A well-researched and -presented organizational strategy is a valuable blueprint for how you're going to run your business. An effective strategy sets a clear vision and ambition for your company while identifying the necessary resources required to deliver on it, including your people. Linking your HR strategy to your organizational strategy makes good business sense for a number of reasons.
HR departments sometimes are left to deal with only administrative functions, such as recruitment, performance management, training and compensation. These functions are important, but on their own, they form no part of how an organization plans for the right level of human resources to deliver on its plans and ambitions. Empowering your HR department to add value to your business strategy ensures it undertakes its functional activities in a manner that supports growth and success.
An effective HR strategy with clear links to the business strategy enables your organization to align its activities better with its human resources. An HR department that understands the demands of your business strategy can help ensure you have the right people in place to deliver on your ambitions and support growth. HR departments integrated into the senior strategic management team can work across the organization ensuring that human resource requirements are considered equally with other organizational investments.
Organizations are affected by a huge range of external and internal factors that together can change the nature of individual job roles or place new demands on individuals skill sets. An HR strategy linked to the organizational strategy is better placed to anticipate any such changes and therefore can put in place a targeted training and development plan to help the organization more quickly adapt to new circumstances.
Employees who feel better supported in their jobs tend to be happier and more productive. Furthermore, organizations with a positive reputation in the jobs market for taking care of its workforce face fewer barriers to effective recruitment. Taken together, these factors are important elements in illustrating why HR strategy must link to organizational strategy. With recruitment and retention being two key areas where monetary value can be assigned, a more stable and better-trained workforce means improved operating profits.
A mature approach to HR strategy places it at the center of understanding an organization's overall capacity and capability. Having a clear concept of your employees and their different skills can help you see where your organization has potential for development and growth and help you structure your organization to take advantage of emerging opportunities. Organizations that have reached this point in their development see HR as a key driver of strategy and integral to their future success, rather than as a simple administrative function that ensures everyone gets paid on time.