Personnel strategy in the company - how to prepare it?

Service Business

Each, even the smallest company, operates within a specific strategy. Initially, it is a plan in the owner's head, then - as the business grows - it is put on paper and passed on to subsequent employees (and / or partners). An important, but often neglected element of the company's overall strategy is the personnel strategy (HR strategy). What exactly is she? How do you know when it's time to spend some time with her? How to build it? You will find the answer to these and other questions related to HR strategy in this article.

What is a personnel strategy?

Before we talk about how the company's personnel strategy should be created, we will explain what it actually is. As mentioned in the introduction, it is part of the company's overall strategy, together with e.g. financial strategy, marketing strategy, production strategy. It concerns - as the name suggests - human capital management in the company.

It is a kind of pattern that sets the directions and methods of making personnel decisions in the company. It is created as a long-term concept of employee resources, aimed at their proper shaping and involvement. Its purpose is to support the organization in achieving success.

There are two main principles that should be followed when creating an effective personnel strategy:

  • is derived from the company's overall business strategy,
  • strengthens the interests of both the employer and employees.

There are many classifications of personnel strategies in the literature on the subject, but they will not be presented in this article. It is worth mentioning that each company has its own specifics, therefore it is impossible to present one proven personnel strategy. However, using the available models of operation and adjusting them to specific needs, conditions and circumstances can bring very good results.

What kind of strategic activities does the personnel strategy cover? It should be mentioned above all about:

  • planning - how many and what employees we will need, which employees should be dismissed, which should be transferred to another department,
  • recruitment and selection - how will employees be recruited, from what sources,
  • employee development and improvement - what is a career in the company, what are the promotion opportunities, what is the training strategy,
  • research on employee resources - what is the level of specific competences among the staff, whether the actions taken have brought the desired effect,
  • motivating and rewarding employees - what is the remuneration system in the company, on what activities will the company's motivation system be based,
  • evaluation system - how will employees be assessed, by whom, according to what criteria,
  • the manner of dismissing employees - how to proceed when dismissing personnel.

In accordance with the above-mentioned the principles of the personnel strategy, each of the above-mentioned activities should be closely related to the overall functional strategy of the company.

A small company cannot afford to operate without a personnel strategy

Someone might say that such a personnel strategy is an unnecessary element in a small company. When employing several employees, there is no question of management - everyone performs the duties entrusted to him, and that's it. Nothing could be more wrong! It turns out that one of the serious barriers to the development of small businesses is inadequate management of people, and thus - ineffective use of human potential.

Every business owner should be aware that the greatest treasure of his enterprise is people. Both at the stage of sole proprietorship (where everything depends on the involvement of the only employee - the owner), and when employing a dozen or several hundred employees, the entire activity of the company depends on people. It was, is and will be - at least until computers are responsible for customer service and most of the tasks.

This is its foundation which, if properly strengthened, can provide a strong foundation for creating something really big. Moreover, people are a resource that our competitors cannot copy from us. Other companies may double and triple when trying to duplicate our product or service, but they will never be able to copy our human resources. Understanding the importance of human capital in a company is the basic task of a person who starts and runs his own business.

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How do you know when it's time to develop and implement a personnel strategy?

That is why, also in small companies, the personnel strategy is an extremely important factor. Of course, up to a certain point, it may be the result of the owner's thoughts and intuition, but over time it may become necessary to develop a real strategy. How can you tell when this time has come?

First of all, after the disturbing conclusions from the analysis of the company's financial indicators. This is because unfavorable results may be the result of a decrease in employee productivity or the inability of the staff to achieve the assumed goals (e.g. due to the lack of appropriate competences or overloading with duties). Another symptom is undesirable employee behavior, such as high rotation, frequent absenteeism, lack of understanding of the organization's goals, lack of initiative and commitment, conflicts in teams.

The entrepreneur can also receive signals that come from outside the company's internal environment. The external factors that should persuade the owner of the company to implement a carefully thought-out personnel strategy include, for example, an increase in customer expectations, a decrease in market share due to the activity of competitors, the emergence of new technologies.

The above signals should make the entrepreneur consider whether the company employs the people it really needs, whether the employees are properly motivated, whether there is a shortage of resources, whether the staff has the right competences, whether the employees' potential is properly used ...

How to develop a personnel strategy?

There is no single recipe for creating an appropriate and effective personnel strategy. However, when developing such a pattern of activities, it is worth answering the following questions first:

  • Where are we now?
  • where do we want to be in two or four years?
  • how do we want to achieve it? what methods and resources will we use for this purpose?

The entrepreneur needs to answer these questions:

  • determining the strengths and weaknesses of human resources in the organization,
  • determining the participation of employees in the decision-making process at individual management levels,
  • defining the system of selecting and applying motivational incentives in the personnel management process,
  • determining what the remuneration policy looks like,
  • developing a system to improve employee qualifications,
  • creating a recruitment and evaluation system for employees.

When creating a personnel strategy, its main goal should be kept in mind - better use of human resources. The connection with the general functional strategy of the company cannot be forgotten either. Awareness and understanding of the latter is extremely important because it allows you to define the key driving forces of a given business. Thanks to this, it is also possible to determine what contribution employees have to the company's success (and this is necessary to build an effective HR strategy).

It may be a good idea to carry out the so-called company SWOT analysis. On this basis, it will be possible to define critical points in human resource management and propose solutions that will then be implemented.

It should be remembered that building and implementing an efficient HR strategy in a company is a long-term but very profitable process.Already at the very stage of developing a behavior pattern, you can develop your knowledge about the enterprise and notice factors that favor or hinder the achievement of goals.