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What is People Strategy and Why Its Important?

7 min read

The term People Strategy sounds pretty familiar and is commonly used in the business lingo as well. What exactly is People Strategy and how much of it do we really understand? 

What is People Strategy? 

When simply put, people strategy is the strategic outline that aligns the HR goals with the overall business goals.

In other words, it helps in your people function not be overlooked and turns it into a point of emphasis. 

For HR teams, it helps in driving the business outcome, like increasing productivity and employee retention.
And for employees it helps in reaching their full potential with the help of learning and development programs. 

In other words, a people strategy encompasses overall plan of a company on how it engages with its employees. 

How it attracts, recruits, and retains its workers, at all stages and all phases of the employee lifecycle. 

Why do you need a People Strategy? 

While not all companies consider it important to have a defined people strategy in place, it is in your company’s best interest to do so.  

The major reasons are: 

  • It helps in engaging with your employees and outlines your communication style.
  • Improved communication leads to purpose-driven employees.
  • It helps in aligning your workforce with your organization’s larger business goals.

When you have a people strategy in place, your employees are empowered. Empowered employees thrive when they are provided with the tools and resources and the right environment.   

They are more likely to develop and align with the business goals when they are empowered. 

Without a people strategy, you will fail to build or sustain a positive company culture, and employee attrition will go through the roof. 

Quite often, we think that an organization’s growth is driven by external factors. The truth is, internal factors are equally or sometimes, more important than the external factors.  

Having a focused people strategy will help you understand how to elevate your workforce, which helps you with rapid growth navigation and helps you make quick adjustments and course corrections more easily. 

Having a defined people strategy asserts confidence among your employees as it shows your commitment to their growth.  

Knowing that reliable systems are in place to recognize their contributions, they will be more engaged and productive. 

How People Strategy fits into the larger picture of your business goals?

Now that we have understood the importance of people strategy, the question remains as to how does it help you in achieving your business goals?  

People strategy empowers employees at all levels and this empowerment translates into employee loyalty. It equips them with a sense of purpose and ownership that will result in increased productivity, boosting your business performance.  

Furthermore, empowered employees are more likely to spread the word about how great a place is your company to work for, attracting more employees.  

As People Strategy is people-centric and is driven by the idea of empowering and enabling the employees to their full potential, it helps in Employee Value Proposition. 

With a well-defined people strategy, all the elements of EVP like compensation, stability, work-life balance, location and respect are covered.
With a good employee value proposition, your employee loyalty retention will continue raising. 

Giving employees the opportunity to learn new skills that align their personal goals with the business goals will result in double-engine growth.  

With more employee development programs, you get a stronger workforce working towards the business goals. 

Comparing People Strategy, Talent Management/HR (In 

Talent management vs People strategy

Elements of a future-proof People Strategy

Focused Employee Engagement:

Keeping your employees engaged and offering them a connection to the company that is beyond their immediate responsibilities keeps them engaged and your employees also feel included. 

Employees who see themselves not just as a job title but as a valued part of the organization will take more pride in associating themselves with the organisation and will bask in its success. 

Practicing transparency, accountably, and recognition goes a long way. 

Providing Advancement Opportunities:

Any employee who feels their job is stagnant and has hit a dead end will not be happy with their work. 

Providing your employees with advancement opportunities and giving them the right tools and resources is the key to not only engaging them but also retaining them. 

An Inclusive Work Environment:

An Employee’s performance suffers when the employee does not feel acknowledged or accepted. Collaboration and feedback from all the team members are greatly valued. 

Aligning your policies to this and ensuring they are widely understood can help scale in the long term.  

Take the time to look for ways to include certain groups of people that routine conduct or dialog may not. 

Hybrid Work culture:

The post COVID world is seeing more hybrid and fully remote work places, which is why you must factor it in to future-proof your people strategy. 

It perfectly fits in with more flexible work hours and supports a better work-life balance. 

Make sure to strategize how to maintain an inclusive workplace for remote employees.  

It is just as important for them to be engaged and be able to develop their skills. 

Summing it up 

If you are aiming to boost your employee performance, and boost productivity to achieve growth, you must think beyond traditional HR operations and think from a strategic perspective. 

A good people strategy builds a kind of relationship with your employees that helps them become their best selves and drives ownership. 

A people strategy offers a new way of attracting, retaining and developing your employees. This change in perspective is not temporary, it’s here to stay considering how companies are fighting tooth and nail to woo great talent.

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    Meet the author

    Balaji Sogathur

    Trying to get my head out of the world of anime and manga and adding bit of that flavor in my work is not just fun but also satisfying. My ignition on the creative engine never goes off, maybe you’ll see a bit of that in my puns.


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