#Human Resources #Employer

HR Strategy: What It Is and How to Create One?

Hong Yuan
by Hong Yuan
Nov 12, 2024 at 2:14 PM

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What is a Human Resources Strategy?

An HR strategy refers to a comprehensive framework that coordinates the human resource function with the corporate strategy of an organization. Some of the documents detail particular policies, programs or practices of the company to achieve the goals of HR by matching people, values and competencies.

 

How HR Strategy Aligns with Overall Business Strategy

HR strategy cannot be implemented in isolation from the rest of the organisation’s strategy. It is the alignment of the HR strategy to the company’s vision, mission, and objectives to facilitate capital on human resources for growth, productivity, and enhanced organizational culture.

 

Core Components of an HR Strategy

A successful HR strategy generally includes:

  • Talent Acquisition and Recruitment: Methods for sourcing and hiring employees who match the company's needs and culture.
  • Employee Development and Training: Programs that support skill-building and career growth.
  • Performance Management: A system to evaluate, reward, and improve employee performance.
  • Employee Engagement and Retention: Initiatives that promote satisfaction and reduce turnover.
  • Compensation and Benefits: Competitive salary structures and benefits packages.
  • Diversity and Inclusion: Policies that encourage a welcoming and diverse workplace.

 

Why Is It Important to Have a Human Resources Strategy in Place?

Benefits of a Well-Defined HR Strategy

A clear HR strategy provides several advantages:

  1. Enhanced Employee Engagement: Clarification of the roles and goals helps employees understand that they are part of the company

  2. Increased Productivity: Effective HR strategies ensure employees have the right skills and support to perform well.

  3. Better Retention: Recruiting is expensive, and so retaining talent is critical to avoid the high costs of having to recruit new talent over and over again.

 

Legal and Regulatory Advantages

In Malaysia, having a defined HR strategy can also ensure compliance with labour laws and regulations, reducing the risk of legal issues and penalties. It helps HR teams stay updated with regulatory changes, providing a safe and compliant work environment.

 

How to Create a Human Resources Strategy

1. Assess Current HR Status

  • Analyse HR Practices: Review current HR processes, policies, and outcomes.
  • Identify Gaps: Highlight areas that need improvement, whether in recruitment, retention, or development.

2. Set Clear Goals and Objectives

  • Define specific goals for the HR function (e.g., reducing turnover by 10% in a year, enhancing leadership skills).
  • Ensure HR objectives align with the company's broader business goals.

3. Develop Key HR Initiatives

  • Recruitment and Talent Acquisition: Build strategies to attract and hire qualified talent.
  • Employee Development and Training: Create programs to enhance employee skills and support career growth.
  • Performance Management: Implement performance assessment tools and reward systems.
  • Employee Engagement: Establish initiatives that foster a positive, inclusive work environment.
  • Diversity and Inclusion: Develop policies that promote a diverse and respectful workplace.
  • Compensation and Benefits: Design competitive and fair pay and benefits structures.

4. Implement the HR Strategy

  • Assign Roles: Define responsibilities for HR team members.
  • Set Timelines: Create realistic deadlines and milestones for each objective.
  • Allocate Resources: Ensure budget, tools, and personnel are available for successful implementation.

5. Monitor and Evaluate

  • Use KPIs: Track performance using key performance indicators to measure the impact of HR initiatives.
  • Make Adjustments: Use data and feedback to improve or modify the HR strategy as necessary.

 

Best Practices for Human Resources Strategies

  • Align with Company Mission and Values: HR strategy should reflect the company’s mission and foster a sense of purpose.
  • Emphasize Continuous Learning: A focus on growth and development keeps employees engaged and skilled.
  • Foster Open Communication: Encourage feedback to maintain a healthy work culture.
  • Use Data-Driven Decision-Making: Leverage data to inform HR decisions and refine strategies.
  • Regular Updates: Adapt HR strategies to meet the changing needs of the organization and workforce.

Examples of Great HR Strategies

  • Google: Known for fostering autonomy, development, and a unique workplace culture.
  • Unilever: Prioritizes diversity, sustainability, and global career opportunities for employees.
  • AirAsia: Has a recruitment strategy aligned with its rapid regional expansion and cultural fit.



FAQ

1. What is an HR strategy?

An HR strategy is a course of action that has the objective of integrating the human resource management activities with the corporate objectives.

2. How does HR strategy impact employee engagement?

A well-crafted HR strategy can boost engagement by aligning individual roles with company goals, offering growth opportunities, and fostering a positive work environment.

3. What are key components of a successful HR strategy?

Recruitment, employee development, performance management, engagement initiatives, and competitive compensation are core elements.

4. How often should HR strategy be updated?

Regular reviews—at least annually—are essential to adapt to evolving business and employee needs.


A comprehensive HR strategy strengthens the foundation of any business by supporting a workforce that’s skilled, motivated, and aligned with the company’s goals.

 

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