Strategy is a word for achieving success. The word’s origin goes back to Ancient Greek, stratēgía meaning command of a general.
Fast forward to today, and it has evolved to mean planning and directing large-scale operations to achieve a specific goal, which is the essence of modern strategic planning for success.
In this context, people strategy definition would simply be focusing on the success of people within an organization to achieve overall business goals.
But in reality, it’s far more complex and multifaceted. Thus, proper people strategy meaning involves attracting the right talent, nurturing them with meaningful opportunities, and retaining them.
Today, we’ll explore what a people strategy is, how to build one, and look at some real-life people strategy examples!
Table of Contents
What is People Strategy?
People strategy is an umbrella term that encompasses all the plans and practices an organization uses to attract, develop, manage and retain talent. According to Mercer, it is the most important competitive advantage for organizations.
Essentially, a people planning aims to ensure that the right people are in the right roles, are motivated and engaged, and are equipped with the skills and support needed to achieve the organization’s goals..
To provide more context to these broad objectives, the Global Talent Trends 2024 report reveals that what makes employees thrive at work can be broken down into 5 categories:
- Financial stability: Competitive compensation and benefits are crucial, but employees also seek long-term financial security. They value stability and opportunities for financial growth over just making ends meet from paycheck to paycheck.
- Psychological Safety: Employees look for organizations where they can be authentic and practice autonomy. A supportive environment that encourages authenticity and autonomy fosters trust and productivity in employees.
- Sense of purpose: Employees want to feel that their responsibilities contribute to a worthwhile mission and find their work fulfilling. They are more likely to succeed within the organization if they have a sense of purpose.
- Skills growth and job security: Employees want to feel secure in their careers and know they have room to grow. Embracing a partnership approach in employment and offering development opportunities cultivate long-term, mutually beneficial relationships.
- Digital enablement: Organizations need to be digital-first and equip employees with necessary technology. Employees expect that the technology in their organization will empower them to perform at their best.
And there is no doubt that a future proof people strategy should encompass each category.
Components of People Strategy
A people strategy with a strong focus on people and culture emphasizes creating a work environment where employees feel valued, engaged, and aligned with the organization’s mission and values.
The components of people strategy are intersectional with human resources and integrate into every aspect of HR practices.
Any mismatch can lead to setbacks in the people strategy; for this reason, the components should be actionable across the organization.
Organizational values and culture
Organizational culture doesn’t have a one-size-fits-all definition because an organization’s values lie at the heart of its culture. As values differ, so does the definition of culture, and an organization’s commonly shared values tend to shape its culture.
As highlighted in SHRM’s toolkit for Understanding and Developing Organizational Culture, a strong organizational culture leads to three key outcomes: employees understand how management expects them to handle various situations, they view this expected response as appropriate, and they recognize that following these values will be rewarded. Read more about organizational culture from SHRM.
Based on SHRM’s toolkit and the global talent trends 2024 report, it’s clear that a people strategy focused on a people-first culture, with emphasis on diversity, equity and inclusion, and diversity management is vital for success. When employees feel represented and protected within the organizational culture, their actions become intentional rather than forced.
Employee Experience
Employee experience reflects organizational culture from recruitment to an employee’s last day and is a natural extension of culture when developing a people strategy. So, what does employee experience encompass?
- Recruitment and onboarding: These two stages are the early indicators of employee experience. They represent the first touchpoints that shape the trajectory of an employee’s journey, setting the stage for employee engagement, integration, and overall success.
- Employee Engagement: Employee engagement shows how employees are motivated and feel productive in a workplace. High employee engagement rates mean higher productivity, lower turnover rate, and a positive workplace where employees feel supported and see a opportunities for growth.
- Professional Development: Offering employees talent development plans, training and resources to build and improve skills are crucial part of employee experience.
- Work-Life Balance: Policies and practices that offer flexibility in work hours, work options, and support for personal responsibilities contribute to overall well-being. Those who can effectively balance work and personal life are more likely to stay satisfied and committed to their roles.
Leadership and Management
Leaders in an organization inspire and guide employees toward a shared vision, while managers focus on planning and executing the steps needed to reach that vision. The roles of both leaders and managers are essential in a people strategy as they help instill a sense of purpose in employees.
Let’s not forget leadership and management are skills, and they are adaptable and can be continually refined and improved to align with evolving strategies. Investing in the development of current and future leaders and managers strengthens the overall people strategy, ensuring alignment with organizational goals.
Technology and Analytics
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.
Digital enablement, highlighted earlier among global talent trends, is equally relevant to people strategy. Practical application, rather than buzzwords, is key here.
Evaluating the success of a people strategy involves various metrics, and digital tools can streamline tracking and analysis. This reduces time spent on logistics and allows more focus on making improvements.
Metrics and their assessment depend on the organization’s structure and decision-making processes, but here are some fundamental ones to start with:
- Engagement scores: Indicates overall employee engagement and commitment.
- Turnover rate: Tracks the percentage of employees leaving the organization.
- Time to fill: Indicates the average time required to attract and hire for a position.
- Training completion rate: Percentage of employees completing training and programs.
- Job satisfaction scores: Measurement of employees’ satisfaction with their roles.
- Employee productivity: Measures output per employee or departmental productivity.
- Diversity metrics: Representation of various demographics within the organization.
- Absenteeism rate: Measures how often employees are absent over a specific period.
People metrics are not always easy to break down into formulas, so digitizing data collection and analysis can help create more transparent and fair assessments.
People Strategy vs. HR Strategy
People Strategy and HR Strategy, while closely related, focus on different aspects of managing an organization’s workforce.
Let’s circle back to the components of people strategy with a simple analogy: leadership and management reflect the relationship between people strategy and HR strategy.
People strategy acts as the leader, setting the vision, values, and goals for the organization, while HR strategy is like the manager, responsible for planning and executing the actions needed to achieve those goals and ensuring consistent communication of the organization’s values.
On the other hand, HR people strategy is more tactical and operational. It deals with the specific practices and processes HR will use to implement the people strategy. This includes handling day-to-day functions like recruitment, compliance and performance management.
For instance, one of the common HR strategy examples is adopting a performance review software that includes regular feedback, goal setting, and employee development plans.
Together, they form a comprehensive approach to workforce management, with people strategy setting the direction and HR strategy ensuring that direction is achieved.
People Strategy Examples
It’s time to take all the learning into real people strategy examples. This transition from theory to practice will help us understand how these strategies can be implemented, tailored to specific organizational needs, and adjusted based on actual outcomes.
The Health and Care Professions Council (HCPC)’s People Strategy: Succession Planning
HCPC is a regulator of health and care professions in the UK, and published their people strategy, which spans 2021-2026. They have four main themes in their people strategy, and the first one focuses on strategic workforce planning.
One of the goals is to develop a succession planning framework. In succession planning framework, identifying potential leaders who will step into key positions in an organization is important.
HCPC’s initial action is to encourage the Senior Management Team to take on more responsibility, accountability, and visibility.
In March 2024, HCPC went through an audit. During the audit, the organization didn’t have a formal succession plan. After the audit, they held a workshop to plan how to address this. HR Business Partners met with department heads to talk about key roles and find potential successors.
Each department is now working on its own plan, figuring out what skills and training are needed and auditors stated that this approach is common for organizations starting succession planning for the first time.
Succession Planning with Teamflect
Creating succession plans for employees is easier with Teamflect, an all-in-one performance management tool integrated with Microsoft Teams and Outlook.
9-box grid feature helps you identify your workforce’s strengths and plan strategically. You can see where your employees stand in terms of their skills and competencies, allowing you to make informed decisions about their career advancement and potential roles.
Ready to strengthen your succession planning? With Teamflect’s streamlined approach, you can ensure that your talent is aligned with organizational needs, making your succession planning efforts more effective and future ready.
Microsoft’s People Strategy: A Decade of Transparency, Commitment, and Progress in DE&I
Microsoft has been a strong advocate for DE&I (Diversity, Equity, and Inclusion) for many years. In 2023, they released their fifth consecutive annual report on these efforts.
The report shows that Microsoft used employee survey data to see how their DE&I initiatives resonate with employees.
In the latest survey, 96.4% of employees were aware of allyship, a core component of Microsoft’s DE&I strategy, up from 90.3% in the previous year and 65.0% in 2019.
The consistency and effectiveness of Microsoft’s DE&I initiatives, along with their accurate measurement methods, highlight the success of their people strategy.
Employee Surveys with Teamflect
In the people strategy example above, Microsoft chose employee surveys to assess the impact of their DE&I initiatives. However, employee input can be leveraged in many aspects of your people strategy, whether in the early development stage, during iteration, or for measurement.
Why not harness the power of employee feedback with Teamflect? Teamflect, an all-in-one performance management tool for Teams and Outlook, offers a dedicated survey module that includes customizable templates, enables anonymity, and provides advanced, AI-powered analysis of the results. This allows you to easily gather, analyze, and act on employee feedback to improve your people strategy.
Align HCM’s People Strategy: Increasing Recognition in a Remote-First Setting
The final people strategy example highlights our beloved client, Align HCM. Their journey began with a clear objective: digitizing their performance reviews after years of relying on cumbersome manual processes.
They chose Teamflect, an all-in-one performance management tool seamlessly integrated into Microsoft Teams. This choice was motivated by their need for a digital solution that could facilitate self-reviews, 360-degree feedback, and manager assessments, all while fostering collaboration within a single platform.
They started with performance reviews initially, but building on this adoption, they have now expanded their use of Teamflect to include the recognition module. This addition allows them to celebrate employees’ achievements and enhance recognition efforts, further strengthening their organizational culture as a remote-first organization.
Unlock the full potential of your organizational strategy with Teamflect!
How to Build a People Strategy?
The way employers and employees interact, and how they nurture their relationship impacts job satisfaction, productivity, and organizational success.
A well-crafted people strategy ensures that this relationship is positive and productive, creating a work environment where everyone thrives.
Here’s a straightforward guide to crafting a people strategy that truly resonates:
Understand Employee Needs
Gather first input from your employees. Recognizing and addressing their needs is fundamental to creating a people plan that supports and motivates employees.
Key focus areas
Employee engagement and satisfaction: Conduct surveys to assess employee engagement levels and satisfaction and determine where employees stand.
Feedback mechanisms: Create continuous feedback loops where employees share their needs, concerns and suggestions.
Career aspirations: Invest time and resources to understand individual career goals and professional growth, aligning employee career development plans with their desires.
Align with Organizational Goals
Ensure people strategy supports the broader objectives of the organization to drive success and cohesion.
Key focus areas
Goal integration: Create a goal setting framework that aligns employee roles with the organization’s strategic goals and mission.
Performance metrics: Define clear performance indicators that reflect both individual contributions and organizational targets. Conduct regular performance review to assess and improve outcomes.
Develop a Supportive Workplace
A supportive work environment promotes authenticity and results in higher productivity.
Key focus areas
Inclusive culture: Build a culture that values diversity, equity and inclusion where all employees feel welcomed as their authentic selves.
Professional growth: Set individual development plans and visible career paths that foster growth among employees, tailored to their career aspirations and goals.
Prioritize Well-being
Prioritizing employee well- being increases job satisfaction, reduces burnout and improves overall performance.
Key focus areas
Health programs: Offer health and wellness programs that address physical, emotional and mental health needs.
Work Environment: Ensure a safe, healthy and comfortable work environment by compiling and implementing best practices to promote it.
Recognize and Reward
Practice recognition and leverage rewards to motivate employees and reinforce positive behavior and increase employee engagement.
Key focus areas
Recognition programs: Employee recognition program is a system where employees are acknowledged and celebrated for their contributions. Specific and genuine recognition gives a sense of belonging to employees.
Rewards/Incentives: Apart from compensation and benefits, offer incentives to motivate employees.
Appraisals: Enhance sense of belonging with 360-degree appraisal to make employees feel valued within the organization.
Use Data Insights
Leveraging data helps you make informed decisions, track progress, and refine your people strategy based on real-time information.
Key focus areas
Data collection: Use surveys, performance metrics, and engagement tools to gather relevant data.
Analysis: Analyze data to identify trends, areas for improvement, and success metrics.
Adjustments: Use insights to make data-driven adjustments to your people strategy and address any emerging challenges.
Communicate
With clear and consistent communication, employees understand organizational goals, expectations, and changes.
Key focus areas
Regular updates: Keep employees informed about organizational changes, goals, and performance.
Open channels: Provide channels for employees to ask questions, give feedback, and engage in dialogue.
Two-way communication: Encourage and facilitate open communication between employees and management to build trust and collaboration.
As this article comes to an end, remember that a dynamic and future proof people strategy is not just about adapting to change but also about anticipating future needs and continuously evolving to meet them.
Embrace the journey of shaping your people strategy, and you’ll be on track to achieving organizational excellence and building a workplace where both employees and goals succeed.
