Strategic HR is about so much more than managing paperwork or running processes. It’s about empowering your HR team to drive real impact using people data to shape business objectives and weaving HR initiatives directly into the fabric of company goals.
When your HR strategy aligns with broader business priorities, you create stronger, more resilient organizations. Talent acquisition, retention, and culture-building efforts all start pulling in the same direction, helping your company perform better while creating an environment where employees can thrive.
Shifting to strategic HR is a significant investment. Like any other investment, it promises significant returns. Here are some of the benefits your organization can get from making this change.
Your workforce is your organization’s primary resource, with employee performance and engagement being the primary metrics used to determine how well you’re utilizing it.
Employee performance is tied directly to progress towards broader organizational goals, and strategic HR allows your HR team to find opportunities for improving performance at scale.
On the employee engagement side, strategic HR allows the organization to offer growth opportunities systematically and keep people engaged throughout their careers. Strategic HR also makes reinforcing company culture throughout the organization a priority, helping improve employee engagement.
Attracting top talent is a priority for every organization. A strategic approach to HR means HR professionals distill organizational goals into necessary skills that inform hiring plans and practices. From there, HR teams can craft job descriptions that speak to the best talent in your field, properly recognize that talent in interviews, and make them offers they can’t refuse.
But that’s not all. Strategic HR is crucial to retaining that top talent once they join you, too. Top talent rarely joins an organization expecting to stay in the same role. They’ll either get the experience they need at your organization and leave for a more prestigious role elsewhere, or they’ll capitalize on growth opportunities within your company.
Your HR team can ensure your top talent has all the opportunities to grow and reach their potential.
Your organization will run into challenges that stretch your most thought-out plans to their breaking points. Leaders in all departments know they need to build agility into everything they do. Here’s why strategic HR has a key role to play here:
Your HR team has the data and the birds-eye-view needed to foster agility throughout your organization, making it more resilient to change.
The decisions your leaders make and how you use your resources have a massive impact on your organization’s success. Whether it’s cash, talent, or other assets, strategic HR is essential to helping your organization make the most of all its resources.
Strategic HR gives leadership the data they need to know they’re getting the most out of their dollar in everything they do, like employee training, retention, and recruiting efforts.
HR efforts are crucial for streamlining processes throughout the organization, driving efficiency, and reducing the cost of every project. Additionally, every HR effort that reduces turnover reduces recruitment costs.
It’s much easier to retain and train existing employees than to recruit new ones, and HR initiatives keep employees satisfied and loyal. Your HR team is at the frontline of managing any issues employees run into, fostering relationships between coworkers, improving how leadership relates to the rest of the workforce, and more.
Recognition and appreciation are the building blocks of employee loyalty, and HR leads the charge in making employees feel recognized and appreciated.
Your company culture might have initially been based on your founder’s values, but HR is more involved in building and spreading company culture as your organization grows. Reinforcing desired behaviors in every training, keeping employees engaged with the organization’s mission, and routinely sharing company values through every channel all reinforce company culture.
It isn’t just about building and maintaining culture, though. Strategic HR keeps company culture aligned with business objectives, too. In too many organizations, culture is built in a silo, leading to clashes with organizational strategy, making employees feel like they’re being pulled in multiple directions at once. Strategic HR brings the two together.
Look at Pixar, which has a culture rooted in inclusivity, where everyone has a place in stoking the fires of creativity the studio is known for. Initiatives like professional training and development, creative workshops, volunteering opportunities, and commuter assistance all contribute to fostering this culture of belonging in ways that contribute to the company’s goal of pushing creativity further with every film.
Consider Spotify, which calls its employees a “band,” channeling the energy of the musicians its product caters to. With mental health support being a key part of their culture, they’ve made some of their employees mental health ambassadors, who volunteer a few hours a week to plan and drive mental health initiatives while being a resource for employees. That’s the kind of widespread initiative only possible with strategic HR, and it directly reinforces key aspects of Spotify’s company culture.
This doesn’t happen in a vacuum. By working closely with other leaders, HR can ensure company values are reflected in every policy.
There’s more than one way to give your organization a competitive advantage, but one stands above the rest: sustainable growth. An HR team working in a data-rich environment and sitting at the leadership table can contribute to important decisions, giving leaders what they need to achieve sustainable growth.
Additionally, your workforce is your main competitive advantage, and HR helps keep it that way. By maintaining employee satisfaction and improving engagement, HR ensures everyone is giving their best on every project.
There was a time when HR focused on administrative duties, but this has shifted towards a more strategic role. HR leaders collaborate with leadership from other departments on broader organizational goals rather than being siloed away to handle employee matters. Strategic HR allows HR professionals to contribute to long-term business goals by providing workforce data, aligning HR initiatives with other strategies, and spotting potential challenges before they come up.
People strategy shouldn’t happen in a silo, nor does it need to be purely reactive. With strategic HR, leaders work closely to ensure better alignment between HR initiatives and strategies throughout other departments. This approach reinforces culture and values in every initiative, ensures projects work to improve employee engagement rather than detracting from it, and more effectively matches people with the kind of work they’re best suited to.
HR will find itself at the forefront of innovation in many organizations. One example? AI. HR teams are often among the first to deploy AI tools in their day-to-day operations to streamline data management and handle repetitive tasks. They’ll be considered leaders in this field and expected to lead the transformation towards reliance on AI.
But strategic HR has a hand in managing change overall, not just with technology. By keeping abreast of broader market trends and internal data, they’re best suited to guiding leadership in making stronger choices when reacting to evolving requirements.
Closely monitoring key performance indicators (KPIs) is crucial for determining a project’s effectiveness in any field. Strategic HR applies this to building a workforce that can crush any goal your organization sets.
HR professionals already measure important KPIs like employee engagement, retention, and productivity. When HR becomes a strategic partner instead of an administrative function, that data works to serve leaders in every department, helping them build stronger teams and drive towards important goals.
Your HR strategy requires a significant investment, but making that investment doesn’t have to be complicated. Here’s a simple plan every organization can follow.
Know where you’re going before you start making your plan. What does strategic HR look like for your organization? What kind of role do you expect your HR leaders to play? These questions should start guiding you towards finding out what your organization needs from its HR team.
From there, start hammering out your goals. What are the metrics you’ll track to determine success? Employee engagement? A reduction in turnover? It’s best to begin with a few metrics rather than trying to improve every aspect of your people strategy at once.
Administrative HR is reactive, responding to the organization’s HR needs as they emerge. Strategic HR is proactive, meaning you need to figure out your initiatives on a rolling basis, usually at the beginning of a fiscal year or financial quarter. You can do this by taking the needs and goals you’ve already identified and brainstorming initiatives that could make a dent in them. Examples of these include:
When implementing strategic HR initiatives, it’s easy to lose sight of who they’re meant to support: your employees. Building consistent feedback channels for employees is essential. One of the best ways to do this is by deploying an all-in-one performance management platform like 15Five, which automates surveys and similar data collection methods.
Roll out your HR strategy steadily and consider using a pilot project—a small-scale test of your overall strategy, with only a department or two—before applying it to the entire organization. As you do, keep an eye on your success metrics and track how they change. If you notice a downward trend, review your strategy to see if you can isolate the elements creating this negative impact and roll them back.
From there, monitor progress overall to see how effective your strategy is.
Here are just a few examples of 15Five customers and the HR strategies they put in place:
Here’s a quick cheat sheet you can use to make your HR department more strategi.
The more strategic leaders can be in their day-to-day, the more this will impact operations throughout the organization. Here are just a few things leaders can do:
The HR world offers technology that makes repetitive HR tasks easier and gives you the data you need to build a more robust strategy. A performance management platform like 15Five can help HR leaders work more effectively by:
These advanced tools automate the administrative part of HR while empowering your strategic efforts.
Continuous learning isn’t just important for employees looking to improve their performance. HR leaders and their teams need to consistently improve the way they work, challenge their biases, and use data to inform every improvement they make. Being a strategic partner means being able to constantly demonstrate the value of your initiatives while charting a course for future improvements.
Constant reflection is a crucial part of turning HR into a strategic function. Guide your reflections with the following questions:
Strategic HR makes HR leaders a key partner for the rest of your organization’s leadership, allowing them to tie HR initiatives to broader business goals. By driving employee engagement, attracting and retaining top talent, and contributing key data to other initiatives, the HR team can become a strategic partner in any organization.
This isn’t a one-time effort. HR’s role in broader strategy will only grow, and that will require constant attention and adaptation, based on data, market trends, and feedback from employees.
Need to re-evaluate the role of strategy in your HR processes? Start here: