While you might focus on sales and marketing as your business’ principal drivers, you can’t afford to overlook the importance of a solid HR strategy for business growth.
Your company’s largest single asset isn’t the patents or real estate holdings, but your employees. If you treat your employees well, they can propel your company to new heights.
The role of HR in business growth
Human resources professionals are in a unique position to help shape the way businesses operate. Because people who work in operations, marketing, and middle management tend to look at the business through the lens of revenue, they tend to lose sight of its core values.
Your HR strategy is the bedrock of a successful company. Decades of research show that robust human resource management practices lead to higher business growth rates.
Here are seven ways your HR strategy can contribute to the success of your business.
1. Hire the right people
With a great team behind you, it’s possible to achieve so much. You can tackle a long list of tasks in a short space of time because you know the person you assigned the task to will complete the work. Moreover, the work will be of the quality you expect. Unfortunately, the opposite is also true.
It is important to develop an effective system that helps you identify and hire the best candidates for a job. An effective recruitment process can help you identify suitable personnel. You should also have a review process to ensure that the people you hired perform and have a process for dealing with staff who fail to hit their targets.
Setting up a thorough hiring and review process takes time. You will experience problems. However, you need such a system to help you identify and hire competent staff if you want your company to grow fast.
2. Build a strong culture & promote it
Organizational culture is a collection of values, expectations, and practices that inform how your team works together. Your organizational culture impacts the environment that your staff experiences when they come to the office.
The organizational culture will impact how people perceive your company and the type of employees you attract. For example, consider Google.
You can see why a lot of people want to work for Google. They’ve created an organizational culture focused on business growth and support their staff’s personal and professional goals.
The organizational culture is set at the top. Determine what you want to stand for as a company and how you want your staff to treat each other. If you can create a great organizational culture, you’ll find it easy to attract the best talent. Not only that, you’ll reduce employee turnover.
HR should then work with everyone in the company -- from C-level leaders to rank-and-file employees -- to help implement the organizational culture, ensuring people know what it means to work for your business. Besides, HR leaders should promote and reward employee behavior that reflects the desired culture.
Relevant: Watch our webinar on How to create a winning company culture
3. Training new talent
The recruitment journey doesn’t stop when the successful candidate signs on the dotted line. To formally welcome your new hire, your HR team will need to create an employee onboarding process that will equip them with the skills and organizational knowledge they need to do their jobs properly.
Spend time developing your onboarding process
One element of the onboarding process will cover the company and the culture. All employees, regardless of their position, should learn about the company and the corporate culture you are looking to create.
The earlier you instill the values of collaboration, transparency, and continuous improvement to your new employees, the better.
In addition to a general onboarding, every employee will have to learn the skills and processes specific to their role. If you are going to hire multiple employees for the same position, you should systemize staff training.
Create guides with the information people will need, assign people to supervise new employees, etc. Having such a process in place can reduce the amount of time new employees spend learning and speed up the time it takes to deliver to their potential in the new role.
4. Participate in growth planning
As your business grows, you will need to hire new staff. You might need to train staff to do new tasks, or you might decide to expand into a new market. Whatever the strategy, growth planning, and the ability to execute your plan will be critical to your success.
Your HR team should play a key role in growth planning. Your HR team will need to be aware of the positions you want to fill. Yet it’s not just that. Your HR team can provide valuable insights regarding how a team that you want to expand is operating, what problems are likely to arise, and even things like how long it is likely to take to fill these positions.
All of these are critical to mission success. For example, after you submit a project proposal for a large client and win the bidding process, you will need to get the right people to help deliver results for the client. Involving human resources in the project planning process will help them identify the skills needed for the project and identify people both within and outside the company who could be part of the project team.
5. Minimize employee turnover
Finding, hiring, and training employees is a significant expense for any organization. Ultimately, the cost of finding a replacement is proportional to the difficulty of the role and the number of suitable candidates available.
A study by the Society for Human Resource Management estimated that a salaried employee’s replacement cost is equal to six months’ wages. That sounds about right for a person in a senior role at a company.
The impacts of employee turnover are not just financial. Staff turnover can impact delays to projects and service delivery, lead to loss of productivity, and hurt the team or company morale. Anything that your HR department can do to reduce unwanted employee turnover is likely to promote business growth.
6. Take feedback from employees
If you want to monitor employee satisfaction, it’s important to ask for feedback. Employee feedback is one of the most important data sets that you can gather about how your company operates and living up to the company culture you want to build.
Because your HR team has exposure to almost everyone in your organization, they are in the best position to solicit employee feedback and analyze the data to develop solutions to common issues.
Employees are also more likely to submit feedback to HR personnel because they know that their concerns will be handled professionally and their data is in safe hands.
7. Employee growth & performance management
One of the most important aspects of an HR strategy for business growth is employee growth and performance management.
A good performance management system is key to monitoring employee development. Part of how you monitor an individual’s growth in the company is tracking their performance, measuring it against certain key performance indicators, and identifying their strengths and opportunities for improvement.
Your HR team should take the lead in implementing the performance management system. The data that a performance management system gathers is a valuable source of insights about employee goals and potential career movements.
Relevant: 5 ways to upskill your workforce
In innovative organizations, HR teams are not seen as the people who hire and fire new employees. The HR team is an integral part of the business. A great HR team seems to fade into the background, yet much of what they do underpins business growth.
It makes sense to involve the HR team in the decision-making progress. Your HR team’s work will impact your ability to execute expansion plans, attract the best people, equip them with the skills they need to thrive in the organization, and keep them from leaving. The seven tips I shared are just some of the many ways an effective HR strategy can pave the way for business growth.