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How to Align HR Strategy With Business Strategy

Author: Robert S. Teachout, XpertHR Legal Editor

Strategic planning is the process of determining the organization's long-term objectives and establishing the goals necessary to achieve them. The process involves an in-depth analysis of current and anticipated conditions that may affect the organization's ability to achieve its mission.

A business strategy is a future-oriented plan for creating and maximizing competitive advantages to accomplish the organization's mission. To successfully execute that strategy, each function within the business needs to align its departmental strategy with the overall business strategy.

However, it is easy for functional and departmental leaders to slip into a narrow "silo" perspective of their strategy. After all, each function has distinct areas of responsibility - finance and accounting, sales and marketing, operations, HR, information technology and production. But aligning individual departmental strategies with the overall business strategy helps the business plan to be executed efficiently.

The HR function, more than other functions, is involved in and affects the operation and execution of all the other business functions. This is identified most readily in HR's enterprise-wide staffing responsibility, but extends to the entire life-cycle of employment. The HR function intersects and affects the other business functions in the following areas:

  • Talent acquisition;
  • Performance management;
  • Training and development;
  • Employee retention and engagement;
  • Employment law compliance;
  • Compensation and benefits; and
  • Safety and security.

Therefore, properly aligning the HR strategy with the organization's business strategy is critical to achieving the organization's mission.

Alignment is the connection of strategy and execution through communication. Aligning strategies requires HR to:

  • Understand the business strategy;
  • Assess current conditions;
  • Plan and implement the HR strategy; and
  • Measure and evaluate results and adjust as needed.

Communication within the HR department and with leaders of the other business functions is key to accomplishing the following steps.