Most companies spend the majority of their time on business strategy and too little time thinking, let alone doing anything about People Strategy and Company Culture.
Why is it important to invest in your human capital? A comprehensive approach to people management and employee satisfaction can have a significant and lasting payoff. Studies show there's a direct link between an effective people strategy and a company's competitive advantage (see links further down in the article). Without an effective people strategy in place, entrepreneurs run the risk of losing the original competitive advantage of their great idea.
It’s Not About HR – It’s About PEOPLE STRATEGY
HR runs the operations and admin. Those are activities. HR strategies aim at building optimised and efficient programs and processes to attract, retain and motivate talents.
People Strategies aspire to building programs and processes to improve human performance and ultimately impact the organization’s bottom line! A subtle, but important difference.
The objective is to improve the human performance at all levels, throughout the organisation and in a consistent manner. The business strategy will define the objectives for the organisation and install processes or tactics to increase revenue and reduce expense… but performance does not happen on paper, performance happens with PEOPLE.
Increasing employee PERFORMANCE
Performance is very much linked to happiness at work. Money often simply assumed to be the major motivator – was seventh on the list, well back in the pack according to the TINYpulse report on Employee Engagement and Organisational Culture (Find out more on the full report here).
So, once you've decided that a comprehensive people strategy is a necessity for your company, you're ready to take the first step to building it. And here are some key questions to answer in order to get started:
1. WHO ARE WE?
Studies have shown there is a direct correlation between an healthy, productive culture and a company’s bottom line. Already in 2008, Fortune magazine reported that the "100 Best Companies to Work for in America" returned twice as much on their stock per year, compared to the overall market. Yes, twice as much.
The definition of a conscious, authentic and deliberate company culture is critical and needs to be placed at the center of your people strategy. It will ensure alignment and consistency as you grow (Find out more on Company Culture here).
2. HOW DO WE WORK HERE?
This will be defined in your HR policies, which are directly translated from your company culture. Installing good hygiene is critical to establishing fair, legal and productive business practices, but it also needs to be consistent across the organisation and line with your company culture. Netflix provides a great example of how they translated their values into meaningful policies.
3. WHO AND WHERE ARE OUR CANDIDATES?
Attracting and recruiting people is obviously a huge component of your people strategy too. An efficient hiring process ensures the recruitment of the right people, for the right position, at the right time - with objective, unbiased and consistent practices.
4. HOW TO RETAIN OUR TALENTS?
Building a positive workplace in consistency with your culture will be instrumental to employee performance and satisfaction. A good retention strategy will also prevent the high cost associated with staff turnover and significantly boost productivity. It costs upwards of 150 percent of the average employee's’ annual salary to be replaced! (See details in Karlyn Borysenko’s very interesting article from April 22, 2015).
5. HOW TO DEVELOP OUR PEOPLE AND ORGANISATION?
Finally, how do you develop your people and anticipate for your needs in terms of skill. Developing the employees’ careers is not only key to creating a highly satisfying place to work (and therefore attracting and retaining talents). It also increases the company’s asset bank of skills, and improves the company’s intellectual capital and wealth of expertise. More tips to help you answer these 5 questions here.
And the good news is that to answer these questions, you do not necessarily need an HR team! But what is critical, is to develop a leadership team skilled at leading people as they will in turn engage and develop their teams and thereby improving organizational performance!