What is a people strategy?

A people strategy is a comprehensive plan designed to align an organization’s human resources and talent management practices with its overall business objectives. It encompasses various elements such as recruitment, development, engagement, performance management, and retention to ensure that the workforce is skilled, motivated, and capable of driving the organization’s success.

What is the primary goal of a people strategy?

The primary goal of a people strategy is to create a high-performing, agile, and inclusive workplace culture that supports the company’s strategic goals and long-term vision.

A people strategy ensures that human resource initiatives align with the company’s overall goals. This alignment helps:

• Achieve business objectives
• Foster employee engagement
• Enhance productivity
• Build a positive company culture
• Supports talent acquisition and retention

All of these are vital for sustaining competitive advantage.

How can a people strategy be aligned with business goals?

Aligning a people strategy with business goals involves understanding the organization’s strategic objectives and then designing HR practices that support these goals. This can include workforce planning, identifying skills gaps, succession planning, and creating development programs that help employees acquire the necessary skills to meet future business needs.

What are the key components of an effective people strategy?

Nine components work together to create a cohesive approach to managing your workforce. Each component is pivotal in ensuring the workforce is capable, motivated, and aligned with the business objectives.

Culture and values—the foundation of your organization’s identity

‍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 are 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.

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 six expert-backed ways to integrate performance management and talent management.

Total rewards

A people strategy should include a comprehensive total rewards system that offers competitive compensation, benefits, and work-life balance programs to attract, retain, and motivate employees. Total rewards encompass all the tools available to an employer that may be used to attract, motivate, and retain employees. These can be both monetary and non-monetary rewards, such as:

• Salary and wages: Offering competitive salaries and wages is crucial for attracting top talent and reducing turnover
• Bonuses and incentives: Performance-based bonuses and incentives can motivate employees to achieve higher levels of productivity and align their efforts with the company’s goals
• Retirement plans: Offering retirement savings plans, such as 401(k) with employer matching contributions, helps employees plan for their future and enhances long-term loyalty to the company
• Paid time off: Generous vacation policies, sick leave, and parental leave programs demonstrate a company’s commitment to work-life balance and employee well-being.

Complimentary resources:

• 10 Fair Employee Compensation Strategies For Global Teams
• 3 Types of Compensation: Choose the Best One for Your Team
• Paid Annual Leave Per Country: Global Guide

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 help to reduce employee turnover and ensure that you’ve got the right team in place to make great things happen.

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.

Complimentary resource: Managing Workplace Diversity: Successful Global Workforce Planning

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

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.”

What are the reasons organizations need a people strategy?

There are multiple reasons why any organziation needs a people startegy:

• It helps 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
• 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
• Empowered employees are driven employees: A people strategy that supports employee growth and development empowers workers 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
• 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
• 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
• 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
• It contributes to organizational resilience: A people strategy contributes to organizational resilience by building a flexible and adaptable workforce—it includes succession planning, upskilling and reskilling programs, and fostering a culture of continuous improvement; this approach ensures the organization can quickly respond to changes, overcome challenges, and sustain long-term success

Free resources:

• Succession Planning Template
• Leadership Development Plan Template

What are the challenges in developing a people strategy for a diverse workforce?

Developing a people strategy for a diverse workforce involves understanding and addressing the unique needs and expectations of different employee groups. Common challenges include:

• Managing cultural differences: Navigating varied cultural norms, values, and communication styles to create an inclusive work environment
• Ensuring inclusivity: Developing policies and practices that ensure all employees feel valued and included, regardless of their background
• Preventing biases: Implementing measures to identify and eliminate conscious and unconscious biases in recruitment, promotion, and day-to-day operations
• Catering to various demographics: Creating policies and benefits that cater to the needs of different age groups, genders, ethnicities, and other demographic factors
• Effective communication: Ensuring clear and effective communication across diverse teams, which may include language barriers and different communication preferences
• Continuous feedback: Establishing systems for regular feedback to understand the evolving needs of a diverse workforce and adjust strategies accordingly
• Balancing flexibility and consistency: Providing flexible work arrangements to accommodate diverse needs while maintaining consistency in policies and practices.
• Training and development: Offering training programs that address the specific development needs of various employee groups and promote cultural competency among all employees
• Legal and regulatory compliance: Navigating different labor laws and regulations that apply to a diverse and potentially global workforce

Effective communication and continuous feedback are essential to overcome these challenges and create a cohesive, productive, and inclusive work environment.

Streamline your people strategy with Deel

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. Our platform will help you streamline all pillars of your people strategy:

• Employee onboarding: Welcome all team members warmly and give them the tools to ramp up rapidly and become productive
• Performance reviews: Ensure that your teams are performing at their highest level of productivity with our performance review software
• Connection programs: Facilitate peer connections and give employees a positive outlook on their work
• Learning management: Enable your workers to expand their knowledge and acquire new roles with a personalized learning path
• Career progression frameworks: Help employees visualize career growth trajectories, access resources for growth and development, and uncover new career opportunities
• HRIS: Easily manage HR for workers compliantly in 150+ countries—unify reporting and automate HR admin
• EOR: Hire employees globally—we quickly hire and onboard employees on your behalf, with payroll, tax, and compliance solutions built into the same, all-in-one platform
• Global payroll: Consolidate and streamline your international payroll operations—run accurate, on-time payroll across all team timezones

Book a demo to see how our solutions will help you streamline your people strategy.