them, how success is measured, and how their work contributes to the bigger picture.

Clarity provides employees with the confidence to make decisions and take ownership of their work. Sense of ownership gives people purpose and helps drive stronger engagement.

HIRE FOR TODAY. DEVELOP FOR TOMORROW.

Hiring the right people into the right seats will always be one of the most important investments a business makes, but workforce planning shouldn’t stop once someone accepts an offer.

The most successful organizations are constantly asking:

• What skills are we missing today?
• What capabilities will we need in two or three years?
• Who can we develop internally?
• Where do we need outside expertise?

That strategy may include leadership development, cross-training, internships, outsourcing specialized functions, partnering with a recruiting firm or creating succession plans for critical positions.

There typically isn’t one right solution. Most often, it’s a combination of options. Having the knowledge and understanding of how to align your business objectives with how you will obtain the right talent and skills is an important piece of your business strategy.

HR SHOULD IMPROVE BUSINESS OUTCOMES

The most effective HR strategies are measured by business outcomes, not HR activities.

Hiring faster only matters if it enables growth. Leadership development only matters if it builds stronger leaders who can execute the company’s strategy. Employee engagement only matters if it translates into better performance, stronger retention and a better experience for customers.

Too often, organizations evaluate HR by what it does instead of what it delivers.

Strategic HR should influence the metrics every executive cares about: revenue growth, productivity, profitability, retention, operational efficiency and the organization’s ability to adapt and scale.

When people strategy is aligned with business strategy, HR stops being viewed as a support function and becomes a competitive advantage.

BUSINESS ACUMEN IS THE FUTURE OF HR

One request I’ve heard repeatedly from executives over the past several years is: “We don’t just need an HR leader. We need a business leader who happens to have deep HR expertise.”

I couldn’t agree more.

Today’s HR leaders need to understand financial statements, operational challenges, workforce economics, organizational design and growth strategy just as well as they understand employment law and talent management.

When HR leaders understand how the business creates value, they make better decisions about hiring, leadership development, compensation, workforce planning and organizational effectiveness.

They become strategic advisors instead of administrative partners.

Whether your organization has 50 employees or 500, your workforce can be one of your greatest competitive advantages. Successful businesses will invest in more than technology or operations. They’ll invest in building a workforce strategy that aligns with where the business is headed.

Your HR function is one of the most powerful drivers of growth, profitability and long-term success. At the end of the day, every business strategy succeeds or fails based on the people responsible for executing it.