Why do we need an HR Strategy?


Reading the website creative HRM (which I totally recommend) I saw a really interesting presentation about why do we need an HR Strategy and How we can build the effective HR Management function in the organization achieving challenging business goals.

1. WHAT’S HAPPENING IN THE WORLD?

Current Business World

  • Highly competitive environment… each company can copy and paste products
  • High levels of uncertainty … the growth era in the industry gets shorter and products replaced quickly
  • Generation Y is not loyal with the employer … they are loyal just with their values
  • Green business as a priority for the modern western organization
  • Constant cost cutting pressure from shareholders and competitors
  • State protection on the rise … again
  • New competitors from emerging marketing growing each day creating the additional pressure on prices

HR StrategyCurrent HR Industry

  • Global workforce management … aligning and unifying many different cultures in one organization
  • Global talent management and implementation of global relocation policies
  • Increasing performance pressure … while (try to) keeping employees satisfied
  • Global HR processes blocking the local flexibility
  • Permanent fight with increasing costs of employment
  • Shifting jobs globally, building the operational centers around the Globe
  • Changing HR environment

HR Industry: Trends

  • Hiring talents globally to ensure that all positions in the organization are staffed with the best talents
  • Supporting innovations to build the sustainable competitive advantage
  • Building highly diverse teams as each team can have members from different continent and from a completely different cultural background … setting new rules for the team work and gaining the right team spirit
  • Working with the older employees … the company gets older, the employees get older as well … keeping the young spirit inside the organization is the challenge and a trend
  • Pushing responsibility down the chain while keeping global and local policies … the global organization is not agile, the local organization cannot be controlled efficiently … HR has to find the right balance between global policies and the local execution
  • Less permanent employees and more project based employees … the lifetime employment is the word from the history … the organization cannot offer the certainty, the employees do not offer the loyalty… the project based employment will be on a rise

2. WHY HR STRATEGY?

HR Strategy: What is it?

  • HR Strategy connects the business strategy with the effort of Human Resources to build a better and competitive organization and aligns top executives with the HR team
  • Sets clear objectives for HR in the areas of the talent development, succession planning and organizational development to ensure the future of the organization
  • Defines the key principles for the compensation and organizational design strategy as the organization keeps itself thin and quick
  • Brings a clear border between global and local decision making processes allowing to act to HR Manager autonomously
  • Defines key areas which will be used as the competitive advantage on the job market
  • Identifies gaps in the people management area which have to be improved in a defined time frame

HR StrategyHR Strategy: Why do we need it?

  1. Designing the modern HR organization requires the strategy.
  2. A strategic shift in HR Responsibilities requires the strategy, which is aligned with business objectives.
  3. Change of HR Roles and Responsibilities has to be driven by outcomes from the strategy implementation.
  4. Award winning HR function has the innovative HR Strategy.
  5. A fast moving company requires the strategic HR management (difficult to achieve without any strategy).
  6. The HR Strategy does support strategic decisions. The cost efficient organization always makes decision supported by strategies.

HR Strategy: Design and Implementation

  1. Assess the readiness for change. Assess HR team and the entire organization. Use HR SWOT Analysis. Develop the HR Strategy for the next few years.
  2. Develop the basic HR framework, which will support the change to being the strategic partner.
  3. Clearly define the role of the HR Leader in the organization. Be the architect.
  4. Get the approval.
  5. Define the changed role of the line management in the people management.
  6. Clearly define owners of the HR Strategy. Define who will execute the strategy, define the strategic split of roles.
  7. Clarify roles in Human Resources. Define specialist and generalist roles.
  8. Design the new HR Organizational Structure.
  9. Fill the structure with upgraded talents.
  10. Let talents define sub-strategies and upgrade the HR Strategy to the final one.
  11. Do the strategic HR.

Borja Burguillos

Author: Borja Burguillos

Global People Strategy

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