What’s your company’s HR strategy? If your HR department works only on tactical HR processes like payroll and time and attendance, you’re missing out on strategic HR benefits.
Those benefits can include:
- More productivity
- Higher employee satisfaction
- Better bottom-line results
Strategy can transform your HR department from a service group to a team that creates value across the company. Sound good? Here’s what’s involved.
What’s the difference between tactical HR and strategic HR?
Tactical HR and strategic HR are both necessary for a company to reach its full potential. Tactical HR must come first, because it includes things that make it possible to hire, train, pay and manage employees. It also oversees compliance with employment and benefit rules.
Elements of tactical HR include, but certainly aren’t limited to:
- Processing forms for new hires
- Handling payroll
- Posting compliance notices
- Recruiting and hiring
- Writing job descriptions
Strategic HR includes tasks that are future- and value-focused, such as:
- Building a pipeline of high quality job candidates
- Managing training and certification pathways for employees
- Improving employee productivity
- Developing programs to retain talent
- Planning for employee and leadership succession
Know the benefits of strategic HR planning
Here are a deeper look at how strategic HR practices can benefit the bottom line.
1. Build a pipeline of high quality candidates
Strategic recruiting can identify and connect with good candidates before they’re needed. That can reduce time to hire and support the company’s growth goals. This is critical for startups and other companies planning expansion.
2. Improve both productivity and revenue
Programs to get frequent feedback from employees can improve productivity and increase revenue. Well-managed feedback programs can also improve employee retention rates and reduce hiring costs.
In industries where there’s a talent shortage, this can protect companies from poaching by competitors.
3. Increase retention
Strategic employee development can improve retention and engagement. It can also help brand the company as an employer of choice – for job seekers and for current employees.
This is another way to maintain a talent pipeline and reduce poaching.
4. Streamline change management
Succession planning reduces just one of the disruptions associated to change that can disruption key employees. Continuity during all types of transitions can keep investors and employees from jumping ship.
5. Increase your HR department’s influence
Strategy gives the HR department a seat at the business planning table, too. To effectively execute the larger business goals, the whole culture must be aligned with them. That requires HR insight and support.
For example, if your business isn’t meeting its productivity goals, strategic HR can help determine:
- Why your people aren’t reaching their
productivity potential
- Do they lack key skills? Is there a culture problem?
- What your employees need to become more
productive
- HR can source trainings, start employee resource groups and provide other forms of employee support.
- How to implement changes for maximum benefit
- Change is challenging, even when it will help a team or company reach its goals. HR people draw on emotional intelligence skills to help employees navigate changes.
Base HR strategies on your company’s culture and goals
Which strategies should you focus on? You don’t need to adopt strategic HR strategies simply because they’re trending. Instead, do what makes sense for your business and your people.
Your company’s culture and goals set it apart from the competition. Both your tactical HR and strategic HR decisions should support your goals and culture.
For example, what if one of your company goals is to increase employee diversity? That can start with a strategic HR plan to reach a wide range of job seekers and build a diverse candidate pipeline.
As your workforce diversifies, strategic HR can lead programs like employee resource groups. These groups give people a place to informally share their ideas and experiences and brainstorm solutions to problems.
An added benefit? These approaches can improve employee retention.
How do tactical HR and strategic HR work together?
Without a solid tactical HR foundation, your company could run into compliance issues or payroll problems that erode employee trust and derail your strategies.
But can strategic HR strengthen your organization’s tactical HR programs?
Yes.
Good HR strategies can enhance tactical HR functions across the employee life cycle. Interviews, onboarding, performance reviews and more can benefit from strategic input to create better experiences for candidates and employees.
Strategy can also help your company avoid common HR mistakes that involve tactical HR processes.
For example, one HR blunder is hiring in a rush without identifying the skills needed for the role. This raises the risk of hiring someone who is a poor fit for the culture or lacks crucial skills.
Writing job descriptions and hiring are tactical HR tasks. An HR strategy of marketing to passive job seekers can build a pipeline of qualified candidates. That reduces the pressure to pick a poor fit just to fill the job.
An HR strategy to identify the skills needed for the company’s overall goals and culture – as well as for each role – can lead to more accurate job descriptions. It can also result in new hires who are more likely to stay.
Decide when it’s time to implement strategic HR
How do you know when it’s time for your company to start adding strategic HR to your tactical program?
There are two schools of thought on the right time to start that transition.
The traditional recommendation is that once your company reaches 50 employees, it’s time to start your HR strategy. Why 50 employees? That’s the point when companies must comply with federal regulations like the Family and Medical Leave Act and the Affordable Care Act.
The 50-employee mark is when most companies add a full-time HR generalist – if they didn’t already have one. Some also hire HR specialists for payroll and recruiting at this stage. Adding more HR talent to the team makes it easier to move past the basics of tactical HR to implement strategic HR.
However, companies don’t have to wait until they have 50 employees to start strategic HR planning.
Once your tactical HR elements are in place, you can:
- Develop talent
- Manage successions
- Improve productivity
- Boost employee satisfaction
Remember: The key is to choose strategic initiatives that align with your company’s goals.
These processes benefit smaller companies as well as larger ones. In fact, smart HR strategy can help small organizations reach the 50-employee mark more quickly and with stronger talent.
For example, a 30-person company with high employee satisfaction ratings will fill new positions faster and with better candidates than a company with a poor reputation for employee satisfaction.
With tactical HR and strategic HR, you can help your company reach its goals more efficiently. Want more tips for implementing a sound HR strategy? Download our free e-book: How to develop a top-notch workforce that accelerates your business.