Last updated December 5, 2023

What is people strategy? A comprehensive guide

Writer, Culture Amp

The era of employees dedicating 20 or 30 years to a single company has ended. Today, it takes more than a paycheck to win an employee’s loyalty. Employers must create an inclusive and nurturing workplace in which employees not only receive fair compensation but also feel valued, heard, and supported.

The art of fostering such a relationship with employees? That’s people strategy.

In this article, we’ll take a closer look at what people strategy is and how it’s different from HR. We’ll explain how your business can create an effective people strategy – and we’ll share some examples along the way. Let’s explore how to build a people-centric business.

What is people strategy?

In order to achieve your business goals, you set a business strategy. In order to attract and retain the right people to achieve said business goals, you set a people strategy.

From recruitment to offboarding, a people strategy shapes your business-employee relationship across all stages of the employee lifecycle. It’s a comprehensive plan that helps a business manage and optimize its workforce by strategizing how to attract, engage, train, and retain its star talent.

People strategies help businesses attract and retain top talent, and they benefit employees, too. An effective people strategy contributes to a work environment where employees feel engaged, supported, and motivated to do their best.

What is the difference between people strategy and HR?

While HR tends to focus on the logistics and systems side of personnel management, people strategy is more employee-centric. It focuses on giving your employees the resources and support they need for a long, fulfilling career at your company. While the two disciplines certainly overlap, here’s a closer look at how they differ:

HR

HR covers the administrative and operational aspects of people management, overseeing the day-to-day functions of areas like:

Benefits administration
Budgeting
Recruitment
Performance management

Overall, HR is more business-centric than people strategy, as it aims to ensure your organizational HR practices and overall headcount match current business needs. HR also tends to cover more immediate people needs, like hiring additional headcount or addressing underperforming employees.

People strategy

Think of people strategy as a philosophy that shapes your company's relationship with your employees, typically including broader, more strategic areas like:

Unlike HR, people strategy tends to be future-focused. It’s about taking action today to improve the future of your business’ employer-employee relationship.

How to create a people strategy

Even if it’s not formally documented, you probably already have some form of a people strategy within your own company. This philosophy is often baked into your business’s mission, values, and culture – all of which shape your company’s relationship with employees.

The difference, however, between having a people strategy and having an effective one is intention. Designing an effective people strategy involves taking active steps to learn what your employees need today, anticipate what they’ll need in the future, and provide them with the right support and resources.

Here are a few factors to keep in mind as you craft your own people strategy:

1. Listen to employees

The best way to discover what your employees want from your business? Ask them.

Be sure your business gives employees regular opportunities to share their feedback and suggestions – whether that’s via Slack, an online form, focus groups, or through regular pulse surveys. This gives you a direct line to the very people you’re trying to impress, so you can hear right from the source about what’s working and what could be improved.

Here are a few tips to guide your employee listening strategy:

Regularly survey employees: Employee surveys can tell you a lot about your workplace. Onboarding, engagement, DEI, exit, employee satisfaction – you can use many different workplace surveys to get the qualitative and quantitative data you need to introduce meaningful change within your organization.
Take action on survey results: Just running a survey isn’t enough; your business needs to take action on survey findings to create the change employees want to see. Hold yourself accountable by publicly sharing survey findings and your team’s action plan. Then, regularly follow up on progress. This shows employees that your company actively listens to and executes their suggestions.

2. Build an inclusive workplace

From job candidates to employees, make sure everyone has the ability to thrive within your company. By prioritizing diversity, equity, and inclusion (DEI), your business can ensure individuals of all identities and backgrounds feel welcome and seen. This can help you attract and retain diverse talent and benefit from the diverse perspectives and innovation people bring to the table when they feel safe and supported.

Here are a few tips to help you create an inclusive workplace:

Build a sense of belonging: Every employee deserves to feel they can bring their full self to work. To build a workplace in which everyone feels secure and accepted by their colleagues and leaders, be sure to regularly track belonging and inclusion and take action on any survey findings.
Train employees to overcome unconscious bias: Everyone holds biases, but when your employees are aware of them and trained to overcome them, they can work together to make your workplace more inclusive. Host regular unconscious bias training with your employees and managers (especially around performance and development review cycles) to keep bias at bay.

3. Invest in engagement

Happy and fulfilled employees provide more value to your organization – in fact, Gallup found that companies in the top quartile of employee engagement see less absenteeism, higher profitability, and higher sales productivity.

How can you improve engagement? Every organization is different, and many factors impact engagement, so conduct regular engagement surveys to find out what your employees want to see from your business in the future. You might find that introducing initiatives around employee recognition, wellbeing, or team-building could move the needle on engagement, or that big-picture factors like work-life balance and communication need improvement.

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4. Develop your managers

Managers have the largest impact on employee experience, so ensuring they have the resources and training to support their teams is crucial to business success. To include this in your people strategy, offer ongoing manager development programs for both first-time and existing managers covering skills like:

Leading successful one-on-ones
Sharing effective feedback
Having difficult conversations
Taking action on survey results
Having effective development conversations
And more

This will ensure they have everything they need to effectively manage and motivate their teams.

Need help encouraging managers to make time for learning? Culture Amp’s Skills Coach uses conversational micro-learning activities over Slack or email to train managers and create new, lasting habits. These highly actionable exercises take two minutes or less to complete and encourage busy managers to put their new skills into practice.

5. Prioritize learning and development

Never underestimate the power of learning. According to LinkedIn’s 2023 Workplace Learning Report, providing learning opportunities is the top way organizations are working to improve employee retention this year. To empower your employees to reach the next level of their careers – and future-proof your business, prioritize learning and development within your organization.

What does this look like? It might include using individual development plans (IDPs), building mentorship programs, and even hosting company-sponsored training programs to help employees learn new skills. Oftentimes, employees aren’t aware of the development opportunities and programs offered by their companies, so remind employees to take advantage of your many resources. To help them advance, publicly share job levels, core competencies, and internal career paths so employees understand how to grow their careers within your company.

6. Adjust your strategy as needed

Once created, a people strategy is never static. Just think about the last few years. During the COVID-19 pandemic, many businesses had to help employees adjust to working from home. More recently, businesses are trying to help their talent through economic uncertainty and high inflation. Your employee needs, and business resources will constantly be changing, so keep a pulse on evolving priorities and trends. Adjust your people strategy as needed to best support your team through whatever changes come your way.

People strategy example: Major League Baseball

Now, let's examine a real-life people strategy at work. After partnering with Culture Amp to improve its employee listening strategy, professional sports organization Major League Baseball (MLB) discovered:

Employees wanted a way to recognize their peers.
Employees craved development but felt they didn’t have enough time in their day to learn.
Managers wanted more visibility into how their teams were doing and how they could be better leaders.

The MLB People team quickly incorporated these findings into its larger people strategy and immediately got to work making them a reality.

After a few months, the MLB team had fully incorporated the survey insights into its people strategy. They were able to:

Introduce a new peer-to-peer recognition software: Shortly after the survey ended, MLB introduced a new tool that let employees publicly praise their colleagues and share monetary rewards, helping the team celebrate big and small wins and build a culture of recognition.
Adopt “dedicated learning time”: Many teams adopted dedicated learning time so employees could step away from their work and dedicate time to learning new skills guilt-free. This caused a larger mindset shift for the organization, helping the People team and employees prioritize career development, learning, and growth moving forward.
Empower managers with data: MLB shared team-specific engagement scores and feedback with managers and senior leaders, giving them context around how their teams’ engagement compared to the rest of the organization and key insights into specific areas where they could improve employee experience in their department.

Refine your people strategy with Culture Amp

From engagement surveys to performance management to employee development, Culture Amp has everything you need to build and maintain an effective people strategy.