Benefits of creating a ‘People Strategy’
Your people strategy is your roadmap to a thriving workforce. A well-crafted people-centric strategy ensures they are valued, supported, and inspired to achieve their best. It outlines initiatives to attract, develop, and retain top talent. After all, your people are your greatest asset. By aligning employee needs with business goals, companies can create a more rewarding employee experience for frontline workers.
What is NOT a ‘People Strategy’?
There are a variety of strategies that companies can adopt achieve their business goals, two more traditional approaches are:
Product-centric
These strategies focus on manufacturing efficiency and quality, often viewing employees merely as resources
Technology-centric
This approach emphasises the role of technology in the workplace, which can overshadow human innovation and creativity
Lower employee satisfaction
Workers may feel undervalued, unsupported or unhappy, which can significantly impact their motivation
Reduced customer loyalty
Companies that overlook customer needs miss opportunities for personalised experiences
Slower innovation
A lack of receptiveness to feedback can stifle innovation and disconnect companies from market trends
So, what IS a people-centric strategy then?
In contrast, a people strategy, or people-centric strategy, sees the people who work in the business as its greatest strength. This approach empowers employees to give constructive input and creates opportunities for customers to help shape products and services.
For example, in the retail industry, focusing on employee experience and customer experiences, business leaders can better understand employee engagement and customer satisfaction challenges. This will help them to refine their business strategies, talent management and engagement approaches, to build a people-centric approach to their business.
The role of employee experience in a people strategy
Research indicates a strong link between employee experience and business outcomes. Companies that score in the top 25% for employee experience often see double the sales volumes compared to those in the lowest quartile.
In instances where more than 50% of workers rate their employee experience as positive, companies enjoy customer retention rates of close to 80%. Innovation also benefits from a positive employee experience, with 8 out of 10 workers in these companies stating that their employers are receptive to innovative thinking.
Instead of aiming for quick wins, companies should consider developing a long-term strategy to constantly improve employee experience.
The impact of investing in employee experience
Investing in employee experience significantly enhances business performance across various metrics.
Studies have shown that by investing in improved employee experience companies see a notable rise in employee engagement.
This correlates with:
Higher profitability
A lower absenteeism rate
Exceptional customer service
Brand reputation
Customer satisfaction and loyalty
The link between these elements is often overlooked by business leaders, despite these being some of the easiest metrics to measure and analyse.
But there’s more!
Reduced staff turnover rates
For every 1% of revenue invested in employee experience a company can experience a 2.5% reduction in employee turnover. While this may not seem like an impressive return, if one considers the cost of employee replacement can be as high as 50% of a worker’s annual salary, its impact is self-explanatory.
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The benefits of a ‘People Strategy’
Investing in people-centric strategies offers significant benefits including:
Financial performance
Implementing a ‘people strategy’ can lead to double digit improvements in profitability. Targeted investments in areas such as wellbeing and skills development can increase revenue by over 10%. Companies can measure the return-on-investment (ROI) of these initiatives through metrics like productivity, turnover rates, and overall financial performance
Innovation
When employees feel valued supported and engaged, they are more likely to contribute their ideas and take risks, leading to the development of new products and services. Internal research by Google identified the willingness of the company’s leaders to let workers take risks (and fail) with product development, as one of the primary drivers behind its ongoing innovation
Competitive advantage
People-centric strategies differentiate companies. A strong employee experience not only attracts top talent but also enhances customer loyalty and brand reputation
ROI and delivery method
Measuring the return on investment of ‘people strategies’ is best achieved by adopting a systematic approach. This entails using key performance indicators (KPIs) and various metrics to evaluate the effectiveness of these initiatives.
While KPIs are often industry specific, there are several that can be universally adopted by companies. These are:
Employee engagement scores
This determines the level of employee commitment and satisfaction; it’s often also linked to productivity and retention metrics
Turnover rate
A lower turnover rate reflects a positive work environment and effective people-centric strategies
Training ROI
This is calculated by comparing the costs of training to the benefits gained, such as increased productivity or reduced errors
Customer satisfaction
Since engaged employees often lead to happier customers, tracking customer satisfaction can provide insights into the effectiveness of people-centric initiatives
What approach to adopt when delivering employee experiences initiatives within a company is often complicated question. A number of factors can influence the approach, these included:
the familiarity of employees with technology,
the organisational culture,
change readiness
the willingness of business leaders to accept change.
Against this backdrop organisations can select from a number of approaches, these are briefly outlined below along with the expected benefit:
Employee engagement platforms
Digital employee engagement solutions automate administrative work, simplify human resources procedures and give staff members self-service options
Skills development
Learning systems can be customised to address certain engagement challenges, which will encourage a sense of belonging and cooperation among staff members
Peer-to-peer learning
Peer-to-peer learning programmes that encourage knowledge sharing among staff members can boost engagement by fostering cooperation and support. This approach to learning systems is highly suitable for use on digital platforms, particularly in the form of microlearning
Employee engagement committees
The formation of cross-functional groups devoted to employee experience and engagement programmes, signals a company’s dedication to cultivating a favourable workplace atmosphere.
For most companies, a blend of the above delivery approaches will yield the best results.
What lies ahead
The future of people-centric approaches in business offers many exciting avenues for companies. This will be driven by the integration of new technologies with existing knowledge of people management and leadership.
Companies can expect to see applications enhancing personalised learning experiences and predictive analytics shaping employee development. Companies will, via permission based systems controlled by employees, also gain a greater understanding of the physical condition of employees. Allowing them to help these individuals by controlling environmental factors in the workplace or identifying optimum work and rest intervals.
There will also be a significant focus on recognising the importance of employee well-being, and organisations will proactively implement strategies to support mental health, stress management, and work-life balance.
Key takeaways
To create a people-centric culture, companies should invest in employee experience, measure and track this experience (based on agreed KPIs) and make data driven decisions on how to improve employee experience.
It’s also important to leave room for risk taking and failure as part of the employee experience, as this failure can provide important pointers to future improvements.
By prioritising people over products or technology and continuously investing in employees, companies can create a sustainable competitive advantage and drive long-term success.