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Human Resources

How to Create a Business Driven HR Strategy

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Over the last few years, HR has become a more important part of business strategy. HR leaders are now being invited to sit at the table and talk about how their efforts and activities will help drive the company forward. Many business leaders are recognizing the difference HR can make.

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When all is said and done, HR strategy must support the business as a whole. It must also increase HR’s value to the business.

How can you create a business driven HR strategy? The steps outlined here will help you on your journey.

Align HR Goals with Business Goals

If you already have an HR strategy in place, take a look at how it aligns with the overall business strategy. Do your goals support the larger vision for the business, or is there a serious mismatch?

The first step in creating a business driven HR strategy is creating alignment between HR and the company. When HR’s goals strive to support what the business hopes to achieve in real and tangible ways, HR becomes a strategic partner in the business.

Align Business Goals with HR

Another way to go about making a business driven HR strategy is to ensure some of the business’s goals include HR imperatives.

Take a retail operation for example. You want to deliver the very best customer service to your clients. To do that, you need the right people on your team. Hiring the right people must be a focus for the business, which puts HR front and centre.

The same might be true of an employer that wants to create innovative products. To get the talent and creativity needed to accomplish this goal, HR is going to be essential. Not only will HR need to focus on hiring the right people, they’ll also need to build the right culture for the business.

Demonstrate How HR Contributes Financially to the Business

One of the challenges in HR has long been demonstrating its financial contributions to the business. If your HR strategy is going to be business driven, then you must focus on delivering real value. That value has to be tangible, backed up with numbers.

Take a look at the goals you outlined in your strategy. How does achieving these goals add value to the business? Ask yourself what the financial returns are on achieving a goal in the company.

Develop Tactics and Processes

Now that you’ve defined goals for HR and demonstrated how they contribute to growing the business, it’s time to develop the tactics and processes you’ll use to achieve those goals.

What initiatives can HR take to support business goals? If you want to grow revenue, what tactics will HR use to ensure their operations work towards this goal? It can be difficult to see how something like adopting a new benefits package or a new human resources information system can contribute to increased revenue.

Ultimately, they can do just that. A better benefits package can incentivize employees and help them engage with their work. In turn, they’ll be more productive and less likely to leave. More productive employees help you grow revenue, while lower turnover reduces your expenditures.

Show How HR Connects with Other Departments

The final step when you’re developing a business driven HR strategy is to think about how HR’s initiatives support other aspects of the business.

It’s easy to see how hiring the right people can improve IT or marketing. How does building a better culture impact these departments and help them achieve their goals?

Demonstrating how HR supports other departments, and the business as a whole, will help you get buy-in for your business driven HR strategy.

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Michael Noronha

Michael Noronha

Michael Noronha is a client success associate with the JungoHR team. With three years of experience in human resources and four years of experience in customer service, Michael has an array of expertise in various areas of the HR field. His industry knowledge spans from retail, beverage and food, air cargo, IT consulting, benefits insurance, and financial services. A certified human resources professional with a Human Resources Management Certificate from Sheridan College, and an Hons. BA from the University of Toronto, Michael's aim is always "continuous improvement." He strives to enhance the human aspect of human resources through all stakeholder interactions. Michael also has a love for sports and is an avid food blogger in his spare time.

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