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People Strategy: How to Build One? + Examples of Effective People Strategy + More! 2024 

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2023 is definitely the year in which HR is replaced by People & Culture. With the dramatic changes that came after recruiting Gen-Z employees, and seeing their take on employee loyalty and quiet quitting, all organizations are trying to hold a more people-oriented approach in their strategies.

That’s why today, we’ll talk about people strategy –a topic that’s not only crucial but also fascinating in the modern workplace setting.  

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What is a People Strategy? 

In a nutshell, a people strategy is all about creating a well-thought-out plan to manage the talent within your company. Creating a well-structured people strategy comes with various aspects like talent acquisition, employee development, performance management, and fostering an empowering work culture.

Think of it as the secret weapon that will help you build strong, engaged, and high-performing teams and retain the best talents. Your organization needs a people-oriented framework in order to create a path for developing talent, promoting diversity and inclusion, and create new leaders.  

Do you really need a people strategy? 

We hear you asking if you really need a people strategy, and in fact, we’re asking you: why don’t you still have one?  

Now, you might wonder why having a people strategy is that crucial in the first place. Well, here’s the deal: Your people are the backbone of your organization. Your employees are the ones who drive innovation, deliver exceptional customer experiences, and ultimately shape your company’s success. 

So, people strategies are not just about having a bunch of skilled employees on board; they are about using their talents and aspirations to reach company goals and help them develop professionally. 

I am convinced that nothing we do is more important than hiring and developing people. At the end of the day, you bet on people not on strategies.

Lawrence Bossidy

As the former-CEO of AlliedSignal Lawrence Bossidy said, employee development is the key factor in attracting and retaining top talent. As you hold a more human-focused approach and stop seeing open positions as just space to fill, you’ll have the basis for your strategy.

Having a well-crafted people strategy is a great way to make sure your workforce is not only motivated and engaged but also equipped with the right skills to tackle any challenges that come their way. And trust us on this: when your people thrive, your entire organization thrives! 

People Strategy vs. HR Strategy 

Speaking of people and culture replacing HR, let’s talk about the difference between HR and people strategy. Although they might sound like the same thing, people strategy and HR strategy are not two interchangeable terms. 

At its core, people strategies focus on the holistic management of talent and human capital within an organization. A well-defined people strategy goes beyond traditional HR procedures and emphasizes the development of a positive company culture, talent acquisition, talent development, employee engagement, and even succession planning.  

On the other hand, we can say that HR strategy is a subset of the broader people strategy. While people strategy deals with the overall alignment of talent within a company with its vision, HR strategy priorities are practices related to human resources management.

HR strategy dives deep into areas like compensation and benefits, employee performance management, training and development programs, and compliance with employee performance evaluation laws and regulations.  

So, What’s the Difference? 

In essence, the key difference lies in their scope and focus. People strategy looks at the bigger picture and sets the direction for talent management across the organization. HR strategy, on the other hand, hones in on the day-to-day HR operations and policies that directly impact employees. Both are essential for a thriving organization, and work hand in hand to create an environment of development.

HR strategy includes:

  • Hiring
  • Payroll
  • Compensation plans
  • Compliance
  • Organizational charts
  • Employee files and documents

People strategy includes:

  • Diversity and inclusion strategies
  • Employee development plans
  • Team building activities
  • Company culture
  • Cross-functional team management

How to Build a People Strategy?  

Building an effective people strategy is not a one man’s job, it’s a process in which you should work collaboratively with your HR team, your people & culture team, C-levels, and team leaders. We are aware that not every organization needs complex strategies for managing people, but almost all good people strategies have a few component in common.

Also, we should remind you that people strategy is not something you can build and forget about it forever. As your organization grows, develops, and changes, so should your strategy. You should reevaluate and make changes as needed through this journey.

What should a people strategy include? 

five features of effective people strategies

A people strategy should include some people. And a strategy. That’s all you need.

Okay, jokes aside, the best people strategies include several components that make them successful. We can divide the distinctive features of an effective people strategy into 5 categories: employee engagement, performance management, employee development, DEI and recruitment, and goal alignment. Let’s look at these components in more detail:

Prioritizing employee engagement and well-being

The first and the foremost feature of a good people strategy is prioritizing employee engagement and well-being. As the name suggests, people strategy is all about your people, and their well-being and engagement is key to an effective strategy. You can promote work-life balance, offer well-being initiatives and flexibility, and implement employee recognition programs.

Having a healthy feedback cycle

Without a sturdy performance management system and a continuous feedback cycle, you can’t expect to have an effective strategy where your employees could develop and learn. Promote open and honest feedback throughout your organization, and make a habit of gathering/giving feedback regularly.

Promoting employee development

If you want your organization to stay relevant and competitive, your employees should not just run around in circles. Continuous learning and development is key to having successful employees that will thrive in their roles, and a healthy strategy should emphasize the importance of growth.

Prioritizing DEI initiatives and talent acquisition

DEI, or diversity and inclusion, is the backbone of any successful organization. According to PwC’s People strategy for the digital age study, 85% of CEOs who had a DEI strategy told that having it helped improving business performance. Make sure you are using DEI and attractive job descriptions in the hiring process.

Emphasizing alignment with organizational goals

People strategy is not just all about employee engagement and retention. Your whole organization will be affected from the strategy you create, so that’s why you need to create one that aligns with your organization’s goals. A good people strategy prioritizes goals and tasks and helps your organization to get results.

Steps to build a people strategy  

Now, we’ll answer the question of how to build a people strategy. As a starting point, we recommend following the three questions suggested by Boston Consulting Group.

The first question is, do you have the culture and leadership you need in your organization? If your answer is no, then think abot what you need to build that culture. The answer can be anything from creating a positive workplace to implementing employee engagement software!

three questions to ask when building an effective people strategy
Source: BCG

The next question is about your people, of course. Do you think your organization has the talent needed to success? Or do you need to recruit more suitable and skilled employees to achieve this? Shape your strategy according to your answer and prioritize the most inadequate part for your organization.

The last question: is your HR/people team equipped to supply the first two? Although we told you that people strategy is not just HR strategy, the backbone of building one is closely associated with your HR team. If your answer is no, think about how you can help your team to succeed in implementing the first two.

Now, let’s look at the steps of building an effetive people strategy:

1. See where you are in the beginning

Before you set off on a new journey, you need to know where you stand in the first place. Start by evaluating your current HR practices, policies, and procedures. In this way, you can see what’s working well and where there might be room for improvement.

Take a close look at talent acquisition, employee onboarding, training programs, performance management, employee engagement initiatives, and any other HR-related areas.

You can use employee feedback for the best results. After all, your employees are the best source of information when it comes to understanding the strengths and weaknesses of your current strategy.

2. Align organizational goals with your strategy

To align your people strategy effectively throughout your organization, you need to have a clear understanding of your strategic objectives. Collaborate with people from all levels of your organizations including top-level management and department heads to create your company’s long-term vision, short-term targets, and growth plans.

After creating a vision your employees will want to take place in, keep organizational goals in mind and determine the people-oriented priorities that will directly support those objectives.

For example, if expanding into new markets is a key goal, talent acquisition and onboarding strategies to attract local talent and build culturally diverse teams become essential. Similarly, if innovation is a priority, focus on employee development programs to nurture creativity and enhance skills.

3. Collect employee feedback regularly

The importance of feedback in the workplace is non-negotiable. No one knows employee experience better than the employees themselves. That’s why in order to build a successful workforce strategy, you need to collect regular employee feedback. Not all of the initiatives you set in the start will work throughout the whole process, and collecting feedback will give you the information on which are working and which are not.

Creating a continuous feedback cycle that promotes open and honest communication will not only give you insight, but also show your employees that you care about their experiences and opinions, increasing employee engagement. And the best indicator of a working strategy is engaged employees.

4. Build a purpose-driven culture

As humans, we all seek purpose. We seek for it in our personal journeys, in our relationships, and of course, in our professional lives. Knowing why you are doing something and what change it will cause are great motivators.

A survey done by McKinsey showed that 89% of respondents need a purpose in their jobs. That’s a huge number! You need to build a purpose-driven company culture that your employees proudly take place and find their purpose in. What are you aiming? What impact will achieving company goals make? Answer these questions for a start.

5. Observe and reevaluate

People strategy is not something you can set and forget. You need to reevaluate and analyze data you got from the feedback collected from employees and managers. PwC’s study also mentions that although 80% of CEOs think that data analytics is an important part of their strategy, only 46% use data to provide insight!

Use data-driven insights provided by an HR analytics software and make changes as needed in your strategy for better results.

Use the Right Tools: Teamflect  

After all these confusing steps and procedures, we know what you’re thinking: building a people strategy is hard work! And while you’re not totally wrong, building the best people strategy for your organization is easier when you have an excellent tool that will assist you.  

If you’re looking for an employee engagement software you can implement in your people strategy, look no further than Teamflect! As it is tailored specifically to work with Microsoft environment, Teamflect offers a seamless Microsoft Teams integration and amazing functionalities.  

Teamflect feedback questions screen with completed and pending feedback
Teamflect’s feedback module

Having amazing integration options and letting you build your strategy without leaving your favorite collaboration tool isn’t Teamflect’s only strength. With its point-based recognition badges and continuous feedback opportunities, Teamflect is the all-in-one solution for every organization.  

You can conduct performance reviews, set OKRs, track goals, hold and analyze pulse surveys, and do so much more using Teamflect. If you’re up for the best performance management tool out in the market, check out Teamflect now.  

As we don’t want to turn this article into a tribute about how awesome Teamflect is, here are other key features of Teamflect:  

Key features:

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Examples of People Strategy

Creating a people strategy for the first time can be challenging, but it’s always a good idea to look at examples for a better understanding. Big companies such as Spotify, Adidas, Hubspot, etc. all have their distinctive strategies for people management, and they set great HR strategy examples.

Successful People Strategy Examples

1. Spotify’s people-oriented, purpose driven approach

As one of the industrial giants in music, Spotify has a people-first approach to their strategy with purpose being equally important. Spotify’s people team encourages continuous growth and development for their employees with a shared vision and mission.

Spotify divides its people strategy into four headings:

  1. Attracting talent: As all companies do, Spotify looks for the best fit when searching for new employees. They don’t adopt an approach that seeks for the “best” talent, in which all academically gifted kids with no creativity. Spotify is all about finding the right talent for the job rather than the best one.
  2. DEI and sense of belonging: Spotify puts belonging next to diversity and inclusion, and makes sure that all employees feel good and belonged in their roles. It’s not just about having diverse teams, but also about being comfortable in the organization.
four tenants of spotify's people strategy
  1. Continuous learning: World changes fast, and Spotify employees should learn faster! Driven by a need to learn and develop, Spotify encourages self-leadership and learning the job on the job -without micromanagement!
  2. Growth: Although growth can be seem similar to learning, it’s much more than that. Spotify offers leadership programs to help their employees grow in their roles and become their next leaders, managers, and even C-levels!

2. Adidas’ “Own the Game” strategy

Adidas also has a people-oriented strategy, with an emphasis on performance and leadership. Their strategy relies on three pillars: leadership, betterment, and performance. The main goals of Adidas’ strategy are as follows:

  • Attracting and retaining skilled talent
  • Growing leaders
  • Creating the best employee experience
  • Encouraging continuous learning
  • Employee recognition and rewarding
  • Prioritizing DEI

As a new addition, they conducted a “Employee Listening Survey” in 2022 to measure employee engagement levels of all employees, globally. This huge survey got a respond rate of 72%, and the overall engagement score was 70%.

3. Microsoft’s employee thriving measurement

Microsoft has maybe the strangest approach to their people strategy. In an interview by Harvard Business Reviews, they stated that they don’t measure employee engagement. Rather, Microsoft measures employee “thriving” levels!

So, what does Microsoft consider thriving? According to them, thriving means to be energized and empowered to do meaningful work. In the company-wide survey they held, Microsoft noticed a difference and a similarity between thriving and non-thriving employees. Both were mentioning culture, but in the opposite ways.

Thriving employees mentioned collaborative work, good communication with teammates, inclusivity, and flexibility. They could pursue open and honest communication with a focus-oriented approach in the organization.

On the contrary, non-thriving employees mentioned lack of collaboration and micromanagement. They felt trapped. That’s why Microsoft has a culture oriented strategy that makes employees thrive.

Still reading?

If you made it this far, we can assure you: you’ll create the best people strategy out there! With the right amount of performance and engagement, using steps we covered, and of course, the help of Teamflect, your strategy will work out seamlessly.

If you’re interested with Teamflect, give a shot at us! You can schedule a free demo and enjoy using Teamflect for free up to 10 users.

Written by Ezgi Cullu

Ezgi is a content writer and HR enthusiast working in Teamflect. Her goal is to provide creative uptakes on HR trends all over the world as a Gen-Z employee.

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