Why Your Business Needs a People Strategy and How to Build Yours

Your business is only as strong as the people behind it. Without a solid people strategy, you might be setting yourself up for failure.

Your business needs a people strategy to systematically attract, develop, engage, retain, and manage a great workforce. But it's a bit more soulful than that.

People strategy creates a way of operating that will have your workers flourishing as much as your bottom line.

It's the set of organizational methods that bring your mission to life. And it's a way to get the very best out of your workers while attracting the very best talent.

HR isn't just an administrative function, and people aren't just numbers on a spreadsheet. They're living, breathing humans with unique skillsets, desires, workstyles, demographics, and perspectives.

You want to build a high-performing, engaged workforce that drives innovation and business growth. 

But how do you manage such complex processes while maintaining predictable performance? 

The answer lies in having a really good plan.

This guide will look at defining people strategy and stating its core ingredients.

We'll also explore why a people strategy is critical for business success. And to cap it all off, we will also provide practical tips for building a customized future-proof people strategy that meets your organization's unique needs.

🧑‍🤝‍🧑 What is a people strategy?

A people strategy is a strategic framework which aims to help an organization achieve its strategic objectives by aligning human capital with business goals.

Key pillars of a people strategy are attracting, developing, engaging, retaining, and managing people. The aim is to create a high-performing culture tailored to your people's individual needs, so they can bring their best selves to work and help your business succeed.

Practically, it can be laid out in a document, given as a presentation, or communicated in other ways. 

However you choose to present it, your people strategy has to align your workforce with the big goals of your company.

Who's responsible for a people strategy? 

Well, it's usually spearheaded by the organization's executive HR leader. They'll be the one who digs into the current state of the workforce and mines crucial insight from their data and expertise. They'll see opportunities for improvement and proactively drive macro-scale campaigns to drive change.

But they rarely do it alone. 

Creating a people strategy involves a good amount of collaboration through the corporate hierarchy. 

From entry-level to board-level, every employee, manager, and shareholder will have their own opinion on how it all turns out.

🕵️‍♀️ 9 Must-have elements of a people strategy

There are nine elements that work together to create a cohesive approach to managing your workforce.

You'll have to customize this approach based on your actual org setup, of course – but it'd be wise to have a stance on each of these things in some way.

Culture and values: what your organization's identity is built upon

‍Culture and values shape the behavior and decision-making of your employees and create a sense of belonging and purpose. A well-thought-out culture and values strategy involves getting everyone on board with your core values and beliefs and creating a sense of community and a shared drive. Even on bad days, your people will want to push on through.

Workforce planning

‍A people strategy should include a comprehensive workforce plan that outlines the organization's current and future human capital needs, such as skills, competencies, and organizational structure.

Talent acquisition: attracting the right people for the job‍

Talent acquisition is the process of identifying and hiring the right people for your company. You'll want to develop a strong employer brand and use various sourcing methods to attract the best candidates. A successful talent acquisition strategy involves an efficient, streamlined recruitment process that reflects your company values and hires those who have the best fit.

Talent development

Continuous learning and growth are essential to any people strategy. ‍

An effective people development strategy helps your employees acquire the skills and knowledge they need to perform at their best, creating a culture of continuous learning that helps your organization stay competitive.

🌱 Learn how to future-proof your business with a people development strategy.

Employee engagement: Creating a positive work environment‍

Employee engagement is about fostering productivity, job satisfaction, and employee well-being. It involves building strong relationships with your employees, recognizing and rewarding their contributions, and providing a work environment that supports their needs.

A great employee engagement plan helps to reduce employee turnover, increase productivity, and promote overall employee satisfaction.

Performance management: Setting expectations and giving feedback

Performance management is the process of:

• Setting expectations and goals.
• Providing feedback and coaching
• Measuring and rewarding employee performance.

This process helps align individual performance with the organization's overall goals and ensures that employees meet the required standards.

A successful performance management strategy involves regular performance evaluations, feedback sessions, and opportunities for improvement.

🖇️ Discover 6 expert-backed ways to integrate performance management and talent management.

Total rewards

A people strategy should include a comprehensive rewards system that offers competitive compensation, benefits, and work-life balance programs that attract, retain, and motivate employees.

Talent retention: Keeping the right people in your organization

If you've got good people, you'll want to keep them for the long term.

There are a few ways to do it: giving opportunities for growth and development, offering competitive compensation and benefits packages, and creating a supportive and inclusive company culture.

Do this right, and it'll helps to reduce employee turnover and ensures that you've got the right team in place to make great things happen.

💡 Want more ideas? Then , check out 25 employee retention best practices.

Diversity, equity, and inclusion: fostering an inclusive and empowering culture

‍Diversity, equity, and inclusion are critical elements of a modern people strategy. They ensure you're welcoming and supportive of all employees, regardless of their background, identity, or experience.

A successful DE&I strategy involves leading a culture of respect, empathy, and inclusivity and providing opportunities for underrepresented groups to develop and grow.

🆚 People strategy vs. HR strategy: Are they the same thing?

People strategy and HR strategy are closely related but not quite the same. 

The most significant difference is that a people strategy is a long-term plan that focuses on an organization's overall human capital needs and goals. In contrast, an HR strategy is a short to medium-term plan that focuses on managing the day-to-day HR operations and processes. 

A people strategy aims to help an organization achieve its strategic objectives by aligning human capital with business goals. It's about getting the best people for your mission and getting the best out of them. 

In contrast, the HR strategy supports the organization's HR needs and ensures compliance with employment laws and regulations. The focus falls on implementing HR policies, processes, and programs that make those outcomes possible.

In a way, people strategy could be seen as the "what" and "why" of HR, while HR strategy is the "how." But there are differing opinions out there, and there can be a crossover between the two.

🏆 7 Reasons you need a people strategy

In short, it's a fabulous idea for mission-driven, progressive companies to define their people strategy. If you need more convincing, here are some arguments for it.

1. It's an investment in business success. By investing in your people strategy, you're investing in the long-term success of your business. It can take a while to pay off, but some actions can have immediate effects.
2. It helps you attract and retain top talent. A well-executed people strategy enables you to bring in the best talent by creating a work environment that grows your company brand.
3. Increases employee engagement, productivity, and loyalty. Your people strategy should include a plan to measure and improve employee engagement, contributing to higher productivity, customer satisfaction, and employee retention.
4. Empowered employees are driven employees. A people strategy that supports employee growth and development can empower them to take ownership of their work and become more invested in your company's mission. The result will be higher levels of commitment and a sense of shared purpose.
5. Your workforce gives you a competitive edge in the market. Gallup research found companies with engaged and productive workforces to be 20% more profitable. By investing in your people strategy, you're giving your company a competitive edge and better ability for growth.
6. It enables better people management. A well-defined people strategy sets out a framework for monitoring and measuring the various metrics that matter for your workforce. Having a clear framework, in turn, enables good people management practices, more effective decision-making, and a better understanding of how people work.
7. It fosters connections on a deeper level. It also helps create a work environment that fosters a deeper connection between your employees, clients, and consumers. After that: stronger relationships and increased loyalty from all parties involved.

🪜 Build a successful people strategy in 11 steps

1. Start with a vision and back it up

Begin by defining your long-term vision for your organization's workforce. Can you distill it into a sentence? 

Here's a great example from the University of Strathclyde's people strategy framework:

"Together we will create an exceptional, Values-based work environment where colleagues feel deeply connected with the University's Vision 2025 and have the skills, motivation and reward for delivering it."

Your vision needs to be concise enough for everyone involved to understand.

Then, assemble relevant data on your people to understand the current state of the workforce. A data-driven approach will help you get specific enough for the next steps and justify your decisions to stakeholders.

2. Identify current and future problems and desired outcomes

Here's where you give it your best shot at predicting the future talent needs of your organization. It's never easy, but you can use a skills matrix to identify any skills gaps in a more structured way.

It's an opportunity to define the key challenges and opportunities facing your People operations.

• Are there market changes affecting your hiring abilities?
• Are your financial foundations able to support growth?
• Have previous people strategy plans failed or succeeded?

There's plenty that could get in the way of your plans. But there will also be some exciting, fertile opportunities to build a creative and inspired workforce. 

What are they – and given current trends, what could they be in the future?

3. Identify the pillars of your people strategy

This step is where you separate the sectors of your strategy into discrete areas. They'll probably include things like:

• Recruitment strategy: what are your incoming talent pipeline's mission, process, and values?
• Onboarding strategy: how will you help new employees become productive and engaged in their roles faster?
• Employee engagement: what's your plan for fostering an environment where people like their work and flourish daily?
• Employee retention strategy: how will you retain your best-performing talent and make people want to stay long-term?
• Performance management: how will you regularly get the best out of your workers?

You can consider other HR functions crucial pillars of your people strategy. Elements like tech enablement, office management, working hours, and benefits – consider anything that affects the people working at your company.

The good news is that you probably won't start from scratch, so you'll have a head start on some of these processes.

Ask yourself: what's a priority area right now? And what could you change that would have an immediate impact?

4. Build a strong employer brand

Now, state how you'll make people know you're a great workplace.

Being a purpose-driven organization is the foundation of this. 

Still, you can't just aim to 'be awesome' and hope people take note. 

Like many other concepts we have already touched upon, you must be strategic to make this work.

Choose the right employer branding strategy to manage your reputation in and outside the workplace. Elements like employee ambassador programs and content marketing can work wonders. But they'll need to be well-targeted and based on research – who are your ideal employees, where will you find them, and why should they pay attention to you?

5. Make the employee experience matter

Employee experience is all about providing your employees a seamless and positive experience, from recruitment to offboarding, i.e., their entire lifecycle. 

It involves tailoring work processes to fit the worker as best possible, so they'll be happy and satisfied at every touchpoint in their employment journey with you.

How do you do that in practical terms?

Promoting a supportive and collaborative workplace is vital. You should start by running regular social check-ins, collaboration schemes, and informal meetings. 

An upgraded employee experience might also involve mindful office design or offering ergonomic work equipment if your people prioritize these elements. 

You can plan, guide and measure the employee experience. So you can get as specific as you like – just make sure to account for it when creating your people strategy. 

6. Prioritize learning & development

People development is your key to maintaining continuous growth and success. When your people get better, so does your company.

In strategic terms, you should define its importance to your company and how you'll invest in your people. Then, you'll want to provide them with the right tools and resources for appropriate upskilling and the encouragement and support to make it happen.

A culture of learning will lead to more and more of your workers having a growth mindset – and in a competitive market, that's essential!

7. Create an inclusive environment at work

Outline how you'll foster an inclusive and diverse work environment where employees feel respected, valued, and empowered.

For some companies, this is a checkbox formality. For others, it's a core part of their mission.

You want to enable everyone to bring their best selves to work. That can't happen with a homogenous workforce with no cognitive diversity. 

Making a conscious effort to transparently and fairly promote diversity, equity, and inclusion in the workplace is a good solution.

8. Incorporate measures for boosting health and well-being awareness

Well-being might not play a part in every people strategy out there – but why wouldn't you want your staff to be healthy and happy?

We firmly believe any HR vision should outline how you'll support your employees' physical and mental health and well-being.

That might include wellness programs that encourage physical activity, enrolment in Employee Assistance Programs, or other related benefits.

It could also include declaring a stance on hybrid working schedules for workers, virtual and remote training, and so on.

9. Create a plan for communicating the new people strategy

Your brand-new people strategy can't just be locked away in a document only to be seen by HR managers. 

Everyone involved (aka the entire organization) needs to see, hear, and understand it. Else, it's not going to work.

Making a killer people strategy presentation is one excellent way to do it. You can also do it using company-wide meetings or town halls, emails, newsletters, intranet posts, office posters, and so on.

There are other types of content that communicate your employer brand. Consider if any of these are appropriate for your branding: social media, podcasts, PR, and other comms.

Two essential elements to cover in your strategy are:

• How will it continuously be communicated over time?
• Who's going to be responsible for it?

10. Ask your team for feedback

Seek feedback on this strategy from your employees because they're the ones this will impact the most. They'll help you identify gaps, areas for improvement, and reasons for concern.

Use this feedback to refine and adjust your people strategy as needed. While you will have an initial phase of communicating and rolling out the plan, it'll end up as an ongoing process. So plan (and have proper systems) for regular feedback on how it's going from everyone affected.

11. Measurement and evaluation

Finally, like any good plan in life, you have to define how you will measure it. 

What do you need to happen for you to call your people strategy a success?

Through the months and years, you'll want to track progress and make regular reports on the most important metrics. Use this data to continuously improve your initiatives and align them with business goals.

You've got to be mindful of how it's working out. 

And be ready to adjust as you go. 

Owners and executives will have a keen eye on your KPIs, but it shouldn't be too challenging to show success if you've planned a smart strategy from the start.

💡 Want some practical examples of people strategy in action? We've collected case studies from companies that made the right moves – and made people love their work. Check out our people strategy examples.

🤩 And to help shape your ideas about strategy, you can start by working on how you'll communicate it. Use this free people strategy presentation template to bring your plan together nicely.

➡️ Drive a successful people strategy with Zavvy

Developing a people strategy can seem like a lot of work. We're not going to lie – it usually is. But the payoff can be transformative.

If you'd like an organization where people look forward to their work and happily give it their all, having a strong people strategy is crucial.

At Zavvy, our employee enablement platform provides a suite of tools for the most critical processes in people strategy:

• 🚀 Employee onboarding
• 🔁 360-degree feedback
• 📈 Performance reviews
• 👯 Connection programs
• 👩‍🎓 Learning management
• 🧭 Career pathing
• 🌱 Employee development

Book a free demo if you'd like to see how it can support you and your people.