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What Is People Strategy?

April 7, 2021
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Regardless of your company’s size or function, it’s likely that your employees play a big role in determining what your values are. For an organization to drive and sustain growth, its business and HR goals need to intersect, and having a People strategy is one way to make this happen.

People strategy: The set of practices that determine how you attract, retain, and grow your employees in order to best accomplish your company’s mission.

At their core, People strategies are put in place to keep businesses, HR teams, and employees aligned. For HR teams, they are a way to drive business outcomes, like increased productivity or reduced turnover. For employees, People strategies are structured to help them reach their fullest potential through support programs and learning and development resources.

Having a People strategy is important for any organization looking to engage, develop, and retain its workforce, making them an essential part of your overall business strategy. 

People Strategy vs. Human Resources

HR has come a long way since its early, mostly administrative origins. While they can overlap, People strategies and HR strategies are different tools, and it’s important for HR professionals to be aware of the distinctions between the two.

Human Resources People Strategy
• Recruiting and keeping top talent
• Building onboarding and payroll processes
• Managing employee database and logistics
• Implementing performance management
• Establishing compensation structures
• Mitigating risk factors and ensuring compliance


• Enabling employee growth
• Improving the employee experience
• Establishing a feedback culture
• Nurturing respectful communication
• Fostering diversity, equity, and inclusion
• Responding to workforce needs

The differences between HR and People strategies are subtle but fundamental. While HR strategies focus on building systems to attract and retain talent, People strategies focus on building relationships between organizations and employees.

“If HR strategy lays the foundation for high-performing teams, People strategy is what unlocks employees’ potential and empowers them to exceed their business goals. This encompasses all activities that drive employee growth and performance, from enhancing engagement to building an inclusive culture,” said Emily Beugelmans Cook, a People Strategy Consultant with Lattice’s Advisory Services.

Why do you need a People strategy?

While not every organization has a People strategy in place, there are a number of reasons why it’s in every company’s best interest to make creating one a priority. An effective people strategy can help support overall business goals by improving employee performance. But most importantly, it places employees at the forefront of your organization’s vision, which can have long-lasting positive effects.

1. Empowered employees are driven employees.

Empowering employees to grow is about giving them the tools, resources, and environment they need to thrive. When your employees feel supported by their leadership and company practices, they’re more likely to develop in areas aligned with business goals and even improve your customer experience.

“Highly engaged employees hold high regard for the quality of their service for both customers and the organization...They’re also observant of customer needs, which contributes to higher customer satisfaction levels,” said Sherry Mae, Chief Marketing Officer at Tankarium.

On the other hand, an employee that feels unheard or neglected is likely to leave or underperform, which is a lost opportunity — and added expense. The cost of losing an employee can range from tens of thousands of dollars to twice their annual salary.

2. Engagement leads to loyalty.

Engaged employees don’t just deliver on expectations –– they help evolve them. Good People strategies acknowledge that the relationship between companies and employees goes both ways. 

“When employers value and encourage their employees, they see increased levels of loyalty. Employees who know that they are being developed by their companies work harder and stay longer. The investment in time and effort is a great pay-off for companies,” said Dr. Belinda Wee, associate professor at Husson University’s School of Business and Management.

Survey data from Gallup shows that companies with highly engaged teams are over 20% more profitable and 17% more productive. They were also 41% less likely to have problems with absenteeism.

When employees feel connected to your company and mission, they’re more willing to give their best effort in advancing your business. Responding to employee feedback and engaging employees in decision-making processes will encourage them to stand by you through both fortunate and difficult times.

3. Businesses can connect on a deeper level.

When you implement a People strategy, you’re demonstrating your commitment to employees’ wellbeing. The pandemic upended plans for most businesses in 2020, but it also pushed HR teams to invest in their people’s mental and physical health more than ever.

“HR leaders saw a significant change in their job descriptions in 2020... Part of that is now needing to lean in on normalizing mental health in the workforce, ensuring employees know it’s okay to not always be okay at work,” said Julie Gurican, Senior Director of People at BenchPrep.

It’s become clear that employees value support, security, and flexibility more than they value new office spaces and workplace perks. At the end of the day, your employer brand is defined by how attuned you are to your employees’ needs. Business and HR teams can now focus on building lasting support systems that benefit a wide range of employees.

4. The best growth comes from within.

When it comes to building successful teams, companies can either compete with other businesses for new talent or develop talent from within. It’s tempting to focus on attracting the best candidates in the hiring pool, but there’s a lot to be said for investing in the growth of your existing employees.

“Some knowledge is priceless, so it’s just a much better investment to promote and train current employees. Succession planning ensures that your company has a history, lasting relationships, and a base of employees who are invested in the outcomes of the company — because the company has invested in them as well,” said Amy McWaters, CEO at The Hamper Emporium.

Apart from the positive relationship that develops between organizations and internally developed employees, prioritizing employee growth allows businesses to save money and time on recruiting and training new hires. Existing employees are familiar with your company’s nuances and are more likely to be self-sufficient and tuned in to organizational goals. Having a People strategy that promotes growth opportunities is one way to get the most out of your existing workforce.

Most companies have clear product and go-to-market strategies that are deeply contemplated, debated, and refined. But when it comes to a strategy for their people, who are the foundation on which all other business strategies depend, things can quickly get murky or nonexistent.

People strategy signals a new approach to how organizations attract, retain, and develop their employees, and this change in mindset isn’t temporary –– it’s here to stay.

There is no one-size-fits-all approach to People strategy: Yours needs to reflect your business needs and company culture. To learn how Lattice’s Advisory Services empowers you to build a People strategy tailor-made for your organization, get in touch today.