For a small- and mid-sized business owner (SMBs), the concept of an HR strategy and HR structures might feel like something only large corporations need.
However, a well-designed HR strategy and the structures to support the HR strategy can help you align your people practices with business goals.
Let’s explore what an HR strategy means for SMBs, the benefits it brings, and the structures and tools required to make it work effectively.
What Is an HR Strategy?
An HR strategy is a framework that outlines how you will manage your people and HR practices in order to meet your business objectives. It includes HR policies, structures, processes, and initiatives related to recruiting, developing, engaging, and retaining employees.
The HR strategy should be tailored to your business’ size, industry, and goals. Once developed, it can provide you with guidance and ensure your people decisions align with and support your overall business strategy.
The Connection Between HR Strategy, Vision, and Values
The most effective HR strategy should be rooted in your business’ corporate vision and values. These foundational elements serve as the compass for all HR activities.
• Corporate Vision: Your vision outlines where your business aspires to go and the impact it aims to have. An HR strategy aligned with this vision ensures that talent acquisition, development, and retention efforts focus on building the workforce needed to achieve these goals.
• Core Values: Values define how your business operates and interacts with employees, customers, and stakeholders. HR policies and practices should reflect and reinforce these values, creating a culture that embodies what the organization stands for.
For example, if innovation is a core value, the HR strategy could emphasize hiring creative thinkers, reward collaboration, and provide professional development opportunities that encourage out-of-the-box ideas.
The Benefits of an HR Strategy
1. Improved Talent Management
A clear HR strategy helps SMBs attract, develop, and retain the right talent. It ensures that job roles, career paths, and development opportunities are aligned with business needs and core values. Examples of talent management strategies to include in the HR strategy can be structured onboarding, culture assessments, retention strategies, learning and development, and succession planning.
2. Enhanced Employee Engagement
Employees are more engaged when they understand their role in achieving the company's mission and see that their work aligns with the organization's values. Initiatives like regular check-ins, employee surveys, and team-building activities can foster a sense of belonging and can also be included in the HR strategy.
3. Consistency and Fairness
An HR strategy establishes standardized policies and procedures, reducing ambiguity and promoting fairness in areas like hiring, performance management, and compensation.
4. Scalability
By formalizing HR processes early, your business is better equipped to manage growth. A solid HR strategy with its accompanying structures provides guidance and stability during periods of expansion.
5. Risk Mitigation
Proper HR policies, practices, and documentation protect SMBs from legal and compliance risks, which can be costly and disruptive.
Structures Needed to Make an HR Strategy Work
To implement an effective HR strategy, businesses need supportive structures and tools. Key elements include:
1. A Central Repository of HR Documents
An organized, accessible repository is essential for storing key HR documents, such as:
• Job descriptions and organizational charts.
• Employee handbooks.
• HR policies.
• Performance review documents and process.
• Training materials and career development plans.
• Compliance and legal documentation, and more.
Cloud-based platforms can help you store and share these resources efficiently. Just remember, there are specific HR documents that will require limited access in order to maintain privacy and confidentiality.
2. Processes and Systems to Support Your HR Strategy
• Written Policies: As mentioned above, clear, written HR policies that align with company values and legal requirements.
• HR Technology: Affordable software solutions for payroll, benefits, applicant tracking, and employee feedback.
• Regular Policy Reviews: Regularly scheduled reviews of HR policies and processes to ensure alignment with evolving business needs, as well as legislative updates and changes.
Whether your SMB is just starting to formalize HR practices or looking to refine existing strategies, investing in a clear HR framework grounded in an HR strategy and its supporting structures is one of the smartest moves you can make for sustainable success.
How can we help you build out your HR strategy and structures?
Reach out to us and we’ll help you build the right HR strategy for your business and the structures to support it.
Comments