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