Importance of Aligning HR Strategy with Business Strategy

 As individuals, employees have needs aspirations, motivations, desires, and interests that influence their behavior at work but unfortunately, these objectives sometimes come in conflict with the corporate objectives of an enterprise. Organizations must constantly improve performance in a rapidly changing economic environment, focusing on cost reduction, innovation, quality, productivity, and market speed to stay competitive. In reconciling this conflicting interest human resources management and planning are useful tools employed in harmonizing the needs of the employees with the goals and objectives of the organization continuously.

“Organizational alignment is a key differentiator between high-performing and low-performing companies. In fact, research by LSA Global found that highly aligned companies grow revenue 58% faster, are 72% more profitable, and outperform unaligned peers in employee engagement, customer satisfaction and retainment, and leadership” Kristin Ryba, 2021.

There are several ways to align HR strategy with business strategy. One important step is to ensure that HR leaders have a good understanding of the organization's business strategy. Another important step is to develop HR metrics that are linked to the overall business goals. This will help HR leaders to track their progress and make adjustments to their programs and initiatives as needed.

·         Involve employees in the planning process: When developing goals and strategies, organizations should involve employees at all levels. This will help to ensure that employees have a buy-in to the goals and strategies and that they understand how they can contribute to their achievement.

·         Communicate clearly and frequently: Organizations should communicate their goals and strategies to employees clearly and concisely. This should be done regularly, both through formal and informal channels. Employees need to understand what the organization is trying to achieve and how their work contributes to those goals.

·         Better talent management: HR can help the organization to attract, retain, and develop the talent it needs to achieve its strategic goals.

·         Increased innovation: HR can create a culture of innovation and creativity, which can help the organization to develop new products and services and stay ahead of the competition.

·         Provide opportunities for development and growth: Organizations should provide employees with opportunities to develop their skills and knowledge. This will help employees to feel that they are valued and that they have a future with the organization. When employees feel that they are growing and developing, they are more likely to be engaged and motivated in their work.

·         Offer competitive compensation and benefits: Organizations should offer competitive compensation and benefits packages. This will help to attract and retain top talent and to show employees that they are valued. When employees feel that they are being compensated fairly and that they have good benefits, they are more likely to be engaged and motivated in their work.

“Human Resources can no longer be viewed as just a service-oriented department but rather an essential partner in business decision-making. Whether defining business goals and forming strategic plans starts with the executive team, the HR team, or another department, HR will play an essential role in achieving success” Erin Aldridge, 2023.

Erin Aldridge, 2023: 5 Steps to Align HR with Business Strategy

By harmonizing organizational goals and strategies with employees' goals and expectations, both employees and the organization will get benefits. Finally, this will lead to a more engaged and motivated workforce, and to improved organizational performance.

 

References

Ali Divandari and Fereshteh Amin, 2015, Alignment of Business Strategies and Human Resource Strategies in Banking Industry [Online], Available from: https://www.researchgate.net/publication/324770265_Alignment_of_Business_Strategies_and_Human_Resource_Strategies_in_Banking_Industry, Accessed 15^th Nov 2023.

Art Johnson, 2021, How to Align a Human Resources Strategy to Your Organization’s Objectives [Online], Available from: https://trainingmag.com/how-to-align-a-human-resources-strategy-to-your-organizations-objectives/, Accessed 14^th November 2023.

Erin Aldridge, 2023, Align Human Resources (HR) with Business Strategy [Online], Available from: https://educate360.com/blog/align-human-resources-hr-with-business-strategy/, Accessed 14^th November 2023.

Kristin Ryba, 2021, How to Align Individual, Team, and Organizational Goals for Success [Online], Available from: https://www.quantumworkplace.com/future-of-work/how-to-align-organizational-goals, Accessed 13^th November 2023.