5 Ways HR Plays a Part in Business Strategy

Human resources are a vital part of any organisation and play a crucial role in developing and implementing an organisation’s strategy. A company’s strategy determines its long-term goals, objectives, and direction. The HR department ensures the organisation has the right people with the right skills and knowledge to achieve these goals. In this article, we’ll explore how human resources contribute to an organisation’s strategy.


How Does HR Contribute to an Organisation’s Strategy?

Human resources software and HR departments can and often do play a vital role in the strategy and direction of startups and businesses. A competent and effective HR department can help companies streamline and optimise the management and productivity of employees and staff. Companies that offer effective HR software include:

  1. Rippling
  2. Deel
  3. Factorial


Shapes Company Culture 

A company’s culture and values are the foundation of its identity and set the tone for how employees interact with one another, customers, and the community. HR can help to shape this culture by developing policies and procedures that reflect the company’s core values and align with its strategic goals.

For example, suppose a company’s strategy focuses on innovation and agility. In that case, HR can create policies encouraging experimentation and risk-taking, such as a flexible work environment that allows employees to work from home or take time off to pursue personal projects.

Talent Acquisition

An organisation must have the right people in the right roles to execute its strategy successfully. HR can help to identify the skills and competencies required to achieve the organisation’s objectives and recruit candidates who possess them. This involves developing a recruitment strategy that aligns with the organisation’s culture and values and attracts candidates who are a good fit for the company.

HR can also use data and analytics to track the effectiveness of recruitment efforts and make adjustments as needed.

Employee Retention

Once an organisation has recruited the right talent, it must invest in their development to ensure they have the skills and knowledge needed to support its strategic goals. HR can create training and development programs that align with the company’s strategic objectives, such as leadership training for employees who will be leading innovation initiatives.

Additionally, HR can create career development opportunities that provide employees with a clear path for advancement within the company. By investing in employee development, organisations can increase employee engagement and reduce turnover, significantly impacting the bottom line.

Performance Management

Performance management involves setting employees’ goals and expectations and providing feedback on their performance.

HR can develop performance metrics that align with the organisation’s strategic objectives and provide managers with the tools and training needed to provide meaningful employee feedback. By monitoring performance and giving feedback, HR can help employees stay on track and make adjustments as necessary to ensure that they contribute to the organisation’s success.

Workforce Planning

Workforce planning involves identifying the talent and skills needed to achieve the organisation’s strategic objectives and developing a plan to acquire and retain that talent. HR software and HR professionals can use data and analytics to identify skill gaps and develop a plan to fill them by developing a training program or hiring new talent.

Additionally, HR can create succession plans that ensure key positions are filled by employees prepared to take on those roles when needed. By proactively managing workforce planning, HR can help ensure the organisation has the talent it needs to achieve its strategic goals.


Why Is HR So Important in Business?


HR plays a crucial role in aligning the organisation’s culture and values with its strategic objectives, recruiting and developing talent, managing performance, and planning for the workforce. By doing so, HR helps to ensure that the organisation has the right people with the right skills and knowledge to achieve its goals. As organisations continue to face increasingly complex challenges, the role of HR in developing and executing strategy will only become more critical.

HR leaders must be strategic thinkers who understand the organisation’s goals and objectives and have the skills and knowledge to develop and execute a plan. By working closely with senior leaders and other departments, HR can create a culture of innovation and agility that allows the organisation to adapt to changing market conditions and stay ahead of the competition. In short, human resources are not just a support function but a critical driver of organisational success.