HR Strategy And People Strategy: What’s The Difference
Understanding the difference between HR strategy and people strategy is more important than ever for business owners.
Thinking that’s easier said than done? Understandable, but don’t worry! At The HR Consultants, we specialise in helping organisations navigate these strategies, offering you expert guidance to support your HR teams and the people that you work with.
With our expertise, you can build a resilient and future-proof workforce that not only meets today’s challenges but also thrives in tomorrow’s opportunities.
In this guide, we’ll explore HR and people strategies, highlight the differences between them, and share some practical tips to help you put them to work in your organisation.
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Table of Contents
- Understanding HR Strategy and People Strategy
- Why Should You Have an HR Strategy and a People Strategy?
- Core Elements of an HR Strategy
- Core Elements of a People Strategy
- The HR Consultants: Here To Help
- The Five Steps to Building an Effective HR and People Strategy
- Frequently Asked Questions (FAQs)
Understanding HR Strategy and People Strategy
It’s important to know the difference between HR strategy and people strategy for you and your team to see the best results from both.
In our experience, when both strategies are combined, they can have a direct impact on your employee retention, as well as your business’s success overall.
What is HR Strategy?
HR strategy is all about making sure your company’s HR function aligns with your overall business strategy to help you achieve positive business outcomes.
One way you might do this is by looking at how well your recruitment strategy has been working. Are you getting enough qualified candidates? If not, you could try tweaking a few things. Maybe update your branding to attract more people or start an employee referral program.
An HR strategy also includes important administrative tasks, like staying compliant and keeping on top of employee performance management. It covers everything from filing paperwork and keeping records to handling employee evaluations and feedback.
What is an HR Strategy Example?
Let’s say a financial services firm wants to strengthen its workforce to meet future business demands. Their HR strategy might include the following elements:
- Employer Branding: Developing a strong employer brand that highlights the company’s values, culture, and career opportunities, making it more attractive to potential candidates.
- Advanced Recruitment Techniques: Using a mix of traditional and digital recruitment channels, including social media, job boards, and professional networks, to reach a wider pool of candidates.
- Structured Interview Processes: Implementing a consistent and thorough interview process that assesses candidates not just for skills and experience but also for cultural fit.
- Onboarding Programs: Creating comprehensive onboarding programs to help new hires acclimate quickly and effectively. This can involve regular one-on-one meetings to give them the chance to ask any questions directly to their supervisor.
- Employee Referral Programs: Encouraging current employees to refer potential candidates and leveraging their networks to find qualified hires.
What is People Strategy?
A people strategy is all about the employee experience and how an organisation takes care of its own people. It goes beyond the traditional HR role to include everything that affects employee engagement, development, and well-being.
Imagine creating a workplace where your team feels valued, motivated, and happy to come to work every day. That’s what a people strategy aims to achieve.
What is a People Strategy Example?
As an example, let’s say a tech company wants to motivate their employees to stay at the company long-term and develop in their careers. They might design a people strategy like this one:
- Personalised Training Plans: Each employee gets a tailored development plan that focuses on their individual career goals and skill gaps.
- Mentorship Programs: Pairing less experienced employees with seasoned professionals to guide their growth and development.
- Regular Feedback Sessions: Establishing a routine for constructive feedback to help employees understand their strengths and areas for improvement.
- Career Advancement Opportunities: Clearing pathways for promotion and career progression, ensuring employees see a future within the company.
- Work-Life Balance Initiatives: Offering flexible working hours, remote work options, and wellness programs to support overall employee well-being.
What is the Difference Between a People Strategy and an HR Strategy?
The difference between a people strategy and an HR strategy is that HR Strategy is all about aligning the workforce with the company’s goals in a very structured way. It focuses on performance, efficiency, and cost-effectiveness. Decisions are driven by data, ensuring the right people are in the right places to meet the company’s needs.
People strategy, on the other hand, places emphasis on the human element. It’s about nurturing and developing employees, recognising their value, and focusing on long-term benefits. This strategy prioritises engagement, satisfaction, and well-being, aiming to build a loyal and motivated workforce.
Why Should You Have an HR Strategy and a People Strategy?
Let’s look into the details of HR strategies and people strategies, and why you should implement both.
The Importance of HR Strategy
In a survey carried out by SHRM (Society for Human Resource Management), 63% of workers said that ‘having a strong, positive brand perception’ was an important part of the employee experience.
This means that companies who focus on their brand perception and image, not just to the public but also to employees, are more likely to stand out as employers of choice.
The Importance of People Strategy
In the same survey by the SHRM, 84% of workers reported that ‘feeling that you are fairly treated’ was important to their employee experience. When employees feel valued and supported, their engagement levels rise, leading to higher productivity and better overall performance.
To get a better understanding of how a positive employee experience can make a difference, check out this quote from SHRM’s survey.
‘As employee experience scores increase, so do measures of job satisfaction and employee engagement, and vice versa. […]
In other words, when employees have a positive experience at work, they are more likely to feel satisfied with their job and engaged in their work, and less likely to consider leaving their employer.’
Core Elements of an HR Strategy
What goes into creating an HR strategy? You’ll want to think about the entire employee lifecycle and how you can cover each stage, as well as any policies and procedures related to your employees.
Let’s go into detail on what an HR strategy should involve and how it fits in with managing the employee lifecycle:
- Hiring the Right People: Good personnel management starts with defining roles, advertising openings, screening applicants, conducting interviews, and making offers. A strategic approach helps you to attract talented candidates who fit your company culture, saving you time and money.
- Employee Onboarding and Orientation: Once you’ve hired the right employees, it’s important to look at your onboarding and orientation processes. Take the time to introduce new hires to your company’s culture, and policies, and provide the necessary training.
- Helping Employees Grow: Performance management involves setting clear expectations, monitoring progress, and giving feedback. Regular reviews, goal setting, and improvement plans align individual performance with the company’s HR leaders’ objectives.
- Compensation and Benefits: Compensation includes more than just salaries—think bonuses, health insurance, retirement plans, and perks. A competitive package attracts and retains top talent.
- Compliance and Risk Management: This includes workplace safety, preventing discrimination and harassment, and protecting employee data. Regular audits and training help maintain a safe and fair work environment, avoiding legal issues and penalties.
- Workforce Planning: Look ahead to understand future staffing needs. Assess your current team, identify skill gaps, and plan future hires. This helps you prepare for growth, manage changes, and make sure you have the right people in the right roles.
Core Elements of a People Strategy
You should see the employee lifecycle in your people strategy, too. The difference is that there’s more of a focus on how you can create a positive and motivating working environment for your employees day-to-day to support them, rather than the operational aspects of managing employees, like advertising job roles.
- Focus on Leadership: Great workplace leaders inspire trust and set the tone for the workplace. They’re accessible, communicative, and dedicated to the company’s mission. We recommend investing in leadership development to support leaders at all levels in guiding their teams effectively.
- Motivate Employees: Motivating employees is at the heart of a successful people strategy. Show you value them by recognising achievements, offering meaningful work, and fostering a sense of community. Regular surveys and feedback help keep engagement levels high.
- Encourage Development: A culture of learning encourages innovation and adaptability. Providing access to training and development programs is a great way to help employees gain new skills and advance their careers. Regular reviews and career planning also help employees to see their future with the company.
- Build a Welcoming & Inclusive Workplace: An inclusive workplace values and respects everyone. Promote diversity, equity, and inclusion through training, diverse hiring practices, and employee resource groups.
- Gather Feedback: Use surveys, focus groups, and suggestion boxes to understand employees’ needs and show that their input leads to real changes.
- Support Remote/Hybrid Workers: Support your remote teams with the right technology, effective communication, and policies that promote work-life balance. Flexibility and resources are the way to go for successful remote work.
- Demonstrate Health & Well-being Awareness: Offer wellness programs that cover physical, mental, and emotional health to show your employees that you care about their health.
The HR Consultants: Here to Help
Getting HR right can be a little overwhelming. You might not know where to start, or maybe you know what needs doing but you’re not sure how to do it…
We’ll help you to find a strategy that works for you and your team, so that you can plan ahead with confidence.
After 20 years working in HR in the corporate world, our founder Charlotte started The HR Consultants with a simple goal: to offer HR services that truly make sense. You’ll see that in everything that we do, from our warm approach to each and every one of our clients to our thought-out strategies, created with close attention to every detail of your business.
Take a look at our packages for more information on how we can work as your HR department, or reach out to us to ask about one-time projects. We’d love to hear from you!
Frequently Asked Questions (FAQs)
Do you have more questions on HR strategies and people strategies? Check if they’re answered here, or reach out to us for more advice!
What are the two types of HR strategies?
There are two main types of HR strategies: traditional HR strategy and people strategy. Successful companies often blend the two, ensuring business goals are met while employees thrive.
Let’s break these down as a reminder:
An HR strategy is all about making sure that the company has everything it needs to run smoothly. It handles operational bits and bobs like hiring and onboarding to keep the workforce as productive as possible.
A people strategy, on the other hand, takes a broader, more holistic view. It aligns the employees’ day-to-day well-being and engagement with the overall business goal.
In short, whilst an HR strategy is about the processes involved in people management, a people strategy is about the company’s relationship with its employees.
What is a people strategy example?
Let’s take a look at a practical example of a people strategy. Imagine a company that prioritises employee development and engagement. They offer continuous training through workshops and online courses to help employees grow and prepare for future roles.
They also have an employee recognition programme, with monthly awards and annual celebrations for top performers, boosting morale and creating a positive work environment. To promote work-life balance, they provide flexible working hours and remote work options, ensuring employees stay happy and productive.
This people strategy focuses on talent development, recognition, and well-being, creating a motivated and engaged workforce that drives the company’s success.