What is an HR Strategy and How to Create One in 2025?

HR is always seen as the department that manages the administrative work of a company. What if HR treads down the path of strategy? How will a better HR strategy redefine HR’s role and what are the benefits it can offer? We will be looking at this and more in this blog.

What is an HR strategy?

An HR strategy is when you create people-centric solutions to meet business needs. An HR strategy requires HR input during the creation of policies and procedures to implement solutions and further stress the importance of recruitment, talent management, succession planning and corporate culture. An HR strategy example is one where the focus is on recruiting people from a diverse background for a leadership role.

What is the role of HR in an HR strategy?

Strategic HR unlocks the importance of HR in fulfilling a business strategy. It empowers HR by raising it from an administrative function to make it a strategic business partner. HR can give the organization a better direction, help with workforce planning, create and modify policies, and provide performance tools that increase the productivity of the organization. This is the role of HR in HR strategy

What Are the Benefits of an HR strategy?

An HR strategy example must be vetted by the top management. Once it is cleared, it has significant benefits.

1. Attracts Top Talent

An HR strategy helps attract top talent and expand the talent pool over time, leading to higher quality candidates.

2. Reduces Turnover

Employee engagement increases over time, there is more clarity about work and better work-life balance for everyone, which in turn reduces employee turnover.

3. Increases Productivity

The productivity of an employee also increases when the HR strategy is on point, increasing employee engagement. The HR strategy will also devise ways to improve employee productivity.

4. Faster Achievement of Company Goals

Company goals are now within reach and teams can manage their targets well. This can even facilitate the provision of mandatory leave when the targets are met.

5. More Effective Training of Employees

Employees are trained in a better way as the strategy instructs mentors to focus on their core strengths and weaknesses.

6. Minimize Disruption of Business

Business continuity is not affected in the face of natural disasters, mass layoffs or others, ensuring that the business overcomes these in very little time.

How to Create an HR Strategy?

Now let us inspect the HR strategy process, or the process of creating an HR strategy.

1. Involve All Stakeholders

Your HR team could have the best strategy in the world, but it will not yield any results without the collaboration of the right stakeholders. So, identify the decision makers who need to be kept in the loop and let them know what your concerns are and the reasons why you have drafted the strategy and how you would achieve the end goals. It’s 2025, so it is possible many stakeholders are working remotely. So, take the time necessary to send invitations in advance for every meeting.

2. Know Your Budget

The HR strategy too, like any other initiative, has a budget and one must not exceed it. You must clarify what the budget for the HR strategy can be with the board and the management and then proceed with it. Remember to allocate a good enough budget so that your HR strategy gives you the benefits you expect. In 2025, many companies will be looking to increase their budget, as their success would hinge on an HR strategy. Don’t get left behind.

3. Don’t Forget Compliance

Do not disregard compliance, both internal and external. External compliance involves the statutory and regulatory compliances you need to follow. And internal compliance would be what your company generally follows as a matter of internal policy based on fairness and equity. Abandoning compliance will lead to high costs by way of penalties, which cannot be managed easily. Create an HR strategy that is all-inclusive and based on equity. Gen Z values such qualities in the teams they work in.

4. Work towards long-term solutions

The quickest answer need not be the one most optimal. You may need to work on the problem a bit more, rewrite the problem statement, analyze every aspect regarding it, and then come up with a solution. You would also need to re-engineer the solutions you are generating over time and with feedback from your stakeholders.

5. Monitor and adjust the strategy

Understand how effective the strategy is based on KPIs. You must also follow KPIs closely over a certain period and adjust strategy accordingly. AI and advanced analytics have opened doors to closely monitoring the development of any business strategy. Use it wisely. So, how exactly do you adjust the HR strategy. For instance, if you find employee satisfaction scores dropping rapidly in a period, then you must adjust the strategy to involve more activities, events, awards and recognitions and employee feedback surveys.

What Are the Best Practices for an HR Strategy?

Here are five things you need to do to ensure your HR strategy works for you.

1. Advance diversity, equity and inclusion: A diverse workforce is generally more productive.
2. Empower your workforce with AI: AI can reduce the burden of time and additional costs.
3. Develop a culture of knowledge sharing: Knowledge sharing can boost everyone’s skills.
4. Prioritize employee well-being and health: A happy and healthy workforce is an asset.
5. Plan well before hiring and firing: Your brand’s reputation will be safe if you plan well.

You Need an HR Partner to Help Build Your HR strategy

Building an HR strategy is not easy. This is why you need the help of an expert to build one for you. An HR partner could also add great value when you are trying to go beyond the HR strategy, setting it in motion by implementing recruitment and staffing for your business and helping you manage your current workforce effectively.

Alp Consulting, a recruitment and staffing partner with experience of over 25 years should be your HR strategy partner of choice. If your HR strategy extends to payroll and compliance as well, we can manage those too. Talk to us today and let us help your business grow.

Frequently Asked Questions

How can HR become strategic?

HR must understand the business goals and align the initiatives of the HR strategy with the goals. They must actively collaborate with other departments too to achieve their goals. They must keep fine-tuning their HR strategy over time too.

What are the five pillars of an HR strategy?

The five pillars of HR are employee engagement, performance management, talent acquisition and management, labor law compliance and workplace culture. Together, they define how the HR strategy must be modified over time.

What are the seven major activities of HR?

The seven major functions or activities of HR are talent acquisition, training and development, employee relationship management, performance management, labor law compliance, salary and other benefits management, and day to day office administration.