HR strategy: The guide to modern human resource management

The vision is derived from the purpose of the organisation and the business strategy and formulates an ambition of what HR wants to achieve for the organisation in the future. It helps to summarise this as a narrative that conveys in an attractive form where the function wants to develop.

The mission focuses more strongly on why the organisation needs HR and what contributions are made to which stakeholders in the business. Vision & Mission enable effective communication with all stakeholders who are important for Human Resource Management.

Examples of HR vision & mission statements can be found here:

• Human Resources Mission Statement Examples
• HR Mission Statement: 5 Examples to Create Your Own

Strategic directions define the priorities of the HR function. These priorities are derived from the critical value contributions of human resource management to the business strategy and the HR strategy derived from it. Good strategies describe an ambition level for each strategic thrust. This makes the goal clearer for everyone involved. HR thrusts are often related to the employee life cycle, but prioritise areas derived from the business strategy.

The so-called roadmap concretises the HR initiatives and makes them tangible for everyone involved. It defines what needs to be done by whom and by when in order to achieve the goals. Timetables in the form of Gantt charts or horizon charts are often used to make dependencies clear. These are usually supplemented with fact sheets for each initiative, which describe (interim) goals, success criteria, activities, resources and stakeholders. It has proven useful for focussing purposes to explicitly define what should not be considered.

Strategy has a medium to long-term effect. It is therefore important to define indicators that the organisation can use to measure whether it is on the right track. The answers in the employee survey on the quality of development support, for example, can be a good indicator of whether an organisation is successfully tackling its skills transformation.

The digital transformation is having a profound impact on human resource management. Modern HR strategies must include the implementation of advanced technologies and digital tools that automate administrative tasks and enable data-driven decision making. This includes systems for talent management, performance management, compensation management and advanced analytics. Therefore, a corresponding thrust can be found in many HR strategies.

As already mentioned, a future-orientated HR strategy takes external influencing factors into account. This also includes social changes and trends, such as increasing diversity in the workforce or changes in the world of work due to globalisation and remote working. The ability to respond to these trends is crucial for maintaining a dynamic and inclusive corporate culture and satisfied employees.

A personnel strategy defines the company's personnel policy orientation. This means that the HR strategy is closely linked to the business strategy. For personnel or knowledge-intensive organisations, it is usually fully integrated. The implementation of the HR strategy usually requires the cooperation of the company management, the management and the HR department.

The aim is to support a company's business strategy by optimising the use and development of human resources. An HR strategy serves as a framework to ensure that the organisation deploys the right people with the right skills at the right time to achieve its goals. A well-thought-out HR strategy takes into account all aspects of HR work, from recruitment to development and employee retention.

Typical elements of HR strategy:

• Workforce structure: Which employees with which skills are needed where to compete?
• Organisation: How is collaboration fundamentally organised?
• Culture: What shared values, norms and beliefs for thinking and behaviour in the company are necessary for successful business?
• Leadership: What role do managers play in achieving business goals?

The HR strategy builds on the HR strategy by making explicit what the HR function's contribution is to achieving it. It therefore focuses more strongly on the operational aspects of human resource management: the design of processes and tools along the employee life cycle, the allocation of resources and the support offered by HR employees.

Possible elements of the HR strategy:

• Setting 3-4 focal points in the typical HR portfolio:
  • Employer branding: What measures are needed to position the company as an attractive employer in order to attract and retain qualified professionals?
  • Recruitment:How do we secure a sufficient number of applicants - and how do we select accurately and efficiently?
  • Employee development: What programmes are needed to promote further training and professional development for employees?
  • Performance management: What systems are needed to evaluate and manage employee performance, including regular feedback mechanisms?
  • Talent management: How do we attract, develop and retain the talent the company will need in the future?
  • Compensation and benefits: What do compensation systems look like that are fair, in line with the market and motivating for employees?
  • Diversity and inclusion: How do we promote a diverse and inclusive work environment?
  • Change management: How is the change process effectively supported within the company?
  • Compliance: How do we ensure that HR activities comply with local and international laws and regulations?
  • Strategic workforce planning:How do we support the business in recognising personnel requirements at an early stage and managing them accordingly - including career planning and succession planning?
  • Organisational development:How does the organisation need to change to best serve business and employee needs?
• Professionalisation of the HR function
  • HR digitalisation:How does the HR function optimally utilise technological opportunities?
  • HR roles and operating modelHow do the interfaces to the business look - and how does the interaction within HR work?
  • Employee Experience:How do we improve the experience of HR processes for our employees?
  • HR Empowerment:How do we strengthen the capabilities of different HR roles to best fulfil our business mission?

Overall, the HR strategy serves to operationalise the HR strategy and ensure that the HR department works efficiently to support the business objectives. Focus is therefore essential, so a good HR strategy emphasises 3-5 rather than more thrusts.

HR measures are specific activities or programmes that are implemented as part of a company's HR strategy in order to achieve the defined HR objectives. These measures can be diverse and typically include

• Recruitment initiativesRecruitment initiatives : Measures to attract and hire qualified employees.
  • Sourcing & Recruiting Strategy
  • Employer brand definition
  • Relaunch career site
  • Selection and introduction of applicant management systems
  • Entry programmes (trainees, graduates, doctoral students) incl. implementation of individual events
  • Candidate relationship management incl. retention programmes (interns, bachelor's and master's theses)
  • Target group-specific selection processes, criteria and procedures incl. training
• Talent management:Measures to retain qualified employees, strategies to increase employee satisfaction and loyalty.
  • Selection and assessment criteria (performance, potential, competences)
  • Talent review processes and tools (1-over-1, panels and talent conferences, self-nomination) incl. empowerment and moderation
  • Talent pools and programmes
  • Career counselling
  • Individual learning programmes
• Performance management systemsTools and processes for evaluating and improving employee performance.
  • Career paths
  • Project assignments
  • Staffing processes
  • Succession planning incl. conferences
• Internal labour markets: Rules and processes, platforms, search masks, incentives, mentoring
• Internal/external talent brokerage function: Processes, governance, organisation, IT
• Exit processes: Responsibilities, exit interviews, surveys, evaluation
• Alumni management