The People Strategy Is the Business Strategy

The People Strategy Is the Business Strategy

Author: Julia Howes, Principal, Mercer

Your business strategy is an essential tool to help fulfil your organisation’s potential. Like most, it probably includes some HR targets, perhaps to do with employee engagement scores, turnover or diversity. If you are like the majority of businesses, though, it is unlikely to address the question of how to shape the workforce of the future. You achieve your growth targets through people, so your business is your ability to tap into people, and ensure they thrive.

Forward-thinking leadership teams are creating their people strategy as an integral part of their strategic business planning process, no longer left to HR to determine in isolation. These organisations shape their plans to meet their workforce needs, knowing that their most important competitive advantage is the ability to attract and retain the right people.

A New Era Demands This Change

The need is greater than ever before. There is a whole new set of macroeconomic factors driving the need to focus on people. We are in the midst of the fourth industrial revolution, where rapid digitisation and evolving technologies are fusing with demographic shifts, lower barriers to entry, evolving business models and consumer expectations, all producing an ever-accelerating rate of change. With this change comes a reduction in the time it takes a business to rise or fall, and therefore a need for a more productive, agile and high-performing workforce.

In addition, the UK faces an unprecedented talent crisis from the combined impact of an ageing population, scarcity of in-demand skills and the likelihood of restricted migration. It’s no wonder 93% of organisations expect the war for talent to increase in the next year. The view that employees are an asset does not cut it anymore. People are, in fact, investors: they choose to invest their time, energy and talent with your company. You can no longer rely on chance or what you have done in the past, as this will not get you close to accessing the workforce needed to ensure business success.

Putting People at the Heart of Your Strategic Business Plan

This planning process must include a co-ordinated review of how external trends are affecting existing structures, jobs and skills across the business, and it must consider the key skills profiles needed for future success. This, in turn, should create a people-centric work environment and leadership approach that will help your business thrive.

10 Questions Your Business Strategy Should Consider to Future-Proof Your People Needs:

To ensure you have the people to execute the strategy, your leadership team must answer these questions:

  1. Across value chains within your business, how are changes in technology and business models likely to affect work styles, jobs and skills?

  2. What is the gap between current capabilities and job types, and those of the future? Which will disappear? Which will appear? Which will change?

  3. Which roles are strategic and core to the business? Which are candidates for non-traditional work forms such as automation?

  4. Which skills do people need that they do not have today? What is your plan for upskilling and reskilling them?

  5. How well does your current learning approach meet future content and delivery needs, and what role does leadership play?

  6. In which areas is it sensible and desirable for work to be done “outside” your physical or legal borders? Where are emerging talent pools for these kinds of task located? Who are they?

  7. What characteristics do future leaders need to display? What is the desired mix of technical and behavioural skills in your leaders?

  8. How do you cultivate the right employer value proposition (EVP) for your people? What is the right mix of reward and non-reward benefits (such as flexible working, health benefits and competitive pensions) that will attract, motivate and retain different talent segments?

  9. Is your culture driving the right behaviours and do you have the right culture to manage the changes ahead?

  10. How do you ensure people can thrive at work? Are they enabled to excel in their work and their career? Are they healthy, energised and productive?

These questions must be answered by business leaders and HR, together. This requires a joined-up approach and, like any good strategy, demands focus, strategic betting and priority setting. The resulting people strategy will guide the development and execution of integrated and aligned people and HR strategies across your entire business.

An Opportunity to Elevate HR

Does this approach mean weakening the role of the Chief Human Resources Officer? Far from it.

For a long time, HR has struggled to show significant impact due to a disconnect with the business. Facilitating this critical decision making at the top and being responsible for executing strategic bets and priorities will actually elevate the role of HR.

This is a call to action for all strategically minded HR leaders to ensure their business is managing their workforce at the right level, with the appropriate focus. Isn’t it time you created a People-Shaped Business?

New Steps

If you are on a journey to making people the centre of your business strategy, get in touch with one of our experts. We will also be sharing examples in the coming months of what leading organisations are doing to future-proof their workforce which you can receive by subscribing to updates below.

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This article does not contain advice in respect of actions you should take. No decision should be made based on this information without obtaining prior specific, professional advice relating to your own circumstances.