Human resources (HR) strategy is incredibly important to any business.
Although many people associate HR with day-to-day responsibilities such as payroll, benefits administration and employee time and attendance tracking, this is tactical HR and only half of the equation.
HR strategy, on the other hand, guides HR professionals toward reaching business objectives while aligning with company values. It encompasses all those things that prepare a business for its future and add value to the organization. Think of it as your company’s road map for how you will leverage people to intentionally and proactively:
- Avoid potential problems
- Solve present and anticipated future challenges
- Support the workplace culture
- Achieve goals
When executed well, HR strategy is a vital part of any business’s pathway to success. For example, implementing an HR strategy that focuses on nurturing community and employee growth can increase retention, engagement, productivity, performance and profit.
So how does it all go wrong at some companies?
Here’s a list of the most common reasons why HR strategies fail – and what companies can do to get back on track.
Why HR strategies veer off course
1. Not collaborating with senior leadership
Formulating an HR strategy simply can’t happen in a silo. If HR isn’t communicating with senior leaders, how do these professionals know:
- What’s going on in the business?
- What’s the business strategy?
- If they’re focused on the right issues?
- If they’re adequately addressing actual problems with optimal solutions?
- If they’re aligned with the company’s mission, vision and values?
HR leaders should meet regularly – at least quarterly – with senior leaders to confirm that they’re in tune with what’s happening in the business and how it impacts HR.
2. Overcomplicating your HR strategy
HR strategy can cover a lot of components, depending on the business and its circumstances. These components may include:
- Talent acquisition
- Onboarding and offboarding
- Succession planning
- Talent management
- Development and training
- Compensation
- Employee health and wellbeing
- Engagement
- Productivity
- Retention
Of course, it’s not realistic or feasible to focus on such a long list of items all at once. This level of complexity indicates a lack of focus, which can lead to stretched-thin company resources and a paralysis in which nothing meaningful is accomplished on any issue.
Instead, work with senior leaders to identify and prioritize three to four of the most critical areas – those things that will most help the business execute its vision and achieve its goals.
3. Not getting specific enough
HR strategies often begin as high-level, big-picture ideas. For example: Our organization wants to reduce turnover.
But what, precisely, does this mean?
Here are some things you’ll need to consider:
- Why each HR objective is important to the business and which overarching business goal it aligns with
- What success looks like and how it will be measured
- Which tasks and processes are required
- Which HR key performance indicators (KPIs) you’ll use to track progress
- How you’ll know when a goal has been met
- Who is responsible for overseeing each aspect of the HR strategy
Without these details, you’re left with mere aspirations – not a real plan of action.
You’ll also lack the means to:
- Confirm whether your organization has accomplished its objectives
- Demonstrate the value of HR to senior leaders
4. Trying to replicate what other companies have done too closely
It can be tempting to research what your competitors have done to achieve positive outcomes and attempt to copy their actions one for one. However, what works at one company may not work at others.
This is because organizations:
- Vary in size
- Fluctuate in budgets and resources at their disposal
- Have unique operational needs and circumstances
- Aren’t consistent in culture or people
- Exist at different stages of maturity
Although it’s certainly not a bad thing to compare your company to its peers and draw inspiration from other organizations to create and execute an HR strategy, first consider how your business is different and make adjustments as needed. Remember: This is about your organization – where it is currently and how you can get where you want to go.
Rather than simply repeating what other companies have done, also take these actions:
- Gather data specific to your organization, including people trends
- Perform a gap analysis of HR infrastructure versus business needs and goals
- Conduct a SWOT analysis
- Assess your culture, resources, operations, processes and budget
- Re-evaluate current goals
- Confirm that you have the right people in the roles that best leverage their knowledge and skill sets
5. Offering solutions first
HR must understand the business problems that need to be solved to ensure that the HR strategy addresses them. In other words, don’t solve for the wrong challenge or enter a conversation about HR strategy fixated on a preconceived solution that may not be appropriate.
Instead, be open-minded and solution-agnostic at the outset of an HR strategy discussion. Listen and understand first; offer solutions later. It’s as simple as asking the question: What is it, really, that we’re trying to solve?
6. Favoring the tactical over the strategic
When it comes to the individual components of an HR strategy, many companies focus on the tactical pieces of implementation that can lead to point-in-time events or tasks rather than serving the overall employee life cycle and journey at work.
As examples:
- Companies focused on attracting top talent may fixate on writing job descriptions or creating an onboarding process instead of more strategic, future-focused initiatives that carry long-term value, including building a steady pipeline of job candidates and engaging in succession planning.
- Companies that want to prioritize learning and development could deploy the ubiquitous, scheduled group training. But this approach misses so many other opportunities in the learning space, including self-paced training, experiential training, gamification and recognition at milestones.
7. Overlooking HR technology
Lack of HR technology means relying on manual processes and conducting HR activities in a less efficient way. How does this impact HR strategy?
- HR technology can be a critical resource for information and analysis. In its absence, it can be more challenging to evaluate data, identify trends and track progress toward business goals.
- Technology enables HR personnel to do their work faster and more accurately.
- It can improve the recruiting and hiring process.
- Technology can deliver a better employee experience, from onboarding to accessing benefits and services, and completing training and development programs.
HR technology can be overlooked by senior leaders on the grounds that it’s not a driver of new business or because they want to allocate the funds to enhance technology toward client-facing initiatives. HR leaders should work with senior leaders to explain the value of technology and its role in implementing HR strategy.
8. Not communicating the strategy
Not announcing the HR strategy to the workforce is a big mistake. After all, no one can read your mind and infer what they should be doing to help support HR and business strategies.
Explain to employees:
- What their responsibilities and personal goals are
- Why their work is so important in supporting the business
- How their actions impact the team
Get their buy-in and enthusiasm so they’ll be your ally in making progress and accomplishing targets.
Summing it all up
HR strategy is critical in preparing organizations for the future, solving challenges and reaching business goals. HR strategy is also the bedrock for successful HR processes, enabling any organization to function seamlessly and prepare for potential disruption. Intentional planning to support critical HR areas – recruiting, hiring, training and development – all nurture a healthy company culture full of satisfied employees.
However, many HR strategies fail because companies often make the same mistakes, from lack of a concrete plan to no communication with senior leaders or employees, focusing on way too many things at once, and fixating on solutions that are misaligned with actual problems. Here, we’ve outlined these missteps and offered tips for HR and business leaders to correct them.
For more information about cultivating an HR function that’s well equipped to help your company reach its strategic goals, download our free e-book: HR outsourcing: An essential guide for fast-growing businesses.