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What is a People Strategy and How Do You Create a Successful One?

Feb 9, 2022| Reading time: 14min

BY Sharon Rusinowitz

Director of Content Marketing

Every company’s success depends on its people. Yet, not all organizations have a cohesive people strategy to support, connect, and engage their workforce.

Gartner research finds people-centric policies lacking, particularly in post-pandemic virtual or remote workplace settings. As a result, employee performance and well-being are suffering.

The reality is organizations will only achieve their business goals if they put their people first. And that’s where a people strategy can help.

A people strategy is about more than meeting immediate hiring needs or implementing an onboarding program. It governs every aspect of the employee-employer relationship. And it falls on HR leaders to create an effective people strategy to attract and retain talented employees in the modern workplace.

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What is a People Strategy?

A people strategy is a company’s overall plan to attract, engage, train, and retain its workforce. It sets the approach for a company’s relationship with its workforce across all stages of the employee lifecycle, as it should incorporate every phase from recruitment to offboarding.

People leaders should work with the rest of the C-suite, line managers, and finance to develop a people strategy. The purpose of this collaboration is twofold: First, it keeps everyone aligned. Second, it ensures that the people strategy delivers on the organization’s broader business goals.

As these groups come together, it’s important to clarify what you want to accomplish with a people strategy and keep these goals top of mind to ensure everyone stays focused on them. According to research by Boston Consulting Group, an effective people strategy should enable a business to:

  • Develop talent
  • Improve leadership
  • Build a healthy organizational culture
  • Promote diversity, equity, and inclusion

How to Build a Successful People Strategy

To build a successful people strategy that serves business goals, HR teams must put people at the center of all employee interactions. The practices below will enable you to build a people strategy that keeps your workforce happy and your company competitive.

Prioritize the employee experience across the talent lifecycle

Crafting an effective employee experience is an essential element of a successful people strategy because the happier your employees are, the better your company’s performance.

Back in 2015, Airbnb made headlines when it rebranded the CHRO role as the global head of employee experience. Mark Levy, who took up that role, sums up the goals of an employee experience function like this: “Increasing employee engagement, decreasing turnover and, most importantly, improving performance as it relates to customer satisfaction and driving business goals.” This shift paid off—shortly afterward, Glassdoor named Airbnb the best place to work based on employee reviews.

This focus matters: Research from McKinsey shows when an organization excels at the employee experience, its workforce is more likely to exceed expectations, “having a 40 percent higher level of discretionary effort.” This means talent goes above the minimum required of them when their employer provides a positive employee experience.

“Companies know that a better employee experience means a better bottom line. Successful organizations work together with their people to create personalized, authentic, and motivating experiences that tap into purpose to strengthen individual, team, and company performance,” writes a team of partners and consultants from McKinsey.

Here are a few examples of how you can provide a better employee experience:

Cultivate a sense of belonging for all employees. Fostering a diverse and inclusive workplace is a key part of creating a successful people strategy. When all employees feel included and supported, they are empowered to do their best work. As part of their DEI work, BetterCloud, a SaaS management platform, ties DEI progress to OKRs and works closely with employee resource groups to advance DEI. To that end, some organizations are setting up dedicated DEI teams. Other steps you can take to improve in this area include prioritizing pay equity and salary transparency.

Adopt a people-centric culture that supports employees during positive and challenging times. In a survey of more than 6,600 people management leaders, 85% said meeting employees’ needs and expectations is critical to attracting and retaining talent. Visual collaboration tool InVision uses an interactive map to provide personalized support to remote employees. For example, when Hurricane Ida made landfall in Louisiana, InVision could see two employees were in the path of the storm and would need to evacuate. The People Team arranged safe temporary accommodations for affected employees and their families. Importantly, you can only support your employees’ well-being in ways like this if you know your workforce. For instance, collecting data about location or childcare commitments in a people analytics solution can help you offer personalized support programs.

Create clear measures for rating the employee experience. Companies should measure experience-related insights, like turnover, burnout, and employee engagement. To measure the employee experience, use engagement surveys and exit interviews to collect the relevant HR metrics. Collecting this data is only the first step. You’ll also need to take action on your findings. For instance, Kim Mota, senior vice president of people experiences at Poly, which offers a video conferencing solution, noted an increase in turnover at the company. In response, she launched rest days and reclassified roles to create a work-life balance. The key to making these types of initiatives successful is to listen to what your people are telling you by monitoring your workforce data and by directly asking your employees through surveys.

These initiatives will help you create a superior employee experience that strengthens your company’s ability to meet both employee and business needs.

Build a strong employer brand

Crafting a solid employer brand via social media, reviews, and other employee-generated content attracts talented candidates because it shines a light on your company culture. Showcasing what your company is like behind the scenes can help candidates decide if your organization is the best fit for them during the recruitment stage.

A study in the Journal of Vocational Behavior finds organizations with active, comprehensive social media pages that communicate their “employer brand personality” appear more attractive to job seekers. Critically, one survey of 1,096 workers found one in three Americans turned down a job offer due to a negative review.

Great examples of companies with a strong social media presence are Showbie and Even Financial. Educational app Showbie uses Twitter to convey its passion for educational technology. It shares industry content and product tips with its 12,400 followers.

Meanwhile, B2B fintech Even Financial posts hiring and company news on LinkedIn to position itself as a leader in its industry and help open the door for top talent.

Even Financial Appoints Andrew Naoum as Senior Vice President of Sales

To build a strong employer brand like these companies, your people team should partner with your marketing department. Part of those joint efforts to build an employer brand program should include a plan to monitor and respond to employee reviews. The Harvard Business Review recommends companies also prioritize employee-generated content to craft a powerful employer brand.

Develop a purpose-driven organization

Uniting employees around a shared purpose directs your workforce’s efforts and shows employees their work makes a difference. When they feel like their contributions matter, engagement and performance increase.

One EY survey finds 63.4% of executives are better equipped to respond to disruption when they have a sense of purpose. Rebecca Henderson, the John and Natty McArthur University Professor at Harvard Business School, says developing a clear purpose boosts engagement and performance:

“The sense of being part of something greater than yourself can lead to high levels of engagement, high levels of creativity, and the willingness to partner across functional and product boundaries within a company, which are hugely powerful.”

Building a purpose-driven organization is a fundamental element of Spotify’s people strategy. The company clearly communicates its mission and goals with all employees. Katarina Berg, Spotify’s chief human resource officer, writes: “…having an overarching goal of the company mission means that behaviours will always be linked to that objective. Being purpose-driven and sharing this idea of what we are all working towards, together, helps to give motivation and allows each Spotifier to understand what they each bring to the table and how they can have impact.”

To develop a purpose-driven organization, your people team must first identify the organization’s desired values and mindsets. Employee feedback is key during this process. At Spotify, for example, HR held workshops with employees to learn their values and motivations. The company then drew their core values from these discussions, which is important since these values should underpin the company purpose.

Once you have clarity on your values and purpose, you can translate these into leadership and employee behaviors. Let’s say building more inclusive tech is your company’s purpose. Based on this purpose, one norm might be for product designers to work closely with underrepresented communities.

Promote skills development

Giving employees the opportunity to learn new skills that align with both the overall business goals and their personal goals can benefit employees and your company alike. In Competitive People Strategy, Kevin Green writes that the modern company’s success depends on the skills and talent of its workforce. This is unlike previous eras where business outcomes hinged on investments in “plant and machinery.”

Companies like Dell place employee achievement at the center of their people philosophy. Jenn Saavedra, Dell Technologies’ chief human resources officer, says: “We want to enable people to achieve their career goals, to be successful, and continue to grow and learn and perform.” The company uses data such as industry trends and in-house technical skills requirements to identify and close skills gaps. Further, each employee has an individual learning plan.

There’s no one-size-fits-all approach for employee development. However, popular methods include workshops, on-the-job training, and mentoring. Here are specific, research-backed tactics for promoting skills development:

  • Establish clear career paths: Show employees what a potential future looks like at your company with clear career frameworks.
  • Rethink performance management: Adopt agile performance management to improve employee performance through regular 1:1s and coaching conversations.
  • Offer leadership development training: Give middle management the training they need to effectively mentor their teams and drive cultural change.

Overall, giving employees these opportunities to learn and grow will help them contribute to the company’s success in more valuable ways.

Investing in Your People Strategy is an Investment in Business Success

Organizations that excel at people strategy will see better employee performance and accomplish business objectives more effectively. As a result, an investment in people strategy is an investment in your organization’s most important asset: your people.

A great starting point for any people strategy is to review your current strengths and weaknesses. People data can provide valuable insights here. Learn how people analytics can give your company an overview of the workforce.

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